Bookkeeping Question

[xpress4]

I hope this question isn't too foolish. I'm relatively new to the process of keeping track of transaction details. I'm using a spreadsheet and, before I get too far into the year and have to fix something, I want to make sure I understand.

Ebay takes care of sales tax on the backend and then we get a form at the end of the year showing how much tax they charged and paid a seller's transactions. Am I correct in my understanding?

And, if that's true, is there any reason for me to record the tax amounts on each transaction in my sheet when I'l just get the  tax form from them later? It seems the only thing I really need to track are cost of item, sales price, and transaction fees. Right? 

Thanks!

[monica-sells]

This is a sample of a 'simple' spreadsheet i use for a smaller account....

reading left to right these numbers are simply copied from the order details page.

Sale is the TOTAL Sale (item + shipping)...Item is the item price..Sales Tax (is actual)... Total is Sale (-) Sales Tax...then we have the formulas....

(-) Fees...Net Sale....(-)Shipping...and the NET for this listing...

I happen to know the cost of each item for this worksheet, so it is on there, too. All the rest is just percentages for me

all of these in this format are also available from ebay Reports in an excel form you can manipulate to your liking...

I just chose to do this "Lot" like this.....

[dbfolks166mt]

     There are no, well almost no, foolish questions. Sales tax is irrelevant for you from your book keeping perspective since as you stated eBay collects that from the buyer and remits it to the appropriate state. It is money you never receive or disburse. 

     I believe the "tax form" you are referring to is the 1099-K that eBay sends you at the end of the year if the total funds processed exceed either the Federal or the State level issuance requirements. This is the gross amount of funds that were processed and does not reflect any eBay selling expenses. Your spreadsheet should contain several pieces of information some related to eBay some which may not be. What you should keep track of. 

1. Total buyer paid - Sales tax (these are the funds that factor into your gross)

2. Transaction fees 

3. Shipping cost regardless of whether you buy the label through eBay or elsewhere. 

4. Cost of goods sold i.e. what you paid for the item when YOU purchased it. 

5. Supplies you purchased, mileage and all other tax deductions you will claim. You can look at the IRS 

     help file for the Schedule C to give you a more detailed list of what all of those are.

     You way wan to talk with a tax advisor before you get too far down the road with your selling and you have to play catchup on your books. 

6. Mileage

[chapeau-noir]

The eBay transaction report does have a column for state taxes, but that's because it basically tracks everything in any transaction. I don't bother with it when doing my taxes. It's money that is not reflected in revenue (i.e., 1099) so doesn't have to be tracked for tax purposes.

[wastingtime101]

Hi @xpress4 . Have you downloaded a transaction report? You may find it easier to download these reports, then customize them to your needs (add your costs and expenses) rather than manually keep track of payments and fees.

https://www.ebay.com/sh/fin/reportslanding

If you sell enough throughout the year for eBay to generate a 1099-K form for 2024, here's some info that can help:

Deadline for eBay to release 1099-K forms is Jan 31st each year. They will be posted on your payments section here:
https://www.ebay.com/sh/fin/taxforms

Rundown on eBay 1099-Ks:
https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

You can go to this page and generate a CSV report and you'll see what's counted on your 1099-K at the transaction level.  https://www.ebay.com/sh/fin/taxdetails

"Your 1099-K Details report shows all the orders that factored into your gross amount of payments. The report also provides other details, such as transaction fees, which may be relevant when preparing your taxes."

There's a guide published here where you can further drill down and get reports for expenses and refunds: https://www.ebay.com/mes/taxguide?sh=true

[xpress4]

Wow! Thank you all. This is EXACTLY the information I was looking for. Appreciate this very much 😀

[slippinjimmy]

You can save yourself a lot of effort if you use the Transaction Report eBay provides, it includes all the numbers you will need, Sales, Shipping Charged, Shipping paid (if printed via eBay), Returns/Refunds, Sales Tax collected by eBay etc.

Since you have some spreadsheet skills you can download the .csv file, modify it to suite you specific needs and sum the columns that you want totals for.

https://www.ebay.com/help/selling/fees-credits-invoices/reconciling-ebay-sales-transactions?id=4847#...

As far as Sales Tax collected by eBay, the "form" you mention, if this is the 1099-K for that eBay sends to the IRS (and provides you with a copy) this DOES NOT include Sales Tax collected by eBay on your behalf and unless you are registered in your State to collect Sales Tax (non-eBay sales) you don't need to concern yourself with this at all. If you are registered to collect local Sales Tax then you may need this info to file your Sate Sales Tax return, you can get the numbers via that same Transaction Report, I say "may" because every State has different requirements for reporting.

[caldreamer]

EBAY collects sales tax and remits to the States on your behalf.    You do NOT get any statement showing how sales tax EBAY collected.   You do NOT need to track sales tax.

EBAY has "easy to read" 1-page report that shows YTD totals for (gross sales/order, refunds, EBAY fees, shipping expense).   You must report "gross sales" to IRS (then take business deductions:  refunded merchandise, EBAY fees, shipping expense (cost of print labels), cost of goods sold, mileage, packing materials, etc.   You only pay income tax on "net amount" after all expenses deducted.

GROSS SALES

- Refunds

- EBAY Fees

- Other Expenses

= TAX INCOME

You should create a spreadsheet for your inventory bought + sold.    IRS requires that you report "beginning inventory on hand January 1st" and "ending inventory December 31).   You use the same spreadsheet FOREVER (just keep adding or subtracting inventory).   

You should create a separate spreadsheet to track your mileage and other expenses.

[dbfolks166mt]

You should create a spreadsheet for your inventory bought + sold.    IRS requires that you report "beginning inventory on hand January 1st" and "ending inventory December 31).   You use the same spreadsheet FOREVER (just keep adding or subtracting inventory).   

      For most small business sellers the IRS does NOT require you to report inventory and it would be silly for exempt sellers to do so. You can refer to the Schedule C instructions on when you are required to report inventory and when you are exempt. If you are required to report inventory you are generally also required to utilize accrual accounting for your records and declare it on your schedule C. 

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf 

You should create a separate spreadsheet to track your mileage and other expenses.