How do I know when I am getting close to the $600 for a 1099?

[rrcary]

According to my Seller Hub, my "Order Total", which is the sum of all paid orders, including shipping, taxes, and fees for 2023 is $621.59.  My "Item subtotal" which is the sum of all items in 2023, is $457.82. Which of these is used to determine whether I will receive a K1099 for tax purposes? 

[buyselljack2016]

@rrcary 

1099 is buyer payment minus sales tax amount.

[ebooksdiva]

eBay will contact you for updated information like your SS # when you reach the 1099 threshold.

[monica-sells]

the total of all sales processed for you (minus) sales tax....

I think the number you want is on this page:

(left column)

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

[dbfolks166mt]

     You are already there. The 1099-K reflects the financial gross amount processed through your sales. In essence the item cost + shipping. The shipping costs, eBay fees, returns, refunds along with any other non-eBay selling costs become deductions to the gross amount when you file your taxes. 

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

[nobody*s_perfect]

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@dbfolks166mt wrote:

     You are already there. The 1099-K reflects the financial gross amount processed through your sales. In essence the item cost + shipping. ...

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But the OP said, " the sum of all paid orders, including shipping, taxes, and fees for 2023 is $621.59. "  So if eBay collected more than $21.59 in sales tax then they haven't hit $600 yet.

[slippinjimmy]

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@ebooksdiva wrote:

eBay will contact you for updated information like your SS # when you reach the 1099 threshold.

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eBay generally starts asking for this info when you get close, if you don't provide it they will put a hold on funds that will not come off until you comply. eBay does not wait until you have crossed the line as that would make eBay a violator of IRS rules.

The OP is almost certainly below the threshold but not by much. $600 in sales with a 7% average sales tax rate would be a total of $642.

[buddyboyusa]

How do I know when I am getting close to the $600 for a 1099? The IRS will show up on your doorstep.

[chapeau-noir]

Nobody gets out of this alive unless you're billionaire.

[dbfolks166mt]

@dbfolks166mt wrote:

     You are already there. The 1099-K reflects the financial gross amount processed through your sales. In essence the item cost + shipping. ...

But the OP said, " the sum of all paid orders, including shipping, taxes, and fees for 2023 is $621.59. "  So if eBay collected more than $21.59 in sales tax then they haven't hit $600 yet.

     The OP was a bit confusing. I totally get where they got the $621.59 which as you stated includes the sales taxes. What I could not figure out was where they got the $457.82 figure unless they are deducting both the sales taxes, shipping cost and possibly the fees from the total gross. 

     One of those sellers trying their best to stay under the $600 threshold to avoid the 1099 and paying taxes on the income. I remember a number of sellers doing this last year only to be caught by the delay in the $600 threshold and the sales they missed out on for the year because they stopped selling. 

[chapeau-noir]

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@dbfolks166mt wrote:

@dbfolks166mt wrote:

     You are already there. The 1099-K reflects the financial gross amount processed through your sales. In essence the item cost + shipping. ...

But the OP said, " the sum of all paid orders, including shipping, taxes, and fees for 2023 is $621.59. "  So if eBay collected more than $21.59 in sales tax then they haven't hit $600 yet.

     The OP was a bit confusing. I totally get where they got the $621.59 which as you stated includes the sales taxes. What I could not figure out was where they got the $457.82 figure unless they are deducting both the sales taxes, shipping cost and possibly the fees from the total gross. 

     One of those sellers trying their best to stay under the $600 threshold to avoid the 1099 and paying taxes on the income. I remember a number of sellers doing this last year only to be caught by the delay in the $600 threshold and the sales they missed out on for the year because they stopped selling. 

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Am I allowed a moment of schadenfreude for this?

[mam98031]

Remember the 1099K gets issue for the total amount of money that came INTO your MP account.  It is your Gross Receipts.  It is the money you receive BEFORE any deductions for FVFs, Shipping, product, refunds or anything else.

You will get the chance to subtract your costs from the total on the 1099K and then you taxable income would be what is left after costs.

[slippinjimmy]

The OP knows all of that, they just want to avoid having to actual report eBay revenue.

FYI - The OP ended all of their active listings shortly after posting.

[mam98031]

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@slippinjimmy wrote:

The OP knows all of that, they just want to avoid having to actual report eBay revenue.

FYI - The OP ended all of their active listings shortly after posting.

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Thank you @slippinjimmy 

Whoops too late.  They seem to have made enough that they will receive the 1099K.  

What most don't seem to understand is that this is likely not enough income to cause them to have to pay any additional income taxes.  And if there were some it would be a very small amount.  People just seem to get scared when you talk about the IRS and taxes and logic goes out the window.

[reallynicestamps]

It doesn't matter, except that it makes your income tax a little simpler.

You are taxed on your whole income, including the first dollar you earn on eBay (or FaceBookMarketplace).

Then you take your deductions (including your shipping costs and eBay fees) from that total income.

The 1099 form makes it easier to know how much you have earned and from that you can work out your deductions.

But form or no form... your income must be declared.

@slippinjimmy  If the OP is registered for Managed Payments, wouldn't eBay already have their SSN?