eBay Business Tax Basics Every Seller Should Know

Yes, eBay income is taxable

Whether it's a side hustle or full-time business, eBay sales are taxable income. Since 2023, eBay reports sellers with $600+ in gross sales to the IRS via Form 1099-K.

What you can deduct

• Cost of goods sold: What you paid for the items
• eBay fees: All seller fees are deductible
• Shipping costs: Labels, packaging materials, tape
• Home office: Proportional to space used for eBay
• Software/tools: ShopManage, listing tools, etc.
• Mileage: Trips to post office, sourcing locations
• Supplies: Printer, scale, photo equipment

Keep records

Track every purchase receipt, shipping label, and fee. Good records can save you thousands in taxes. Use a spreadsheet or accounting software — and keep it updated weekly, not at tax time.

When to get an accountant

Once you're consistently making $2,000+/month, a tax professional can usually save you more than they cost through proper deductions and business structure advice.

ShopManage tracks your fees and order data automatically — making tax time much easier. Start free today.