Starting on eBay in 2025? The One Tax Tip Most Sellers Overlook (But Shouldn’t)

Introduction

eBay sellers in 2025 need to think beyond listing and shipping. Once your sales cross $600, the IRS
expects you to report that income—whether or not eBay sends you a Form 1099-K. This blog
explains the most overlooked tax tip for eBay sellers, details the IRS forms you need, and shows
how to stay legally compliant while saving on taxes.

IRS Tax Code Reference

These sections of the Internal Revenue Code apply directly to eBay sellers:

•  IRC §61(a): Gross income includes all income from whatever source derived, including eBay
  sales.
•  IRC §162(a): Allows deductions for ordinary and necessary business expenses like postage,
  listing fees, and supplies.
•  IRC §6050W: Requires third-party payment processors to issue Form 1099-K once gross
  payments exceed $600 (as of 2025).

Relevant IRS Forms for eBay Sellers

• Form 1099-K: Issued by eBay (or PayPal) if you exceed $600 in sales.
• Schedule C (Form 1040): Used to report self-employment income and expenses.
• Form 4562: To report depreciation on business assets (e.g., camera or laptop used for
  listings).
• Form 8995: To claim the 20% Qualified Business Income deduction (if eligible).
•  Form 8829: If you use part of your home exclusively for your eBay business.

Example: eBay Seller Tax Filing Scenario

Case: Riya, an eBay Seller from New Jersey

• Gross sales on eBay in 2024: $45,000
• Business expenses:

o Postage and shipping: $5,000

o Listing and final value fees: $3,000

o Product sourcing: $20,000

o Shipping supplies and scale: $700

o Laptop depreciation: $800

o Home office: $1,500

Net income:
$45,000 – $31,000 = $14,000
QBI deduction (Form 8995):
20% of $14,000 = $2,800

Riya pays tax only on $11,200 of income after legal deductions and QBI.

Step-by-Step IRS Compliance Guide

• Download Form 1099-K from eBay (or PayPal/Stripe).
•  Maintain a spreadsheet of gross income and categorized expenses.
• Report all business income on Schedule C.
•  Depreciate business equipment using Form 4562.
•  Deduct home office expenses using Form 8829.
• Check eligibility and file Form 8995 for QBI.
• File full tax return with Form 1040 and attach required schedules/forms.

Conclusion

Many eBay sellers assume they don’t need to file taxes unless they receive a 1099-K — this is false.
Every dollar earned from eBay must be reported under federal tax law. With proper expense
tracking and deductions, you can significantly lower your tax liability while staying fully compliant
with the IRS in 2025.

Call-to-Action and Disclaimer

Are you an eBay seller trying to file correctly and avoid IRS trouble?

Book a meeting with Anshul Goyal, CPA now to get your taxes handled professionally.
Schedule here: https://calendly.com/anshulcpa/

Disclaimer: This blog is for general informational purposes only. It should not be considered legal or
tax advice. Every seller’s situation is unique. Please consult a licensed CPA for advice based on your
specific case.

Anshul Goyal, CPA EA FCA is a U.S. Certified Public Accountant, admitted to practice before the IRS
as an Enrolled Agent. He is also a cross-border tax specialist, helping American businesses and
Indians in the U.S. with IRS compliance and tax planning.

Top 5 FAQs

1. Do I have to report eBay income if I didn’t get a 1099-K?
Yes. All income is taxable under IRC §61, even if no 1099-K was issued

2. What expenses can I deduct as an eBay seller?
Eligible deductions include shipping, listing fees, packaging, internet, and office supplies

3. Can I use the QBI deduction as an eBay seller
Yes, if your business is a sole proprietorship or pass-through entity

4. What if I only sell occasionally on eBay?
If it’s a hobby, different rules apply. But if you're selling for profit regularly, it’s a business

5. What’s the penalty for underreporting eBay income?
You may face IRS penalties, interest, or even audits. It’s best to report and deduct properly.

About Our CPA

Anshul Goyal, CPA EA FCA is a licensed CPA in the U.S., a Chartered Accountant from India, and an
IRS Enrolled Agent. He brings over 15 years of experience in tax filing, audit defense, and strategic
consulting for eCommerce and digital sellers across platforms like eBay, Amazon, Etsy, and Shopify.

He’s helped clients save over $200 million through strategic tax positioning.

Email: anshul@kkca.io

Schedule a call: https://calendly.com/anshulcpa/

Website: www.kkca.io