Unless I’m misinterpreting the tax code, a seller who doesn’t make enough taxable income to owe income tax would still be required to pay self-employment tax if their net earnings from eBay sales exceeds $400. If correct, low-income and retired sellers who insist they don’t have to file are going to run into a problem if the IRS gets a 1099k for their eBay sales.
The IRS website explicitly states that even if someone is already receiving Social Security, they are still liable for the self-employment tax.
Without a tax filing that deducts expenses, would the IRS treat the full amount on the 1099k as income, and bill the individual for unpaid tax?
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