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Tax question, do I deduct Sales Tax paid?
Hello. I am doing my taxes for the year for my eBay sales. I received my 1099-K from Ebay and I am deducting my expenses to determine my gross profit that is subject to Fed/State income tax. I always deduct the actual cost to ship items, eBay fees, refunds that I reimbursed customers for combined shipping, etc. Do I also deduct state sales taxes paid on my yearly sales. Based on my understanding, my 1099-k does not deduct state sales tax from my total income on my 1099-k. Any help is greatly appreciated.
Brian
3 comments
house*of*paws
Mentor2 years agoHi @pagesrunnursery
You didn’t collect taxes … so you can’t deduct them.
The taxes weren’t included in your income statement. eBay collected the taxes and sent them to the states’ treasuries BEFORE sending buyers’ funds to you.
pagesrunnursery
OP2 years agoThanks @house*of*paws
I never have deducted sales tax in the past when preparing my taxes. I just got confused because I printed out my total activity for 2023 and Sales Tax appears as a column on the spreadsheet. Upon closer consideration of the numbers, it does appear that sales tax is not included on the net or gross income totals, so it has no impact on my income side and should not be deducted. I guess sales tax paid per item is just provided as an FYI and has no impact on my tax return. Thanks for the feedback. Brian
house*of*paws
Mentor2 years ago@pagesrunnursery
You're very welcome!
Sellers are probably shown the sales tax since their fees are based on the total amount of buyers' payments ... including sales tax.