New 1099-K reporting rules mean your eBay, Etsy, or other online sales could land on the IRS’s radar—even if you’re just cleaning out your garage.
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Quick Tax Tip
With Art Werner
CPE Today
If you’ve been selling old collectibles, furniture, or other personal items on eBay, you might think of it as a quick way to make cash, not something that belongs on your tax return. But according to tax guru Art Werner, new reporting thresholds for 1099-K forms are changing that, and the IRS could already have your sales data in hand.
“In the past, the threshold for receiving a 1099-K from a payment processor or credit card company was $20,000,” Werner explains in the latest episode of Quick Tax Tip. “If you didn’t hit that threshold, you wouldn’t get the form, and frankly, no one was looking.”
That’s no longer the case.
The key question is whether your sales create a gain. If you sell personal property for more than you originally paid, it’s considered taxable income. If you sell at a loss, you don’t get to deduct it.
“If it’s personal and it creates a gain—yes, you have to report it,” Werner says. “If it creates a loss—no, you don’t get the loss.”
So if you sell $6,000 worth of personal items you originally paid $5,000 for, you have a $1,000 gain that’s taxable. But if you originally paid $10,000 and sold for $6,000, you’re out of luck—no deduction allowed.
Now, thanks to lower thresholds for 1099-K reporting, you could receive this form even for small-scale, non-business sales. That form is also sent directly to the IRS, which means they’ll expect to see the income reflected on your tax return.
If you get a 1099-K showing $6,000 in sales, the IRS sees that as reportable income unless you clearly show it was from non-taxable transactions or personal sales at a loss.
The changes are especially important for anyone who sells:
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On platforms like eBay, Etsy, Poshmark, or Facebook Marketplace
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Through payment processors like PayPal or Venmo
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Using credit card transactions for peer-to-peer sales
What used to fly under the radar is now in plain sight.
“If you’ve been treating these sales casually, you can’t anymore,” Werner warns.