I originally thought that the tax would be on a gain. So If I bought a wacky packages collection for $1000 and resold it for $1500 the tax would be on $500. I read the rules, not the case. It is on the full amount and it does not even matter if there is a loss. So if I bought a piece of furniture for $5000 and sold it years later for $2500 it is taxed as income. The IRS is focusing on venues like Ebay, Etsy, Facebook market place. They will be monitoring bank accounts, paypal, venmo and like for transactions > $600. With paypal and venmo if you sell it as a good or service the tax will apply. Not sure what they are going to do with bank accounts yet.
Think of selling your boat, motor cycle, car, or some large ticket item. They will all be taxed now.
The tax thing is really just not that big of a deal folks. Saying your done selling on ebay because you have to pay taxes is like saying you refuse to work because you do not want to pay taxes. Yes it sucks I agree but what are you going to do about it?
I have a seperate bank account for ebay. They deposit my proceeds into that account. All of my shipping comes out of that account.
And yes, you can deduct the "cost of goods" from every sale. Of course you can. No different than any other business. You get a 1099 stating you made $28,000 on ebay last year...you deduct a portion of your cell phone bill, your internet, your space in your house for your office and storage of inventory, your milage on your car to and from garage sales and the post office and such, your COST OF GOODS, your SHIPPING PAID (because ebay counts the shipping you receive from a buyer as income)
and other expenses like boxes, bubble wrap, Rollo Printer, Ring Light......and whatever.....now your taxable income is down to say $12,000.........
Set aside 25% of your sales income for taxes to be safe......it is what it is........still doable.....still fun....