Does eBay Send 1099s for 2025? Navigating the Tax Landscape for Online Sellers

The short answer is yes, eBay will likely send 1099-K forms for the 2025 tax year (distributed in January 2026), provided you meet certain income and transaction thresholds established by the IRS. Understanding these thresholds and your responsibilities as a seller is crucial to avoid tax-related headaches.

Understanding the 1099-K Form: Your eBay Tax Guide

The 1099-K form is an informational document that eBay and other payment settlement entities (PSEs) like PayPal are required to send to the IRS and to sellers who meet specific criteria. It summarizes your gross payment volume received through their platform during the tax year. It’s important to remember that the amounts reported on the 1099-K are gross payments, meaning they don’t account for returns, refunds, fees, or the cost of goods sold.

1099-K Thresholds: What Triggers a Form?

The specific thresholds that trigger eBay to send you a 1099-K form have been subject to recent changes and remain a point of confusion for many sellers. Prior to 2023, the threshold was $20,000 in gross payment volume and 200 transactions. However, the American Rescue Plan Act of 2021 initially aimed to lower this threshold significantly to just $600, regardless of the number of transactions.

Due to widespread concerns and complexities in implementation, the IRS has delayed the $600 threshold multiple times. For the 2023 tax year (forms issued in January 2024), the IRS set a threshold of $20,000 in gross payment volume and 200 transactions, reverting to the pre-existing standard. For the 2024 tax year (forms issued in January 2025), the IRS is implementing a threshold of $5,000 in gross payment volume.

As for the 2025 tax year (forms issued in January 2026), the IRS has indicated their intention to eventually implement the lower $600 threshold, but this remains uncertain. It’s crucial to stay updated on IRS announcements and official guidance throughout 2025. Always refer to the IRS directly or consult with a tax professional for the most up-to-date information.

Why is the 1099-K Important?

The 1099-K provides the IRS with a record of your income received through eBay. You are responsible for reporting all income to the IRS, even if you don’t receive a 1099-K. If the 1099-K form shows an amount different from your own records, or if you don’t receive a 1099-K but believe you should have, it’s crucial to reconcile your sales records and contact eBay for clarification. Any discrepancies need to be addressed promptly to avoid potential issues with the IRS.

Beyond the 1099-K: Calculating Taxable Income

Receiving a 1099-K does not automatically mean you owe taxes on the entire amount reported. The 1099-K represents your gross sales. Your taxable income is determined by subtracting business expenses from your gross sales. These expenses can include:

• Cost of Goods Sold (COGS): The direct cost of purchasing or producing the items you sold.
• eBay Fees: Listing fees, final value fees, and other platform-related charges.
• Shipping Costs: The cost of shipping items to your buyers.
• Office Supplies: Expenses related to your business operations, such as packaging materials, printer ink, and software subscriptions.
• Other Business Expenses: Advertising, marketing, and professional fees (e.g., accounting or legal services).

Keep meticulous records of all your income and expenses. Tools like spreadsheets or dedicated accounting software can be invaluable for tracking your financial activity and ensuring accurate tax reporting. Consulting a qualified tax professional is highly recommended to help you understand which deductions you can claim and optimize your tax strategy.

eBay 1099-K FAQs: Your Questions Answered

Here are some frequently asked questions to further clarify the 1099-K situation for eBay sellers:

1. What happens if I don’t receive a 1099-K form, but I think I should have?

If you believe you met the threshold for receiving a 1099-K form but didn’t receive one, first, double-check your sales data and confirm that you indeed exceeded the applicable threshold. Contact eBay’s customer support to inquire about the status of your form. Even if you don’t receive a form, you are still responsible for reporting all your income to the IRS.

2. What if the amount on my 1099-K is incorrect?

If the amount reported on your 1099-K is inaccurate, immediately contact eBay’s customer support. They can investigate and, if necessary, issue a corrected form (1099-K corrected). Retain all your sales records to support your claim.

3. Does eBay send 1099-K forms to international sellers?

eBay’s obligation to send 1099-K forms typically applies to sellers residing in the United States. However, international sellers should consult with a tax advisor in their country of residence to understand their local tax obligations. The rules are dependent on your residency and your tax obligations in that country.

4. How does the 1099-K affect my state taxes?

The 1099-K impacts your state taxes similarly to your federal taxes. You need to report the income on your state tax return and deduct applicable business expenses. State tax laws vary significantly, so it’s essential to understand the rules in your state of residence.

5. How do I access my 1099-K form from eBay?

eBay typically makes the 1099-K form available electronically through your seller account. Check the “Tax Information” or “Financials” section of your account dashboard. You may also receive a physical copy by mail.

6. Can I deduct the cost of goods sold (COGS) even if I didn’t receive a 1099-K?

Yes! Whether or not you receive a 1099-K is irrelevant to your ability to deduct legitimate business expenses, including the cost of goods sold. Keeping meticulous records of your expenses is crucial for accurate tax reporting, regardless of whether you receive a 1099-K.

7. What happens if I sell personal items on eBay? Is that considered taxable income?

Selling personal items at a loss generally doesn’t result in taxable income. However, if you sell personal items for more than you originally paid for them, the profit might be taxable. It depends on the specific circumstances, and consulting a tax professional is recommended.

8. How do I track my eBay sales and expenses for tax purposes?

Use a spreadsheet, accounting software (like QuickBooks Self-Employed or FreshBooks), or a dedicated app to meticulously track all your sales and expenses. Regularly reconcile your eBay sales data with your payment records to ensure accuracy.

9. Are there any exceptions to the 1099-K reporting requirements?

While rare, there might be specific exceptions depending on the payment method or type of transaction. However, it’s always better to err on the side of caution and report all income. Contact a tax advisor to discuss any unusual situations.

10. What if I have multiple eBay accounts? Are the thresholds applied separately to each account?

Yes, the 1099-K thresholds generally apply separately to each individual eBay account. Therefore, if you have multiple accounts, each account is evaluated independently against the relevant IRS threshold.

11. If I only sell on eBay as a hobby, do I still need to report my income?

Yes, even if you consider your eBay selling a hobby, you’re still required to report the income to the IRS. You may be able to deduct some expenses, but the rules for hobby income are different from those for a business. Again, consult with a tax professional.

12. Where can I find more information about eBay and taxes?

The best resources are the IRS website (irs.gov) and a qualified tax professional. eBay also often provides informational pages within the seller center, but these should not be considered definitive tax advice.

Navigating the tax implications of selling on eBay can be complex. Stay informed about the latest IRS guidelines, maintain meticulous records, and don’t hesitate to seek professional tax advice. By proactively addressing these issues, you can ensure a smooth and compliant tax season. Remember to consult with a qualified tax professional or refer to the IRS directly for personalized guidance.