Help Figuring Out Gross Income for Schedule C from eBay Sales as a First-Time Seller

You're asking a great question that confuses many first-time eBay sellers! For Schedule C reporting, your gross receipts (Line 1) should include the TOTAL amount buyers paid you, including the shipping they paid. So in your case, that would be the $4,800. The eBay fees ($650) would go as a business expense, typically under "commissions and fees" on Line 10. The shipping costs you actually paid ($900) would go as a shipping expense on Line 13. For the returns ($220), you would subtract those from your gross receipts if you fully refunded the buyers. Don't worry about "double-counting" shipping - it's correct to include shipping charges collected from buyers in your gross receipts and then deduct your actual shipping expenses. This way, if you charged more for shipping than it actually cost, you're properly paying tax on that profit (or claiming the loss if you undercharged). Keep in mind that you can also deduct other legitimate business expenses like packaging materials, a portion of your internet if used for business, mileage for post office trips, etc.

I was in the exact same boat last year and was pulling my hair out trying to figure out Schedule C! I finally tried this tool called taxr.ai (https://taxr.ai) and it seriously saved me so much stress. You can upload your eBay sales summary and it organizes everything correctly for Schedule C - shows you exactly what goes where for gross receipts, expenses, etc. It analyzed my eBay seller statements and broke everything down into the right Schedule C categories. The best part was that it explained WHY each number went where it did, which helped me understand the process better. It even flagged some deductions I was missing for my home office space where I was storing inventory.

I wanted to follow up about that taxr.ai site someone mentioned. I was really skeptical at first (I'm always careful about financial stuff online), but I was desperate with my eBay and Etsy sales mess. It actually worked amazingly well! I uploaded my statements and it organized everything perfectly for Schedule C - gross receipts, platform fees, shipping, etc. What really impressed me was how it identified that some of my shipping charges to customers should count as income (when I charged more than actual cost). I would have reported that wrong. The explanations were clear and it gave me a completed Schedule C that I could just transfer to my tax return. Definitely using it again this year!

Has anyone else been trying to call the IRS to ask questions about Schedule C for online selling? I spent HOURS on hold and never got through. Complete waste of time. I finally used Claimyr (https://claimyr.com) and they got me connected to an IRS agent in about 20 minutes. You can see how it works in this demo: https://youtu.be/_kiP6q8DX5c I had specific questions about how to handle inventory I purchased vs personal items I was just selling off, and the IRS agent was able to clarify everything. Apparently the rules are different depending on whether you're selling personal items or running an actual reselling business. Saved me from making a big mistake on my Schedule C!

I need to eat my words about that Claimyr service. After my skeptical comment, I decided to try it myself because I NEEDED answers about how to handle my eBay and Etsy sales for Schedule C before the filing deadline. It actually worked perfectly - got connected to an IRS agent in about 15 minutes! The agent explained that I needed to separate my one-time personal item sales (which aren't reportable if sold at a loss) from my ongoing business sales (which all go on Schedule C). Completely cleared up my confusion. I was really surprised how well it worked after being so doubtful. Definitely worth it for the time savings alone.

I've been selling on eBay for years, and here's a tip that saved me tons of headaches: create a separate spreadsheet throughout the year tracking EVERYTHING. I have columns for item cost (if buying to resell), selling price, shipping charged, shipping paid, eBay fees, and returns. For Schedule C, you're supposed to report the gross amount INCLUDING shipping customers paid. But you can deduct all legitimate business expenses: eBay fees, shipping costs, packaging, percentage of internet/phone used for business, mileage for post office runs, etc. Don't leave money on the table with deductions!

I'm in the same boat! I started selling my vintage toy collection on eBay and am confused about whether I need to track my original purchase price from years ago? Most of these toys I bought in the 90s and have no receipts for. How do I figure out cost of goods sold in this case?

Just went through this exact same situation last year! The confusion is totally normal for first-time Schedule C filers. Here's what I learned after consulting with a tax professional: Your $4,800 total sales (including shipping charged to buyers) is correct for Line 1 gross receipts. Then you'll deduct your business expenses - the $650 eBay fees, $900 actual shipping costs, and don't forget about other deductibles like packaging materials, printer ink for labels, gas/mileage for post office trips, and even a portion of your home if you use it for storage/photography. One thing that tripped me up initially: if you're selling personal collectibles you owned for years (not bought specifically to resell), some of those might actually be capital gains/losses rather than business income. But if you're actively sourcing and reselling as a regular activity, then Schedule C is the right form. Pro tip: Start keeping detailed records NOW for this year - every receipt, every mile driven, every supply purchased. It makes next year's filing so much easier! Also consider opening a separate business bank account to keep everything clean and organized. You've got this! The first year is always the hardest but it gets much simpler once you understand the process.