Due to the nature of selling on eBay, you’ll file taxes as a self-employed individual. As an eBay seller, the IRS considers you an independent contractor that performs services for a company rather than being a direct employee. You will file a 1099-NEC if you sold more than $600 in goods.
Taxation for Online Sellers
Independent contractors pay self-employment tax (SE tax) as well as income tax. Schedule C Form 1040 reports income and expenses and calculates net profit or loss. Numbers transfer to Form 1040.
Regulations and Taxes for Online Selling
If selling Amazon items depends on the amount made, pay income tax plus Self-Employment tax for Social Security/Medicare. Rules will change with two tax breaks – for Airbnb and trading income.
Nearly every state requires a seller’s permit to sell goods and services online. The general rule is that if you sell products or services that qualify for sales tax, you’re required to get a seller’s permit.