eBay sales can definitely generate extra income. Within this context, it should be recognized that surrounding tax implications are fundamental in such sales as the IRS requires eBay sellers to report earnings.
The good news is that eBay seller tax deductions enable sellers to lower the amount of taxable income by claiming eligible eBay business expenses write-offs. In a nutshell, eBay sellers can reduce the taxation burden by keeping accurate records of expenses from shipping costs to listing fees.
This guide presents:
eBay sellers generating income amounts over $2500 in payments will receive a 1099-K form and this form is also reported to the IRS by the platform. This signifies that this income should be included in the tax returns regardless of whether the form was received.
So the answer to the generic question, “Do I need to report eBay sales on my taxes?” is a yes, if the earnings are over $2500 in 2025 and over $600 in 2026.
One of the initial questions that comes to mind is: How do eBay sellers lower their tax bill? eBay sellers can lower the amount of taxable income by claiming specific business-related deductions. Major eBay seller tax deductions are listed below:
The fees charged by eBay for listing and selling products are fully deductible business expenses like:
The full cost of shipping and packaging materials can be deducted by sellers like:
The original cost of inventory is deductible in case of reselling on eBay as exemplified below:
Eligibility for a home office deduction is possible in the case sellers use part of their home exclusively for business:
Digital tools used by eBay sellers in order to manage the eBay business expenses write-offs can be deducted:
Expenses realized for promoting eBay listings and growing the business are tax-deductible.
Vehicles leveraged for business purposes can be deducted:
A portion of internet and phone expenses are able be deducted if used for an eBay business:
If eBay sellers travel for trade shows, sourcing inventory or business-related events, relevant expenses are accepted as deductible:
eBay sellers might optimize the eBay seller tax write-offs 2025 and reduce their taxation liabilities by recording expenses with a deductible nature. Such practice not only prevents unnecessary taxation burdens but also establishes full compliance.
Yes. The Cost of Goods Sold (COGS), which includes the original purchase price of inventory, is a deductible eBay seller tax write-off. This applies to:
It should be acknowledged that lowering the tax burden as an eBay seller starts with smart tax planning as well as keeping proper records. Qualified eBay seller tax deductions can be claimed with the following practices:
In the case of not reporting eBay sales, the result can be IRS penalty amounts, audit processes or additional taxes:
Tip: If an individual receives a 1099-K, it should be ensured that the reported income is included in the tax return to prevent IRS scrutiny.
eBay sellers can lower the taxation bill by claiming deductible expense items like seller fees, shipping costs, inventory expenses as well as home office costs. Detailed recording practices on eBay business expenses write-offs present assistance in optimizing savings.
Want to maximize your eBay tax deductions? Consult a tax professional to ensure you're claiming every possible write-off!
eBay sellers are able to deduct seller fees, shipping costs, inventory (COGS), home office expenses, advertising and business software.
The IRS necessitates eBay to send a 1099-K if sellers receive a certain threshold or more in payments. $600 dollar threshold is planned to be in force in 2026
All eBay sales are taxable. However, eBay only reports income over $2500 to the IRS in 2025. Even without a 1099-K, all earnings should be reported by sellers.
Yes. The cost of inventory (COGS) is deductible if selling for profit. It includes wholesale purchases and second-hand items for resale.
The only legal way is by claiming business deductions. Such deductions simply reduce the taxable income. Typical write-offs include fees, shipping and home office costs.
Receipts and records of business costs should always be kept. Accounting software can be leveraged and deductions might be reported on Schedule C when filing taxes.
