In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, of Dr. Friday’s Tax and Financial Firm, offers valuable insights on handling 1099-K forms for individuals selling personal items. The IRS allows the declaration of these sales on a Schedule 1, letting sellers write off the sold items up to the amount listed on the 1099-K. Dr. Friday cautions, however, that this can get tricky for small business owners who might mix personal sales with business transactions. She warns that the IRS could request receipts, especially for significant sales volumes, and advises sellers to maintain clear records to differentiate personal sales from business income, thereby avoiding potential audit triggers.
Transcript:
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.
What do you do if you do receive a 1099 K but it really is just selling your household goods? Well, the IRS has actually given us some information on that. They said we can file it on a Schedule 1, and you can write off those goods up to the dollar amount of the 1099 K. Here’s the catch, guys: if you’re running a small business and you’re saying, “Hey, I’ve got a bunch of old Turner chairs and lamps and all this, and you’re selling them on the internet,” the IRS could ask you for receipts. This may have been grandma’s stuff in the attic, so be careful when you’re looking at how much money you’re selling on the internet because it may be a way of catching you in an audit.
You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.