A common question we receive is, should getting a 1099 stop you from selling on eBay?
We post a lot on social media – Instagram, YouTube, and Tiktok, and often get the comment, “Oh, now you have to pay Uncle Sam” or “I don’t want to get a 1099 for $600.”
We’ll unpack those statements, but before we do, we want to remind you that we are not CPAs, so you should find a tax professional for questions.
Is The 1099 A Roadblock?
We hear the 1099 is a roadblock for reselling because people don’t want to get a 1099 once they hit the $600 threshold. eBay’s threshold was previously $20,000, so we would always get 1099s, and we want to make more.
Even if you didn’t get a 1099, you had to submit your income, expenses, and profits. So the new threshold doesn’t change anything. We still have to record what we’re making.
Should It Stop You?
Getting a 1099 should not prevent you from reselling. Right now, we’re dealing with inflation. With rising gas prices and grocery prices, do you want to cut back, or do you want to make more money? Our answer is to make more money. Let’s figure out how we can make more money by flipping. The sky is the limit with this business. You can add more and do higher profit items. You can increase your time. If we need to make more money, we will throw more time and energy into our flipping business.
But getting a 1099 shouldn’t stop you from selling and making more money. Taxes are just a part of life.
Keep Good Records
Keep track of your expenses. There isn’t a one-size-fits-all way to track them. Some people prefer apps, while others, like Melissa, like spreadsheets. A pen and paper is also another option.
You Only Pay Taxes On Profit
Another big misconception about the new threshold is that if I bought a couch for $1,000 and sold it for $600, I would get taxed on it. If you’re taking a loss on an item, that’s not necessarily true. You could get credit if you bought it with the intention of reselling it. You will just have to keep good records of purchases and sales.
And you should be keeping good records of your income and expenses because that’s essential to running a business. If you keep good records, you’re only paying taxes on the profit.
If you have any questions, contact an accountant. Our friend Mark Tew is a reseller and tax expert and has a great bookkeeping and tax course; you can check out the show notes below to learn more.
Sharing Your Numbers Makes It Public
Another twist on the same comment is, “Watch out, the IRS is watching you.”
We put our numbers on social media to share that high-profit flipping is possible. We pay our taxes yearly, so we aren’t worried about our numbers being publicly out there. An accountant takes care of that for us. It’s a business, so we make sure it’s handled.
Don’t let 1099s and taxes keep you from building a profitable side hustle and reselling business!
Show Notes
Check out Mark Tew’s Reseller Tax Academy here. ( & he’s given a $50 Off coupon for our readers! Use the code FLEAMARKETFLIPPER)
You can also check Mark out on his YouTube Channel or on Instagram.
Follow us on Instagram: https://www.instagram.com/fleamrktflipper/
Check out our FREE Workshop: https://courses.fleamarketflipper.com/flipper-university-workshop-webinar
You can find us at: https://fleamarketflipper.com/
FURTHER RESOURCES
Let Us Find High Profit Items FOR You!
FREE Workshop How To Turn Your Passion of Flipping Items Into A Profitable Reselling Business
Download These 47 Household Items To Resell TODAY!
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