How do I calculate gross income for Schedule C with my eBay business?

Thanks for explaining this! I'm in a similar situation but I also get charged for listing fees sometimes when I use extra features. Would those also be deductible as business expenses? And what about the cost of the items I'm selling? I'm mostly selling things I've had for years.

Yes, listing fees are absolutely deductible as business expenses - they're part of your cost of doing business on eBay. Those would typically go on Line 27a "Other expenses" with a brief description. For the cost of items you're selling that you've owned for years, this gets a bit tricky. Since these are personal items you're selling (not inventory you purchased to resell), you'd use the fair market value of the items at the time you converted them to business use as your "cost of goods sold." However, this can be difficult to establish for collectibles. If the items have appreciated significantly since you acquired them, you might want to consult with a tax professional for your specific situation.

Does it automatically connect to eBay accounts or do you have to download statements first? My eBay dashboard is so confusing with all the different fees and categories.

I'm a bit skeptical about using third-party tools with my financial info. How secure is it? And does it handle multiple platforms if I sell on Mercari and Facebook Marketplace too?

You download your statements from eBay first and then upload them - takes like 30 seconds. I just downloaded the annual summary PDF from eBay and uploaded that. The tool parses it all out automatically, super simple. The security is actually really good - they use the same encryption banks use, and they don't store your login info for any platforms. And yes! It definitely handles multiple platforms. I did both my Etsy and eBay together, and I know it works with Amazon, Mercari, Facebook, and pretty much any platform that gives you selling reports or statements.

Wait, how does this actually work? Do they somehow have a special connection to the IRS? I've literally spent entire afternoons on hold before giving up.

Yeah right. I've tried everything to get through to the IRS and nothing works. I'll believe this when I see it. They're probably just going to try to sell me something else once they get my phone number.

It's actually pretty simple - they use an automated system that waits on hold for you. They don't have any special connection to the IRS, they just handle the painful wait time so you don't have to. When an IRS agent picks up, their system calls you and connects you directly to that agent. You get a text when they're about to call you so you can be ready. I was skeptical too at first, but it's literally just a service that waits on hold for you. And you don't have to stay on the line or keep your phone tied up during that time. I got through to an actual IRS agent in tax season when wait times were 2+ hours, and I only had to be on the phone for the actual conversation part.

It actually depends on whether you're selling these items at a profit and how frequently you're selling. The IRS generally considers if you're engaged in an activity with the intent to make a profit - if you're regularly selling items to make money (not just occasionally clearing out personal belongings), they'd likely see this as a business requiring Schedule C. Since you've sold over $5,000 worth, you'll probably receive a 1099-K from eBay anyway (the threshold is now $5,000 for 2025 tax year), which means the IRS will be expecting to see this income reported somewhere on your return.

Thank you so much for this explanation. I've been selling pretty consistently throughout the year, about 3-4 items per week, and definitely making a profit on most pieces. I think based on what you're saying this would count as a business activity, especially since I'm going to get a 1099-K. I'll go ahead and prepare Schedule C. Really appreciate the help!

Omg thank you for mentioning this! I had no idea about the self-employment tax. Is that on top of regular income tax? Do I need to be making quarterly payments or something? This is getting complicated fast...

Yes, self-employment tax is in addition to regular income tax! It's basically the Social Security and Medicare taxes that would normally be split between you and an employer, but since you're self-employed, you pay both halves (15.3% total - 12.4% for Social Security + 2.9% for Medicare). If you expect to owe $1,000 or more in taxes for the year, you're supposed to make quarterly estimated payments to avoid penalties. The deadlines are usually January 15, April 15, June 15, and September 15. Since this is your first year, you might be okay for this year, but definitely plan ahead for next year. You can use Form 1040-ES to calculate your quarterly payments. The good news is you can deduct half of your self-employment tax as an adjustment to income, so it's not quite as bad as it initially seems!