1099-K from PayPal (tax form)

Great answers here and I have nothing to add but KEEP ALL RECEIPTS! eBay became a contracted tax collector last year. Not by their choice but the states that want that extra tax money in their coffers. What I still fail to grasp is that tax has already been paid on any used item you sell. Unless you make a profit, only the profit amount should be taxed. This amounts to tax on tax in my mind. Can anyone explain it better to me?  AB

The simple solution is to move out of the "there's no such thing as too much tax" socialist state you're in and move to one of the no income tax states where the inmates aren't in charge of the asylum.
That's my political opinion as an audiophile.
Seriously, if you can't neutralize the 1099 in Turbo Tax Deluxe, a competent tax preparer (local CPA firm that prepares taxes, not the the H&R Block types) can solve your problem in about 15 minutes.

I'm glad someone brought this up.
PayPal did this to me this and last year.

Can someone explain to me how it is legal to tax me for selling a product that I previously purchased new, and paid sales tax on, with money I was already taxed on when I earned it?

Last year they added what I sold off to my income which put me in the next tax bracket and I got hardly any tax return.

Better yet, can someone tell me an alternative for payment that we can trust and that won't rob us like this?

Forget this notion of "tax brackets". With very few exceptions, taxation is incremental. I.e. earning a bit more does not mean everything else if taxed more. Only that extra you earned is taxed at a higher rate than everything else. This is not a new concept.

Not only legal, but it has pretty much always been this way, the only difference is in the past, the government has not had the means to track and collect. Now effectively they do.  Most states have had taxes on used cars, boats, etc., anything where a transfer of ownership has to happen and can be tracked.

Thanks to all who posted very informative.  Also I'm amazed that there is not a "cost basis" associated with this "income" in the IRS doc.  Jeez.

I too used TurboTax for years until it got too complicated, my taxes that is.
Best thing is get a local CPA and do some tax planning as well, pays for itself.