1099 taxes

[iodlee]

Guys - does eBay look at the total sales or net sales (net of taxes and selling costs) to determine who needs to receive a 1099 - which number were to exceed $600

 thx

[dbfolks166mt]

     The $ figure on your 1099 will be the amount of money that has passed through eBay. It will be total amount the buyer paid you (item cost + shipping cost). EBay has no way to know what your selling expenses are/were. The figure will include items that you refunded for, were scammed out of or were returned. 

[iodlee]

If you go to seller hub and click on total sales and then filter for 1 year, there are 2 results it gives you:

Total sales (Includes taxes)

Net sales (Net of taxes and selling costs)

Ebay certainly knows some of my selling costs, they just don't know the cost of product. Hence,  the question again - which number will they count?

Thanks

[pburn]

As the previous reply stated, the 1099-K issued by eBay will include what the buyer paid to you--the amount the buyer paid for the item plus any buyer-paid shipping & handling. The 1099-K will NOT include any buyer-paid sales tax collected by eBay.

Here's a good help page for you to read and bookmark for future reference.

eBay and Form 1099-K 

[pburn]

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@iodlee wrote:

If you go to seller hub and click on total sales and then filter for 1 year, there are 2 results it gives you:

Total sales (Includes taxes)

Net sales (Net of taxes and selling costs)

Ebay certainly knows some of my selling costs, they just don't know the cost of product. Hence,  the question again - which number will they count?

Thanks

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The 1099-K issued by eBay will not reflect either of those figures highlighted in your post above.

• The figure will not include sales taxes paid by the buyer to eBay.
• The figure will not net out selling costs.

The figure will include:

• The total price* the buyer paid for the item.
• The price the buyer paid for shipping & handling.

*Total price may include free shipping.

In other words, neither of the figures you've cited from the seller hub will be an accurate reflection of the 1099-K figures. Tax implications will have to be computed based on the 1099-K figure, unless a seller has maintained those figures manually.

[nobody*s_perfect]

The 1099-K will include the total amounts paid by buyers for items, shipping and handling. It does not include any sales tax that the buyers paid.  It doesn't deduct anything -- returns, credits, postage labels, eBay fees, etc.

[iodlee]

I don’t do this for a living and I just exceeded $600. I know this is not a tax related forum, but given that all the personal electronic devices like phones that I sold for purchased for a higher price than what they were sold for I’m hopeful I don’t have to pay any taxes. I know there are other things like depreciation that go into figuring out true value. Anybody else has ideas on how to treat this? I don’t want to hire a tax accountant and pay him 300 to figure out I owe $200 in taxes through this 1099

[stainlessenginecovers]

You don't need to hire an accountant. You can use HR Block (For example) and they can do your taxes.

For items you've sold, if you have the original receipt, that is your 'cost of goods'.  

[pburn]

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@iodlee wrote:

I don’t do this for a living and I just exceeded $600. I know this is not a tax related forum, but given that all the personal electronic devices like phones that I sold for purchased for a higher price than what they were sold for I’m hopeful I don’t have to pay any taxes. I know there are other things like depreciation that go into figuring out true value. Anybody else has ideas on how to treat this? I don’t want to hire a tax accountant and pay him 300 to figure out I owe $200 in taxes through this 1099

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 IMO, it's really not the very best idea to get tax advice from random strangers on the internet, but there is value in learning the experience of others. There are also plenty of reliable resources available to answer questions, like your local IRS Taxpayer Assistance staff. You could also invest in a reputable online tax program like TurboTax (which I've never used, so that's not an endorsement). That kind of software would probably let you keep your figures updated all tear long, making it quicker at tax time.

[iodlee]

Wow, I didn’t know that so my cost of goods is exactly double of the sale value in most cases and I have all receipts

[mtgraves7984]

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@iodlee wrote:

Wow, I didn’t know that so my cost of goods is exactly double of the sale value in most cases and I have all receipts

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@iodlee 

COGs, FVFs, shipping costs, supplies, etc., etc., etc., will all be what you'll enter on Schedule C.

[dbfolks166mt]

Wow, I didn’t know that so my cost of goods is exactly double of the sale value in most cases and I have all receipts

      As others mentioned talk to a profession tax preparer but if you have a loss from your eBay transactions, depending on how you file and what the tax professional tells you, the loss may offset part of the other tax liabilities you may have or increase your refund. There are limits to how many times you can claim a loss before the IRS will classify you as a hobby seller but your tax professional can help you with that. 

     Even if you do your own taxes most of the major tax software companies, like H&R block, will offer call in assistance if you have questions. 

[ms.rodriguez*]

Remember that you have alot of costs that are associated with selling.  This includes the cost of tape, paper, printer ink, shipping supplies. You can write off a portion of the cost of a camera or ipad or whatever device you use for selling, the cost of the printer.  Even a PORTION of your internet costs.  Remember a portion since most likely other people in your home use the internet too.  

I don't have receipts for many of my items . They were purchased years ago and sold for a fraction of the original price. I am not going to sweat this unless the IRS asks for receipts.  It's common sense that most folks won't have the receipts for a video game they bought their kid 15 years ago and sold for 9.99.  Anyway, a transaction like this is a loss. 

Start documenting. Start saving receipts too.  

[iodlee]

Does this mean we won't be getting 1099's for 2022?

IRS announces delay for implementation of $600 reporting threshold for third-party payment platforms...

[lacemaker3]

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@iodlee wrote:

Does this mean we won't be getting 1099's for 2022?

IRS announces delay for implementation of $600 reporting threshold for third-party payment platforms...

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You won't get a 1099-K unless you exceeded the former threshold of $20,000 and 200 transactions, unless your state has lower threshold(s). They have delayed the implementation of the new threshold until next calendar year, so it will affect sales starting Jan 1, 2023.

I looked at one of your listings, and the item location was in New York state. New York uses the same thresholds as the old federal thresholds, so you would not receive a 1099-K unless you go over $20,000 and 200 transactions.

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@iodlee wrote:

Wow, I didn’t know that so my cost of goods is exactly double of the sale value in most cases and I have all receipts

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Because of that, you will want to report the income and file the Schedule C, so that you can use the deduction to reduce the amount of other income that you have to pay taxes on.