Introduction
In 2025, creators are scaling globally on eBay with ads targeting customers across the U.S., UK, Europe, and Australia. But many forget that international advertising still triggers U.S. tax consequences even if sales happen overseas.
Running ads without the right tax moves can cost you deductions and expose you to audit risk. This guide breaks it down.
IRS Tax Codes Impacting Global Creators Advertising on eBay
- IRC § 162(a): Advertising expenses are deductible when ordinary and necessary
- IRC § 263: Some branding-related expenses may require capitalization
- IRC § 6001: Requires documentation and records for deductions
- IRC § 61(a): All global income received is taxable if you’re a U.S. resident or citizen
- IRC § 911 (for qualifying expats): May apply to earned income exclusion (not passive income)
IRS Forms to Know for Global Ad Spend
- Schedule C (Form 1040): Report ad spend and global income
- Form 1040-ES: Make quarterly tax payments
- Form 4562: Depreciate ad-related tools and content creation equipment
- Form 1099-NEC: Issue to foreign freelancers/influencers if U.S.-sourced work
- Form 5471 or 8938: If operating through a foreign company or holding foreign financial assets
Example: International Creator Scaling with Ads
Creator: Sofia, based in New York, sells handmade jewelry on eBay and advertises globally via Facebook and YouTube.
- Revenue: $160,000
- Ad Spend: $30,000 (50% overseas targeting)
- Fulfillment Tools & Freelancer Cost: $8,000
- Net Profit: $122,000
Strategy: Sofia deducts her international ad spend under IRC § 162(a) and tracks campaign performance per platform. She collects W-8BEN forms from foreign freelancers and maintains records in case of audit under IRC § 6001.
Step-by-Step Advertising & Tax Strategy
Track Global Ad Spend by Campaign
- Split U.S. and international ad performance
- Store billing statements monthly
Deduct All Advertising Expenses Properly
- Report on Schedule C, Line 8
- Avoid capitalizing unless part of a long-term brand asset (IRC § 263)
File Form 1099-NEC for U.S.-based freelancers
- For foreign freelancers, request Form W-8BEN to document non-U.S. status
Depreciate Content Creation Gear
- Deduct cameras, lighting, and editing tools with Form 4562
Make Estimated Tax Payments
- Use Form 1040-ES
- Include income from global ad-driven sales
Conclusion
Advertising globally on eBay opens new markets but it also opens tax exposure. Before scaling your creator business, lock in a clean tax strategy and make every ad dollar count on your IRS return.
Call to Action
Expanding globally as a creator on eBay?
Schedule a meeting with Anshul Goyal, CPA EA FCA, a U.S. Certified Public Accountant, Enrolled Agent, and expert in e-commerce and cross-border tax strategies.
- Schedule: https://calendly.com/anshulcpa/
- Email: anshul@kkca.io
- Website: www.kkca.io
About Our CPA
Anshul Goyal, CPA EA FCA, is a U.S. and international tax expert with 15+ years of experience helping creators scale globally with clean financials and smart tax strategy.
Disclaimer
This blog is for informational purposes only. Please consult a qualified CPA for advice tailored to your unique tax situation.
FAQs
1. Can I deduct ads targeting customers outside the U.S.?
Yes, if related to your business. Ad costs are deductible under IRC § 162(a).
2. Do I need to pay U.S. taxes on foreign eBay sales?
Yes, if you’re a U.S. citizen or tax resident, global income is taxable under IRC § 61(a).
3. Are Facebook and YouTube ad costs deductible?
Yes, if used for business promotion.
4. Do I issue 1099s to international influencers?
No, but collect Form W-8BEN for recordkeeping.
5. Can I deduct YouTube equipment for eBay promotions?
Yes, using Form 4562 for depreciation.