eBay Taxes, Best Tax Software for eBay Sellers and the eBay 1099-K (2026)

The best tax software for eBay sellers is filing software that handles a Schedule C with cost of goods sold and reads the eBay 1099-K correctly, because the 1099-K reports gross sales before eBay's fees, refunds and your cost of the items. eBay collects and remits sales tax for you, so what you still owe is income tax and self-employment tax on the profit. For a one-state reseller filing in 2026 the realistic options are FreeTaxUSA at $15.99 with state, TaxFile at $89 a year with the state included and the 1099-K read for you, H&R Block Self-Employed at about $122 with state, TurboTax Premium at $139 plus state, and Keeper at $199 with a tax pro signing the return.

First, are you a reseller or someone clearing out a closet?

eBay taxes split two ways, and the software you need depends on which side you are on.

• Resellers buy items to sell at a profit: thrift and estate sale flips, retail arbitrage, sneakers, trading cards, parts. That is a business. The income goes on Schedule C, the cost of what you sold goes on Part III of Schedule C as cost of goods sold, and profit of $400 or more also owes the 15.3 percent self-employment tax.
• Personal sellers sell their own used things. A couch bought for $900 and sold for $300 is a loss, and a loss on a personal item is not taxable income. The IRS tells you to report a 1099-K amount like that at the top of Schedule 1 with an offsetting adjustment, so the gross is shown and cancelled. A personal item sold for more than you paid, such as a collectible that went up, is a capital gain on Form 8949 and Schedule D.

Most people searching for eBay tax software are the first group, and this comparison is built for them. If you are only in the second group with a gain, pick a product that prepares Schedule D. TaxFile does not, and we say so in the table below.

Best tax software for eBay sellers compared

Prices are for tax year 2025 returns filed in 2026, for one state, with no add-ons. TurboTax and Keeper were read on their own pricing pages. FreeTaxUSA and H&R Block figures come from independent reviews dated January and April 2026. Prices move during the season, so check the checkout.

Two things in that table matter more than the headline prices. TurboTax Deluxe at $79 covers only the income side of a business, so a reseller who starts there gets moved to Premium once expenses go in. And H&R Block lists its Self-Employed tier at $85, a little under Premium at $89, so a reseller should compare Self-Employed, the tier built around a business with expenses. We price both of those brands against the cheapest option on the same returns in FreeTaxUSA vs H&R Block.

What the eBay 1099-K reports, and what it leaves out

eBay's own help pages are specific about this. The gross amount on the form "doesn't include any adjustment such as credits, discounts, fees, refunds, or any other adjustable amounts." Sales tax and canceled transactions are excluded. So Box 1a is what buyers paid you before eBay took anything and before any return was refunded.

• Who gets one: for 2025, sellers whose gross payments passed $20,000 and 200 transactions, the federal threshold restored in July 2025. eBay also issues forms at lower thresholds for sellers in Arkansas, the District of Columbia, Illinois, Maryland, Massachusetts, Montana, New Jersey, Rhode Island, Vermont and Virginia.
• When and where: issued by January 31. In Seller Hub, open the Payments tab, choose Taxes, then 1099-K details, then Generate. The same report gives a transaction-by-transaction breakdown of the gross, which is what you reconcile against. A paper copy only arrives if you opt out of electronic delivery.
• Backup withholding: eBay withholds 24 percent of payments if you never gave it a valid taxpayer ID or the IRS reports a name mismatch. That withholding is a credit on your return, so make sure your software picks it up from the form.

No 1099-K does not mean no tax. A reseller under the threshold still reports the profit, and a return is required once net self-employment earnings reach $400. The general rules for the form, across every platform, are on our Form 1099-K page.

What filing straight off the 1099-K costs a reseller

Take a reseller who flips thrift and estate sale finds. The 1099-K shows $31,000 across about 700 orders. Here is what sits underneath it.

The fee line is bigger than most sellers expect, because eBay charges its final value fee on the whole order, shipping and sales tax included, not just the item price. Self-employment tax on $9,310 is about $1,315. A seller who subtracts only the cost of the items and files on $21,200 pays about $2,995 in self-employment tax, roughly $1,680 more, plus around $1,300 of extra income tax in the 12 percent bracket. That is about $3,000 lost on fees, labels and returns that were already paid once.

That gap is what TaxFile is built to close. You upload the 1099-K and your other forms, the figures are read into the right boxes, and the software lists the deductions a reseller usually carries (final value fees, promoted listings, refunds, shipping and packaging, sourcing mileage, storage, a phone) with a short note on each. You confirm or remove each one before anything is filed. The Schedule C software page shows how the return comes together, and the tax deduction finder lists every category it checks.

Records the software will ask for

Cost of goods sold is where resellers lose the most, because nobody keeps the receipt for a $4 shirt that later sold for $38. The IRS expects you to support the cost of what you sold, so keep what you can: thrift and estate sale receipts, bank and card statements showing sourcing purchases, and a simple log of what each item cost. If you carry stock at year end, the Part III figure is opening inventory plus purchases minus closing inventory, so count what is on your shelves on December 31.

eBay gives you most of the rest. The 1099-K details report reconciles the gross, and the Payments tab in Seller Hub exports fees, refunds and shipping labels by month. If you keep books in QuickBooks and your bank only hands out PDF statements for the account your eBay payouts land in, you can convert those PDF bank statements into a QuickBooks file instead of keying each deposit by hand. That turns the fee and refund lines above into a report you run in minutes.

Which tax software should an eBay seller buy?

• Reseller who knows the numbers and wants the cheapest e-file: FreeTaxUSA at $15.99 with state.
• Reseller in the first or second year, not sure what counts: TaxFile at $89 with the state included. The 1099-K is read for you and the deductions are listed before you approve.
• Reselling business plus personal items sold at a gain: FreeTaxUSA or TurboTax Premium, because both prepare Schedule D. TaxFile does not.
• Wants someone to take it over: an H&R Block office or Keeper Standard at $199. The tax preparation fees page shows what a preparer usually charges for a Schedule C.

A growing store should also plan for quarterly payments. eBay withholds nothing from payouts unless backup withholding applies, so once you expect to owe $1,000 or more for the year the IRS expects estimated tax four times a year. The quarterly tax calculator sizes the next payment from your year-to-date profit. Etsy sellers face the same 1099-K issue with different fees, covered in tax software for Etsy sellers.

Do I have to pay taxes on eBay sales?

Yes, on the profit, if you buy things to resell. Sales minus refunds, eBay fees, shipping and the cost of the items is business income on Schedule C, and profit of $400 or more also owes self-employment tax. Selling your own used items for less than you paid is not taxable, because there is no gain.

How do I get my 1099 from eBay?

eBay posts Form 1099-K by January 31 if you qualify. In Seller Hub go to the Payments tab, select Taxes, then 1099-K details, then Generate to download the form and a detailed transaction report. In My eBay it sits under Payments, in the Payment reports and taxes section. eBay does not issue a 1099-NEC to sellers.

Do I pay taxes on items I sold on eBay for less than I paid?

No. A personal item sold at a loss produces no taxable income. If it appears on a 1099-K, the IRS says to report the payment at the top of Schedule 1 with an equal offsetting adjustment, so the net is zero. Items you bought to resell are different: those are inventory, and a sale below cost reduces your Schedule C profit.

What is the eBay tax threshold for 2026?

The federal 1099-K threshold is more than $20,000 in gross payments and more than 200 transactions, restored permanently by the July 2025 tax law. Ten jurisdictions set lower state thresholds, including Maryland, Massachusetts, New Jersey and Virginia. The threshold only decides whether eBay sends a form. Profit from reselling is taxable at any amount.