Does anyone know if you need to pay self-employment tax on eBay sales? Or is it just regular income tax?

Great question! I was in a similar situation last year. The key thing to understand is that the $600 threshold is just for reporting - it doesn't determine what's taxable. Since you mentioned most of your $780 in sales were old video games and electronics you originally paid more for, you're likely looking at personal property sold at a loss. This generally isn't taxable income. The IRS cares about profit, not gross sales. However, you'll still need to be prepared to document your original purchase prices if you receive a 1099-K. Keep any receipts, emails, or other proof of what you originally paid for items. This will help you show the IRS that these were personal items sold at a loss, not business income. Your eBay income would be added to your regular job income only if there's actual profit involved. If you're just clearing out personal belongings at a loss, there's typically no additional tax burden. I'd recommend keeping a simple spreadsheet tracking each item: what you sold it for, what you originally paid, and whether it was personal property or something you bought specifically to resell. This will make tax time much easier!

One thing nobody's mentioned yet - make sure your side business isn't violating any agreements with your current employer! My company had a non-compete clause that I didn't realize applied to my small Etsy shop. Had to restructure my whole business to avoid potential legal issues. Check your employment contract before you start writing off expenses for a side business.

Great question! Yes, you can absolutely deduct your sole proprietorship expenses even while working a W-2 job. The key thing to understand is that your business expenses go on Schedule C, and if they exceed your business income (creating a loss), that loss can reduce your overall taxable income - effectively lowering the taxes on your W-2 income. Your workshop rent, equipment costs, and supplier expenses are all legitimate business deductions as long as they're ordinary and necessary for your business operations. Keep detailed records of everything! One important tip: make sure you're treating this as a real business, not a hobby. The IRS looks for things like having a business plan, keeping good records, working to improve profitability, and having expertise in your field. Since you mentioned this is something you hope will become your main gig, that intent to profit is important to document. Also don't forget about potential home office deductions if you use part of your home for business activities, mileage for business trips, and business use of your phone/internet. Every legitimate expense helps reduce your tax burden.

I literally just went through this same thing buying an engagement ring last month!! My advice is to call the jewelry store directly and ask if they can split the payment into multiple smaller transactions on your credit card. Many luxury retailers will work with you on this even if they don't advertise it. I was able to make 3 separate payments over 2 days that all fit within my credit limit. This avoided the whole wire transfer situation, plus I got the points on my card!

Just wanted to add my experience since I was in almost the exact same situation last year! I was buying a vintage Rolex and had the same panic about wire transfers and IRS reporting. After doing tons of research and talking to my bank, here's what I learned: You're absolutely right to keep good records, but you don't need to stress about special reporting. The wire transfer itself isn't something you report to the IRS - that's all handled automatically by the banks. What really helped calm my nerves was keeping a simple paper trail: I saved the wire transfer confirmation, the purchase receipt, and a brief note in my files about what the transfer was for. My banker told me this was more than sufficient for any future questions. The jewelry store also gave me a detailed invoice that clearly showed the purchase amount and payment method. Between that and my bank records, everything was perfectly documented without any special forms or reporting on my end. One tip: ask your bank about any wire transfer fees beforehand. Mine charged $25 for domestic wires, which wasn't a big deal given the purchase amount, but it's good to know upfront. The whole process was actually much smoother than I expected once I got past the initial anxiety!

whatever u do DONT MAIL IT IN unless u absolutely have to. E-file is the way

Just to clarify for @Emma Bianchi - since you're amending your 2023 taxes, you're definitely good to e-file! The cutoff is 2021 and later, so 2023 is well within range. I amended my 2023 return last year and it took about 14 weeks via e-file. Way better than the paper nightmare everyone's describing here. Make sure you have your original return handy when you're filling out the 1040X - you'll need those numbers for comparison.

I'm a bit late to this thread but thought I'd share - we had a similar issue but with 5 partners. We just amended the K-1s but then ended up getting a notice from the IRS because the total ownership percentage across all partners didn't add up to exactly 100% anymore (we had a small rounding error after fixing the K-1s). Make sure your corrected percentages actually add up to exactly 100%!

Great point about the rounding issue! I just double-checked my numbers and thankfully they do add up to exactly 100%, but that's definitely something I wouldn't have thought to verify. It's crazy how a tiny rounding error can trigger IRS scrutiny when you're trying to fix a legitimate mistake. Based on all the advice here, it sounds like my best path forward is to: 1. File corrected K-1s marked "CORRECTED" for just the two affected partners 2. Include a cover letter with our EIN, tax year, and explanation that only ownership percentages needed correction 3. Attach relevant pages from our partnership agreement showing the correct percentages 4. Verify all percentages across all partners still total exactly 100% Thanks everyone for the detailed guidance - this has been incredibly helpful! Much better than the vague advice I was getting from other sources.