Question about Filing Taxes with resell hobby
Hello! My husband and I both work full time regular jobs and receive w2s. On the side, we both have a resell hobby. He resells shoes on Stockx and I resell clothing on Poshmark. This past year we both sold more than we normally do. However, neither of us qualified for a 1099-k on each of the sites, meaning we did not exceed 20k in sales and/or over 200 transactions. That being said, how do we report the income we did make on our taxes? Since we did not meet the threshold and consider it a hobby, do we have to report the income? Thank you!
Answer:
Amy, You will need to take a look at the Hobby Law Rules 1st. If you reported losses for 3 out of the last 5 years for your businesses, the IRS will consider this a hobby and disallow any deductions. They may send you correspondence regarding this as well.
Given the above information, you could report both of your incomes on a Schedule C and show a profit with each of your Schedule C's.
I hope this helps,
Jeanne Adams CPA
Firestone, CO 80504
Jeanne Adams
