Introduction
Seasonal sellers on eBay thrive during short bursts—Halloween, Christmas, Summer, Back-to-School. But while the sales spike fast, tax problems can hit even faster if you don’t follow compliance rules. In 2025, the IRS is tightening reporting standards, and seasonal sellers are now squarely on the radar.
Key IRS Tax Codes for Seasonal Sellers
- IRC § 61(a): All income, even if seasonal, is fully taxable
- IRC § 162(a): Business expenses are deductible if ordinary and necessary
- IRC § 6001: Requires accurate recordkeeping
- IRC § 6654: Penalty for underpayment of estimated taxes
- IRC § 263A: Capitalization rules for inventory and materials (if applicable)
Required IRS Forms for eBay Sellers
- Schedule C (Form 1040): To report income and expenses
- Schedule SE (Form 1040): For self-employment tax
- Form 1099-K: Issued by eBay Payments for income over $600
- Form 1040-ES: To make quarterly estimated payments
- Form 4562: To depreciate equipment used for the business
Example: High-Profit Seasonal Seller with Tax Issues
Seller: Hannah sells holiday-themed gifts from October to December
- Q4 Sales: $90,000
- Inventory: $35,000
- Shipping, Fees, Ads: $18,000
- Net Profit: $37,000
Hannah didn’t make estimated payments, thinking her business was “seasonal” and not subject to quarterly rules. She received a penalty under IRC § 6654 and had to scramble during tax season to reconcile receipts and eBay reports.
Step-by-Step IRS Compliance Strategy
- Track All Income – Even for 3-Month Businesses
- Use eBay’s monthly reports
- Report 100% of income under IRC § 61(a)
- Deduct All Business Expenses
- Include packaging, shipping, ads, storage, and design costs
- Use Schedule C and keep supporting documents under IRC § 6001
- Make Estimated Tax Payments in High-Profit Quarters
- Use Form 1040-ES
- Avoid penalties under IRC § 6654
- Maintain Digital Records
- Store invoices, payment receipts, and product sourcing logs
- Use e-commerce bookkeeping tools
- Depreciate One-Time Equipment
- Use Form 4562 for printers, lighting, cameras, etc. used seasonally
Conclusion
Seasonal eBay selling is exciting and profitable—but without proper tax planning, it can also be financially dangerous. Don’t let one IRS mistake wipe out your profits. Get compliant now, stay organized, and make every season worth it.
Call to Action
Running a seasonal eBay business?
Schedule a meeting with Anshul Goyal, CPA EA FCA, U.S. Certified Public Accountant, IRS-authorized Enrolled Agent, and expert in helping seasonal sellers remain tax-efficient.
- Schedule: https://calendly.com/anshulcpa/
- Email: anshul@kkca.io
- Website: www.kkca.io
About Our CPA
Anshul Goyal, CPA EA FCA, is a cross-border tax strategist with over 15 years of experience in U.S. taxation. He’s helped 2,000+ sellers save more than $200M in taxes, including short-term and seasonal sellers on eBay, Amazon, and Shopify.
Disclaimer
This blog is for informational purposes only and does not constitute legal, tax, or financial advice. Consult a licensed tax professional for specific guidance.
FAQs
1. Do I have to report income from seasonal eBay sales?
Yes. IRC § 61(a) requires all income to be reported, even for short-term operations.
2. Do seasonal sellers need to pay quarterly taxes?
Yes, if your profit creates a tax liability over $1,000. Use Form 1040-ES.
3. What if I only sell during holidays?
You’re still considered self-employed and must report your income and expenses.
4. Can I deduct holiday packaging and decorations?
Yes, if used for business purposes and properly documented under IRC § 162(a).
5. What tools help seasonal sellers stay compliant?
Use accounting software that integrates with eBay for clean records and reporting.