Default shipping
So will default shipping stop being added to our taxable sales as were not the one seling the shipping were only offering shipping through the ebay platform i dont think its right for us the seller to be taxed on money we dont get its more being put on us as a tax obligation
17 comments
rcolby
·2 years agoI don't think we are actually taxed on shipping (if we offer "free" and incorporate the cost, print the label, etc). Reason being is the amount of shipping for the label is reduced out of your NET profit (therefore your taxable income). If a CPA is reading this and I'm wrong please correct me but I think that is right.
holditwfo
OP2 years agoIm a small entity i dont offer free shipping buyer pays shipping i was juzt cleaning up around the house figured id sell a couple things tried to stay under irs threshold but nope the shipping put me over so i have to file now and i live in low income housing they raised my rent on used personal item i decided to turn into money that cost much more originally than what i got. Ebay 1099ed me i even had my food benefits lowered and soon after. Made me ineligable even though this isnt everybodys business now you get it if not just stop replying im done with this convo and done here on ebay as of aug17th due to them not accepting amex that broke the camels back for me leaves me no more room on ebay because all other payment methods create papertrails and my amex card cost $0.00 to load money no monthly fees and renewed my cards expiration for free since it dont collect interest my housing rent was unaffected but nope ebay couldnt agree with them on something so they have ran ebay into the ground so im daying goodbye they leave no option for me and the promoted listing **bleep** im just over it there stupid and just plain greedy they can have it been heading this way for awhile now time for change have a good day
mr_lincoln
·2 years agoHi @holditwfo
Download the IRS Schedule C, read the instructions and there are places on the form to add DEDUCTIONS for things like out of pocket paid shipping, fees you paid the venue, etc. So in the end you do NOT owe taxes on the shipping you paid for or the fees you paid eBay, they are DEDUCTED and reduce your taxable income.
buyselljack2016
·2 years agoI don't think that everyone can use Schedule C ðŸ˜
nobody*s_perfect
·2 years agoThere are restrictions on using Schedule C and taking expense deductions for hobby sellers or those who don't make a profit in at least 2 (or maybe it's 3) consecutive years. But the OP is apparently concerned about being taxed on their profits so that's a moot point in this particular example.
buyselljack2016
·2 years agoWhat is "default" shipping?
You do get the money that the buyer pays for shipping.
Where you chose to spend that "shipping money" is up to you.
You can buy the label through eBay, from another "online" label provider, at the Post Office, FedEx shipper or UPS.
If you properly deduct the expense when filing your taxes........... you won't be taxed on it.
worldcoinauctions
·2 years agoKeep track of what you buy to sell.
Keep track of what you get when you sold (money from ebay goes into a business account only used for ebay/internet sales, that makes it NET sales and easy to track)
Keep track of your other expenses (labels, envelopes, boxes supplies etc.)
If in doubt, talk to an accountant.
I never even download those sales reports, all that matters for my ebay net is the money I receive, ignore the 1099.
Don't mingle business and personal, take your personal money out of the business account and put it in your personal account, trying to live off your sales in real time will just f up your accounting!
Unavailable member
·2 years agoYou are not taxed on shipping you pay eBay a fee based on the entire amount your buyer has paid. After your buyer has paid, your selling fees are taken and you purchase the label what is left over (also called net profit) you claim on your income tax as income at tax time.
Your buyer pays tax on shipping depending on the state they live in.
holditwfo
OP2 years agoThe items i sold had the shipping added to my total sales amount on my 1099 irs has me obligatedwhen i sold just over 1000 dollars but i have a tax obligation of 1300 due to shipping i purchasrd all labels through ebay with buyers money now there doing this default shipping will this exclude the entire tax obligation caused by shipping
holditwfo
OP2 years agoAlso why do we have to pay a percentage on shipping to ebay as part of the total sale and i dont have a sales tax in montana just to clarify that my 1099 shows total shipping included as part of my tax liabiliry to the irs
fern*wood
·2 years agoBuyer paid shipping is part of the payment which all gets included on a 1099k. What you pay for your shipping labels is a deduction when filing your taxes.
monroe67
·2 years ago"Also why do we have to pay a percentage on shipping to ebay as part of the total sale and i dont have a sales tax in montana just to clarify that my 1099 shows total shipping included as part of my tax liabiliry to the irs"
Is punctuation illegal in Montana?
Just to clarify: NO, nobody's 1099 shows the total shipping included as part of their tax liability to the IRS.
The 1099-K form shows all the money processed by eBay for you as a specific seller.
That total shown on the 1099-K is NOT your federal income tax liability.
That total shown on the 1099-K is not even the amount to which your federal income tax percentage is applied.
In general:
That total amount shown on the 1099-K is what you're supposed to list on the Income section on the front page of the 1040 federal tax return form.
THEN you may be eligible to itemize deductions.
For your eBay sales, the shipping costs that you paid as an eBay seller are deductible.
Other deductible costs include the fees you paid to eBay, the prices you paid for purchasing shipping boxes, bubble wrap, packages of blank mailing labels, shipping tape, even mileage for the distances you drove to and from a store to purchase those supplies and mileage you drove to and from your post office to drop the packages off.
Again, very oversimplified: What is left after you subtract all those deductions from the total on the 1099-K is your taxable income from your eBay sales. That amount is added to all the rest of your taxable income (like from your regular day job, all your dividend income on your huge stock holdings, etc.) and then you look at the IRS's tax tables to determine your tax liability.
The total on the 1099-K is not your tax liability.
Your tax liability is the amount you owe to the IRS.
Depending on the rest of your own financial situation (such as that day job and all those stock dividends), you might owe income tax to the IRS on a very low portion of your total eBay sales shown on the 1099-K or even none of your total eBay sales.
holditwfo
OP2 years agoYes punching is illegal in montana. I dont need to be taught about a simple point i was trying to make. What!! You couldn't figure it out? Or you just couldn't control your need mouth your opinion on how i write. So im now mouthing the need to tell you leading off with that comment seems. just unessessary and did nothing for my reason why i entered into this coversation in the first place, boss. And your wrong about my issue. It mainly since im just a small seller with a couple items i had around the house, i was trying to stay under the threshold of needing a 1099. But the shipping is what sent me above the threshold when my items i sold were much less. Everything else you said i already knew. So you wasted your time. You have a wonderful day. There punctuation. Who cares!!!!!!!
monroe67
·2 years ago"Yes punching is illegal in montana. I dont need to be taught about a simple point i was trying to make. What!! You couldn't figure it out? . . . . Everything else you said i already knew. So you wasted your time. You have a wonderful day. There punctuation. Who cares!!!!!!!"
I took a look again at your original post from three months ago, and was reminded that, no, I could not figure out what point you were trying to make.
I still can't figure out what your question or your problem is.
Now you tell everybody in this thread that you already knew everything I said in my reply to your post. With a few personal attacks.
I'll just cry myself to sleep.
nobody*s_perfect
·2 years agoTheir second post helped: They were upset about buyers' payments for S&H being included on their 1099-K total because they thought that meant they had to pay income tax on it.
holditwfo
OP2 years agoNo no no, my point was, because i was trying to avoid a 1099 all together my sales were under the threshhold but shipping put me over the threshold so now i have to file thats as simple as i can put it. On stuff that was laying around the house that cost me more than i sold them for originally. Just plain frustrating.
rcolby
·2 years agounless shipping is offered by the seller as "free" then there is no taxable shipping charge for the buyer. This is the struggle as a seller to offer "free" shipping and incorporate into a higher cost for the item, OR, offer charged shipping and be able to offer a lower price for the buyer.