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Sales Taxes Relative To $600 1099 IRS Reporting Threshold
Does anyone know if the state sales taxes that ebay collects on your sales are counted toward the $600 in total sales which triggers the 1099?
I know shipping costs are counted as "sales" but what about state sales taxes?
As sellers, we never even receive any of the state tax money because ebay collects it directly.
Like a lot of people, I am ceasing all sales when I get close to $600 because it simply isn't worth the grief
of doing a detailed accounting to establish taxable income and potentially triggering an audit. I sell stuff on ebay to clean out my closets and get rid of old stuff that I don't use. Because of the stupid law the democrats passed in 2021, even very casual sellers like me have to deal with this nonsense now.
They should go back to the $20K sales threshold that they had before to address people who actually have for-profit businesses selling on ebay and leave the rest of us alone. But, here we are.
kh-phdan
·2 years agoThis topic is now closed at the request of the OP.
Thanks for understanding.
fern*wood
·2 years agoThe 20k threshold you mention was only to receive a 1099k. It did not mean under 20k you were not supposed to report those sales when you filed.
house*of*paws
·2 years agoHi @semi_midwestern
Do you realize that you will likely deprive yourself of earning MUCH more money than any tax you'd pay if you stop selling because you may be close to $600? You are supposed to be reporting your income regardless of whether you receive a 1099 ... most of which will NOT be taxed because you'll have offsetting expenses.
What is it about taxes that is so abhorrent to you? Collecting taxes is the only way a country has to run its government: armed forces, infrastructure, and loads of other things we can't live without.
semi_midwestern
OP2 years agoWay too political of an answer and not at all helpful.
My taxes are complicated enough already, thank you. I sell casually on ebay, a few used items here and there that I no longer use; closet cleaning, garage sale type stuff. It would be impossible to do a profit and loss on these items as I have no receipts for stuff that I bought 10+ years ago. And apparently, the IRS assumes if you sold something for $50, it is a $50 taxable profit unless you have the original purchase receipts which is ridiculous, but here we are.
It's just not worth the grief to fill out more tax forms and invite the IRS to audit me
over the used crap that I sell on ebay for much less than I paid for it 10+ years ago.
If someone is doing tens of thousands of dollars in sales of new items conducting a for-profit business on ebay, that is another matter. Small sellers like me cleaning out their closets of ten year old used stuff shouldn't be forced to report sales to the IRS. it's ridiculous. They should revert back to the $20K sales threshold, $600 is absurdly low.
I've been selling casually on ebay for over 20 years. Every year it gets worse in terms of hassle and fees.
Anyway, thanks to the few people who submitted helpful replies. The rest, not so much.
luckythewinner
·2 years agoDoes anyone know if the state sales taxes that ebay collects on your sales are counted toward the $600 in total sales which triggers the 1099?
No they are not. eBay's help page for the 1099-K states this clearly.
"Additionally, Form 1099-K does not include the sales tax when it is automatically collected and remitted by eBay"
I know shipping costs are counted as "sales" but what about state sales taxes?
The 1099-K does not report "sales". It reports payments processed on your behalf by the Managed Payments system.
Like a lot of people, I am ceasing all sales when I get close to $600 because it simply isn't worth the grief
of doing a detailed accounting to establish taxable income and potentially triggering an audit.
Even if you do not reach $600 and get a 1099-K, you are still required to report income on your tax form.
semi_midwestern
OP2 years agoWhat income??? 😃
buyselljack2016
·2 years agoincome & loss..................... whichever applies 😂
monroe67
·2 years ago"What income???"
The IRS expects all of us to report all of our income on our Forms 1040 and varieties of it.
Think about the Form 1040 itself. The majority of the first page is 15 to 20 lines of categories of income, so we can report all of it. Whatever money comes in to your pocket or bank account is income. The IRS wants to know all of it.
eBay is required to prepare 1099-K Forms at the low level of $600.00 because the government wants to "encourage" people to report and pay income on money they receive from selling stuff on eBay. You are not alone in thinking that's a very low threshold but the fact remains that it is currently The Law.
I will chime in to repeat the true answer for your original question, though.
The amount of money that eBay reports on the 1099-K Forms do NOT include sales taxes paid by eBay buyers.
That amount of money includes the price your buyer pays for their purchase, plus postage costs (except for listings with "free shipping"), and any handling charge the seller adds to the listing. THEN, the seller is able to deduct from his/her tax return the postage costs, the handling charges, and eBay's fees, whether they are the Final Value Fees or Promoted Listing fees or other "special" fees like reserve fees.
lacemaker3
·2 years ago@semi_midwestern
Sales tax is not included on your 1099-K. The 1099-K includes all payments that were processed for you, into your eBay Managed Payments account. So that includes purchase price, plus shipping/handling cost, but not the sales tax because it doesn't go into your Managed Payments account.
https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794
If you are not running a business selling on eBay, then you don't need to do complicated book keeping to report your 1099-K income. If the items were sold at a loss, it is just two lines to fill out. Tax software can handle this easily. Here are the instructions from the IRS for reporting 1099-K income for personal sales:
https://www.irs.gov/businesses/understanding-your-form-1099-k#do
semi_midwestern
OP2 years agoThanks for the reply, it was helpful.
Why ebay doesn't post something like this is anyone's guess. They don't even post your calendar year
sales so can see your 2023 sales total. I had to go through my emails to piece together what my calendar year sales are to date. What a mess.
buyselljack2016
·2 years ago@semi_midwestern
seller hub will show your sales for the year. it is a dropdown choice
Sellers hub>
Hover on performance>
Click on sales>
Click on last 31 days>
select time frame from the choices.
semi_midwestern
OP2 years agoI could only find the last six months of sales under "Account. "
I'll look in "seller hub" assuming I can find it, thanks.
Where is it? Not seeing a "seller hub".
The closest thing seems to be "all activity" under "Account / Payments".
And I even then I still have to manually tally up my calendar year sales.
I'm around $500 so I'm done for the year, I guess.
buyselljack2016
·2 years agothis may get you there
Overview - eBay Seller Hub
after you click on the desired time frame you will then need to scoot over to the right to hit "generate report"
There will total sales including sales tax, and also a breakdown of expenses on the page.
ETA if you then no longer want to use the "seller hub"(some don't like change) page there is an "opt out" up to the right.
monica-sells
·2 years agono need to be done...that's just silly...
(just re-read @lacemaker3 post)
anyways, here is the report you seek
(just set the date for year 2023)
https://www.ebay.com/sh/fin/reportslanding
buyselljack2016
·2 years agothanks for posting that. I forget about that page, and come April 15 it will have again escaped from my knowledge bank😂
semi_midwestern
OP2 years agoThanks, I never would have found that in a million years. It's very well hidden. Thanks, ebay!!!
I had to do a custom report for this calendar year's sales and then had to hit "apply" to the date range or
it keeps showing 2022 sales instead of 2023 sales. Not a great design.
bryo_3145
·2 years agoMeanwhile the rich, past presidents and corporations find a way around not to pay taxes at all.
semi_midwestern
OP2 years agoNot at all helpful.
lux.ra_14
·2 years agoPolitical commentary is verboten.
But you injected it into this thread and earned the rejoinder.
semi_midwestern
OP2 years agoI just stated a fact.