Social Security Number for 1099-K

[pbadome]

Listing Fees, high commissions including commission on shipping and handling, taxes, and now Ebay asked for my S.S. number, something that is always a "no no" to give out, especially over the internet. 
Apparently, the Feds wanted Ebay to collect Social Security numbers from anyone selling $20K or more, up until Jan. 1st., 2022 The new threshold is (drumroll please), only $600! Amazing and expected because this is the way everything is going; nothing is getting better. 
That being said, here's an issue that I ran in to. 
I listed and sold a camera on Ebay recently for $200, the buyer used the 30 Money Back Guarantee to ask for a refund. The refund was given, and I re-listed the same camera, and it sold again for $200. This Ebayer just did not pay, so I canceled it, and yes, I re-listed it a third time.
The camera sold and I was supposed to be paid $194 after Ebay was done chewing up the final price of $220 plus $10.00 for shipping. 
Ebay put the $194 payout on hold pending my S.S. number. Scroll back a bit and you'll see that the S.S. number is only required if you collect $600 or more. 
Well, on a chat with an Ebay "specialist", apparently, they include canceled and returned which means that the actual $194 was added to a return and a no-pay for a grand total of $630.
A 1099 is used to report earnings which I explained on the chat. I did not earn $600 but the "system" triggered a requirement for Ebay to obtain my S.S. number, how about that? 
If anyone can put a positive spin on this mess, I'm open for it. 

[rosachs]

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@richard1rst wrote:

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@jimsvinylvault wrote:

Interesting 'stuff'.  And since this topic has all of you 1099 experts involved, please help me understand:  Yes, I too will be impacted by the bloody 'lowering of the bar' from $20k down to a measily $600.......but so be it, there is nothing I can do about it.  BUT:

1)  When eBay issues the 1099, will it ONLY BE for the PURCHASE AMOUNTS.....and NOT INCLUDE what the collected for Shipping Charges; AND NOT INCLUDE what they collected for taxes?  Sounds like a dumb questions, but I have seen some of their software logic....and it stinks (e.g. new Listing Tool).

The 1099 will show all of the monies which have been processed into your account regardless of the source or purpose of the money. So, yes, it will show shipping charges and other amounts. It is then up to you when you file your tax return to itemize the amounts. Since you can deduct shipping expenses as a legitimate profit reducing expense then you must also show the shipping fees that your buyer paid you.

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Minor correction -- shipping expense is not what the customer paid you (think 'free shipping'), it's what you paid the carrier - USPS, FedEx, UPS.  You may be able to get that info from an eBay report, I've always just pulled it from my SixBit database.  Just be sure you can connect charge to sale - when I was shipping with First Class stamps, that became a bit of an issue.  In the end, I was allowed to deduct what I could document having used for shipping since it was relatively close to my USPS stamp purchase receipts.

This is why I use a CPA -- they do this literally for a living.  They know.

-Bob.

[richard1rst]

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@rosachs wrote:

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The 1099 will show all of the monies which have been processed into your account regardless of the source or purpose of the money. So, yes, it will show shipping charges and other amounts. It is then up to you when you file your tax return to itemize the amounts. Since you can deduct shipping expenses as a legitimate profit reducing expense then you must also show the shipping fees that your buyer paid you.

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Minor correction -- shipping expense is not what the customer paid you (think 'free shipping'), it's what you paid the carrier - USPS, FedEx, UPS.  You may be able to get that info from an eBay report, I've always just pulled it from my SixBit database.  Just be sure you can connect charge to sale - when I was shipping with First Class stamps, that became a bit of an issue.  In the end, I was allowed to deduct what I could document having used for shipping since it was relatively close to my USPS stamp purchase receipts.

Which exactly what I said: "you can deduct shipping expenses as a legitimate profit reducing expense" because it represents what you paid out. The monies the buyer paid you is booked separately as cash receipts.

What you pay for shipping (whether you offer free shipping or not) is a legitimate deduction on your P&L calculations.

BUT I also said "you must also show the shipping fees that your buyer paid you".

So if you charge your buyer $10 and it actually costs $8 then you book $10 as cash receipts and $8 as cash disbursements. Or whatever the actual amounts and discrepancies are.

[mam98031]

Instead of getting into the weeds of what is or isn't on the 1099K, IMHO it is much easier to remember that it reports ALL money received into your MP account BEFORE any deductions are taken for shipping, fees, refunds, etc.

PayPal did it and does it the same way, as do everyone responsible for sending these forms out.

[pbadome]

I left money on the table from three different jobs over the course of my career. They all asked me to pick up my last check, and I told them all you need it more than I do. That total was $700.
I owned my own business from 1983-2007 and for those 24 years no one could bribe me or tempt me. My largest customer threatened to throw me out and then did toss me out when I told him that "I've been thrown out of better places". I walked away from $220K in gross sales until a month later when they came back to me for a deal. 

As a shop steward for my Local in the Teamsters then again for my job in CSEA I've been offered money enough times until they understood who I am. Even the higher ups in the Teamsters handed me a check that "everyone" gets, I took it and flushed it down the toilet. 

I tell you this because I sense that you've never met anyone with integrity. Yes, the ball has always been in my court, and sometimes I take that ball, lay it down, and walk away just like this $194, can you say the same? 

[pbadome]

You actually just wasted time and a bit of typing. I'm far from worrying about paying taxes. I just protect my SS number when I'm online. Oh, yes, I do understand and I don't need an accountant for simplicity. 

[pbadome]

Best advice, good job, thanks. I am familiar with the 1099, I gave them out to people who worked for me part time over the 25 years I was in business. 

[pbadome]

Yeah, I did miss that. I also don't remember giving PayPal my SS number but I'll assume you're correct. Today, on the internet, my issue is with putting that information online, that's about all there is to it, thanks. 

[pbadome]

I agree, I read the history. My issue with Ebay was that I never reached the $600. No matter, it's behind me now, thanks. 

[pbadome]

Thanks. I appreciate the feedback, however, like I've said before on this thread, I do accept that Ebay's algorithm triggered this request, my concern is releasing my SS number online. But this is behind me now, it's all done. 

[pbadome]

The threshold for a 1099 was $21K, on the occasional sale that I make, I claim nothing because whatever I sell is below market value. 

[pbadome]

I hear ya'. While I agree, more often now people receive notices that their system has been breached and promise that they are doing everything to protect their personal information. 
My system was hacked last year and it was quite a bit of work to get back every penny that was stolen, but it was done. 
I'll buy from Ebay, but as for selling, I'll stick with other options. Thanks. 

[pbadome]

I agree, and part of being vigilant is not putting my SS number over the internet. 

[pbadome]

Yep, sad isn't it?

[bonjourami]

Actually, the threshold for 1099K was never $21k, that threshold was simply when PP would issue the 1099K, sellers have always been responsible to report all their Ebay sales.

[pbadome]

Good questions that I can almost guarantee will not be answered on this thread, thanks.