Reporting eBay Earnings

Many people want to know if they need to report the money they made through a sale on eBay. The answer is yes, you should report it because you will owe taxes on that income. Whether you sold something as a hobby or you have your own business, it was income and needs to be taxed.
eBay profits are not tax exempt so income from all sources are subject to income tax. You are considered self employed if you are making a profit by selling on eBay and any amount over $400 needs to be reported on your tax return. This is done by using the form 1040 and then attach Schedule C or C-EZ. If you happen to be incorporated, a separate business return is needed.
Some people have the thought that they are just selling for fun and they have a regular job on the side. Doesn’t matter, income is income and all income is taxed. Even if you just sell collectibles, make that choice before you list anything on eBay. If your hobby is your eBay income, you cannot deduct any expenses.