Ebay Taxes - New 1099K Threshold Changes for 2023 Tax Filing

You're right about the 1099-K changes. The IRS did announce a delay in the lower threshold reporting requirements for 2023. For now, the threshold remains at $20,000 AND 200 transactions, not one or the other as many people think. The good news is that when you sell personal items at a loss, those aren't actually considered taxable income. Basically, the IRS doesn't let you claim the losses on personal items, but they also don't require you to report the sales as income if you sold them for less than you paid. Think of it as selling used personal items - the tax code recognizes these aren't business transactions designed to generate profit. If Ebay doesn't issue you a 1099-K (which they shouldn't based on your numbers), you technically don't have to report these transactions. However, keeping records of your original purchase prices is always a good idea in case of questions later.

After struggling with similar Ebay tax questions last year, I found this amazing tool called taxr.ai (https://taxr.ai) that helped me figure out exactly what I needed to report. I had sold a bunch of old comics and gaming stuff, some at a loss and a few valuable items at a pretty good profit, and was totally confused about what needed to be reported. I uploaded my Ebay transaction history and some receipts to taxr.ai and it analyzed everything to show me which transactions were actually reportable gains and which weren't. It even helped me understand the difference between personal items vs. items bought with intent to resell, which have totally different tax treatments.

I was so confused about this exact situation last tax season! After reading about taxr.ai here, I decided to give it a try since I had sold about $5k worth of stuff across different platforms. Honestly it was a game changer! The system automatically categorized my personal items sold at a loss (which turned out to be non-taxable) from the few collectibles I sold at a profit. Best part was when I had an audit scare (got a weird letter from the IRS) and had all my documentation perfectly organized thanks to the reports it generated. Saved me so much stress and probably kept me from overpaying on my taxes too. Definitely using it again for my 2024 filing.

If you're still confused after getting tax advice and want to confirm directly with the IRS, good luck trying to reach them on the phone! I spent HOURS trying to get through to ask about my eBay sales situation similar to yours. Then I found this service called Claimyr (https://claimyr.com) - you can see how it works here: https://youtu.be/_kiP6q8DX5c Basically they get you to the front of the IRS phone queue so you don't waste your day on hold. I was connected to an actual IRS agent in about 15 minutes instead of the 2+ hours I had been waiting before. The agent confirmed exactly what I needed to report for my personal item sales on eBay and explained the 1099-K threshold changes directly.

Ok I need to eat my words about Claimyr. After posting that skeptical comment, I was still struggling to get an answer about some Facebook Marketplace sales I made that were similar to the OP's situation. After three failed attempts to reach the IRS (got disconnected twice after 1+ hour holds), I broke down and tried Claimyr. Got connected to an IRS rep in about 20 minutes who confirmed that selling personal items at a loss doesn't create a tax reporting requirement, even with the recent 1099-K threshold changes. The agent actually thanked me for checking instead of just ignoring it. Having the official answer directly from the IRS gave me peace of mind to file confidently without worrying about making a mistake on the eBay/online sales portion.

The 1099-K threshold staying at $20k AND 200 transactions is such a relief! I sold about $5k of stuff last year but was freaking out thinking I'd get a 1099 for it. I'd like to add that keeping a spreadsheet of what you sell, what you originally paid, and any fees is super helpful. I've been doing this for 3 years and it makes tax time so much easier. Even though my personal items sold at a loss don't count as income, I still track everything just in case. And for the few things I've sold at a profit (like some concert tickets I couldn't use that went up in value), I make sure to report those gains.

Can someone explain like I'm 5 why we aren't taxed on personal items sold at a loss but are taxed if sold at a profit? Seems like the government just wants to take money when we're successful but doesn't help when we lose money. I sold my old iPhone for way less than I paid and also some collectible figures that ended up being worth more. Tax code makes no sense to me.

This is exactly the kind of confusion that happens every tax season! You're absolutely right that the IRS delayed the lower 1099-K threshold - it's still $20,000 AND 200+ transactions for 2023. Since you sold personal items at a loss (which is super common when decluttering), you don't need to report those sales as income. The IRS doesn't consider the sale of personal-use items at a loss to be taxable events. Your $3,300 in sales from cleaning out your closet and garage falls into this category perfectly. The key thing is keeping some basic records just in case - even rough estimates of what you originally paid for items. But honestly, with everything sold at a loss and no 1099-K being issued, you're in the clear. The IRS isn't going to flag someone for NOT reporting personal item sales that resulted in losses. Don't stress about it - you're handling this exactly right by asking questions and being cautious!

Great discussion here! I had a very similar situation last year and want to share what I learned. I sold about $4,200 worth of personal items on eBay - old camera equipment, some vinyl records, and furniture - all at losses from what I originally paid. After doing research and talking to my tax preparer, I confirmed that personal items sold at a loss don't need to be reported as income. The IRS treats these as personal consumption items that naturally depreciate over time. Since you won't receive a 1099-K at your sales level, and everything was sold at a loss, you're good to go. One tip though - I started keeping a simple spreadsheet after that experience with columns for the item, estimated original cost, sale price, and platform. Even though losses on personal items aren't reportable, having the records gives me peace of mind and helps me track my overall decluttering progress. Plus if I ever do sell something at a profit (like that one vintage record that surprised me), I'll have the documentation ready. You're being appropriately cautious by asking these questions, but you can relax - the IRS isn't going to come after someone for clearing out their garage and selling everything at a loss!