PSA: 1099k from Paypal reporting tax collected by eBay in your totals

[gotclubs]

As I sit here reconciling every day from my 1099 to my own records for 2019, I notice that starting on 11/4/19 my 1099 includes the "sales tax collected by eBay" in my total for any transaction in which tax was collected.

Is this a dirty money grab by the IRS? The sales tax is not paid to us, nor would we have an easy way to track it in out own records. Paypal fees is an easy formula in a spreadsheet, same with eBay fees. Sales tax, that only shows up in the details of the paypal transaction, when a buyer is required to pay the sales tax, at a different rate depending on location, this is untrackable.

You should always reconcile your records to your 1099, but now you need to be extra vigilant. Refunds aren't included in your 1099 which is one reason you need to reconcile if you do a lot of business, now sales tax is included even though it was never paid to us.

[tools*]

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@gotclubs wrote:

As I sit here reconciling every day from my 1099 to my own records for 2019, I notice that starting on 11/4/19 my 1099 includes the "sales tax collected by eBay" in my total for any transaction in which tax was collected.

Is this a dirty money grab by the IRS? The sales tax is not paid to us, nor would we have an easy way to track it in out own records. Paypal fees is an easy formula in a spreadsheet, same with eBay fees. Sales tax, that only shows up in the details of the paypal transaction, when a buyer is required to pay the sales tax, at a different rate depending on location, this is untrackable.

You should always reconcile your records to your 1099, but now you need to be extra vigilant. Refunds aren't included in your 1099 which is one reason you need to reconcile if you do a lot of business, now sales tax is included even though it was never paid to us.

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The IRS has nothing to do with sales tax.

[mam98031]

First I don't reply much to these because to many do gooders, but what I will say is I know for a fact that what is reported to the irs is your total positive flow of cash, meaning no matter if a family member sends you cash or a  from a refund from a cancelled transaction, whatever, if its incoming into your PP account its reported they "do not adjust your income on a refund", I had to go back through last years paper work and submit everything to the IRS because my actual shown income, not minus fees, shipping, anything, did not match what was reported by ebay/paypal.

There is a very good reason for this.  1099K's nor PP have EVER reported Gross Income to IRS.  The amounts reported on the 1099K are Gross Receipts.  That is different and not to be confused with income as many do.  

It is a common mistake by many.  On the same page that you can print your 1099K on PP, there is a Reconciliation report you can download to help you get to your Gross Income.  Also on the IRS Form Schedule C there is a section on the form so you can adjust from Gross Receipts to Gross Income.

[chapeau-noir]

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@gotclubs wrote:

Because I only have one account I use for buying and selling, and it is all linked to the same checking account. I suppose it’s time to set up a new one.

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I don't have a business account, just a personal account (I make well over 20k here, I've just never thought about changing anything) and the reports are available under Activity ----> Statements (over to the right under four horizontal bars) and for the last three months (which would include the changing in bookkeeping from 11/4) ---->custom. Once under "custom" click "activity download" and you'll see the option for the past three months. Hit "create report" and it will say that they'll email you, but the report should appear pretty quickly under the selection boxes as a csv file - just open that and download.

ETA: @gotclubs 

[lacemaker3]

@chapeau-noir 

@gotclubs 

Could you please let us know if the report page, and the reporting options you access this way with a Personal Account, are the same as I get with a (grandfathered) Premier Account (as in post 9 )? I'm pretty sure I get the same report options as a Business Account does, it's just not as obvious how to find them anymore.

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@chapeau-noir wrote:

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@gotclubs wrote:

Because I only have one account I use for buying and selling, and it is all linked to the same checking account. I suppose it’s time to set up a new one.

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I don't have a business account, just a personal account (I make well over 20k here, I've just never thought about changing anything) and the reports are available under Activity ----> Statements (over to the right under four horizontal bars) and for the last three months (which would include the changing in bookkeeping from 11/4) ---->custom. Once under "custom" click "activity download" and you'll see the option for the past three months. Hit "create report" and it will say that they'll email you, but the report should appear pretty quickly under the selection boxes as a csv file - just open that and download.

ETA: @gotclubs 

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[chapeau-noir]

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@lacemaker3 wrote:

@chapeau-noir 

@gotclubs 

Could you please let us know if the report page, and the reporting options you access this way with a Personal Account, are the same as I get with a (grandfathered) Premier Account (as in post 9 )? I'm pretty sure I get the same report options as a Business Account does, it's just not as obvious how to find them anymore.

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@chapeau-noir wrote:

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@gotclubs wrote:

Because I only have one account I use for buying and selling, and it is all linked to the same checking account. I suppose it’s time to set up a new one.

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I don't have a business account, just a personal account (I make well over 20k here, I've just never thought about changing anything) and the reports are available under Activity ----> Statements (over to the right under four horizontal bars) and for the last three months (which would include the changing in bookkeeping from 11/4) ---->custom. Once under "custom" click "activity download" and you'll see the option for the past three months. Hit "create report" and it will say that they'll email you, but the report should appear pretty quickly under the selection boxes as a csv file - just open that and download.

ETA: @gotclubs 

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Yes - I select the 'last three months' option and it produces the report.   It will show the sales tax, on mine it's column "T" and you do the usual of fixing 'general' to currency and adding it, etc.

[mam98031]

Can you run the reports for a date range?  For an entire year?  Can you get the details of each transaction in a report?

[gotclubs]

@tools* 

The reason I bring up the IRS is not because of the sales tax, it's because of the way the 1099 reports the sales. This in no way can hurt tax revenue, but it for sure could help them. There are plenty of people out there who will not reconcile or reconcile improperly. Until this thread I had no idea about the sales tax, or that paypal was imposing their 2.9% fee on that tax. I suspect many others are unaware of that also and will report the total on the 1099 including the sales tax.

[gotclubs]

@luckythewinner 

I had no idea about the difference in fees for an international sale. I def need to switch to a business account.

@lacemaker3 

I don't have the same screens that you do, need to upgrade to a business account.

@nobody*s_perfect 

I already have a name and a TIN

@the*dog*ate*my*tablecloth 

was never trying to fly under the radar, I just never switched to a business account as I kept all of my own records. I've paid my taxes each year since I started my business

[gotclubs]

I'm not sure why but my CSV files only have 7 columns.

Date, ID, Email, Payee Account,Received Amount, Received Currency, Received amount in USD.

[gotclubs]

So I switched to a business account, when I click the reports tab, the reports link goes away and I only have the activity download area. The part that says reports is not there

[buyselljack2016]

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@gotclubs wrote:

@tools* 

The reason I bring up the IRS is not because of the sales tax, it's because of the way the 1099 reports the sales. This in no way can hurt tax revenue, but it for sure could help them. There are plenty of people out there who will not reconcile or reconcile improperly. Until this thread I had no idea about the sales tax, or that paypal was imposing their 2.9% fee on that tax. I suspect many others are unaware of that also and will report the total on the 1099 including the sales tax.

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The "selling announcements" section in the Sellers Hub is a good section to keep on your radar.  This info was there as an announcement on or about 11-4-19. If a message is missed in email, or eBay messages,  it is generally there.

 

[gotclubs]

Disregard, I guess it just took time for PayPal to catch up. I can now download the full report. Thanks for everyone's help

[the*dog*ate*my*tablecloth]

There are some sellers who believe that keeping a personal account allows them to bypass any IRS requirements. Some sellers, that’s why I said anyone. I didn’t necessarily mean you.

[dtexley3]

I still have a personal account.  I see no reason to switch as the reports available have all the information needed to total up the deductions for filing taxes.  I've not found anything missing so far.

[whybuynewguy]

There is still no access to the sales tax information eBay collected from 1-1-19 to 11-3-19. There was some "spotty reporting" by eBay earlier in the year...but stopped completely in March 1-Nov 3. 

The PayPal business report only starts to pick up the tax reporting again from Nov. 4th 2019. That's when Ebay invoices started to show the tax collected again on the ebay invoices.

Remember what we all were told...you don't have to do anything....we (ebay) will handle it).

Basically sellers, eBay because of the huge "fail" in their reporting, has all sellers because of "gross" 1099K revenue reporting will have to pay income taxes on the taxes Ebay collected  sales tax...that we never touched a dollar because we cannot get the information.

I'm sorry the "later this year" answer in the Town Hall Meet today to when they will have the reporting is not acceptable. The IRS is not going to accept "later this year" to  pay our taxes.

Then I have to ask the questions...did eBay collect the monies from our buyers and never paid the states????

We need answers...and answers now. This is a huge fail!

If I am missing something here...please...I am all ears!