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1099
I plan to stay under $600 in sales this year so I do not receive a 1099. Do I need to consider shipping fees collected, i.e., does the 1099 total sales figure include the shipping received? Thanks!
4 comments
tenbigdogs
Mentor3 years agoHi @gditt Any tax is on PROFIT not just income. If after deducting the cost of the item, seller fees, etc., there is a profit, that's what might be subject to tax. Your plan to limit your sales is not necessary. Good luck!
gosimus
Mentor3 years ago@gditt
< I plan to stay under $600 in sales this year so I do not receive a 1099 >
Is this because you just don't want to have to fill out the additional forms? Or do you resent having to pay the income tax? Because if it's the latter, I'll share a philosophical thought with you. It goes like this: It's better to have the money and pay the tax, than it is not to have the money.
gosimus
Mentor3 years ago@gditt
If you're considering Schedule C, then I suggest either that that you carefully research and scrutinize that form and/or that you get professional advice. Preferably do both.
I've examined 2022 Schedule C and I conclude that it requires you to file Schedule SE (Schedule C line 31/32); and then Schedule SE requires you to file Schedule 1 and Schedule 2 (Schedule SE lines 12/13). I stopped looking there, but I wouldn't be a bit surprised if the requirements for additional forms continue daisy-chaining.
I'm not a tax preparer and maybe there are exemptions that the instructions don't make you aware of; all I know is, that's what the forms say. Get professional advice, but first check out the forms yourself, so that you won't be entirely blindsided by the sticker shock.
disneyshopper
Mentor3 years agoThe 1099-K includes payments that you receive, which is the item price + shipping. Regardless of the amount of your sales, you need to include the amount with your federal tax return. You can also submit a Schedule C with itemized deductions (shipping costs, packaging costs, internet, mileage, etc). which will reduce the amount you owe the IRS.