K-1 income reporting

[mspanda1298hxb]

I noticed that the amount of sales has been lowered by 50% for 2025. Now only $2500 triggers K-1 to the IRS. So are we taxed on the amount of sales exceeding $2500 or ALL the sales? Thanks in advance to anyone who has knowlege

[comics-scifi-collectibles · Accepted solution]

@mspanda1298hxb   You still pay taxes on your PROFITS even if you didn't get a 1099k otherwise the IRS considers it tax evasion.  

The federal limit is $5k this year but some states have a lower threshold for when a 1099k is required to be issued. You can see states with different thresholds here>    https://support.waveapps.com/hc/en-us/articles/12277365763220-Form-1099-K-Federal-state-thresholds

If you were issued a 1099k you can print it from this page>

https://www.ebay.com/sh/fin/taxforms

I like the Financial Overview report for eBay expenses and download it as a PDF

https://www.ebay.com/sh/fin/reportslanding

I also deduct the cost of goods, shipping supplies I have receipts for, and mileage to the post office. Talk to your tax preparer for what are allowed to deduct as a business expense.

[mspanda1298hxb]

Your answer is incorrect. Per Ebay website the K-1 reporting thresholds are in the table below.

The threshold for 2025 is $2500. Some states differ, mine does not. So your 2026 returns for sales in the year 2025 will have a threshold of $2500.

It was $5000 for 2024 and unfortunately been decreased for 2025 by 50%!

[house*of*paws]

Hi @mspanda1298hxb 

The threshold for receiving a form from eBay may change … but our responsibility for reporting income to the IRS doesn’t.  

We're required to report ALL our income … but we pay tax only on our profits.

[comics-scifi-collectibles]

@mspanda1298hxb. When I said for this year I meant tax year 2024 as that is what people are filing income tax returns for now.       I missed that you are asking about 2025.  

The link I provided has more details too. 

Same rules apply if you get a 1099k or not you still pay taxes on your PROFITS.  

[mspanda1298hxb]

I read from other community comments that the number included on the 1099K is total sales. This is not what we netted. It should reflect "profits". Ebay should subtract fees so that we are not taxed on the actual amount of money received. Any suggestions?

[mspanda1298hxb]

On the 1099K,  Ebay reports total sales , not "profits". Fees should be subtracted in order to accurately reflect profits. As it stands now, we will have to pay on a dollar amount that not not reflect the net dollar amount actually received

[comics-scifi-collectibles]

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@mspanda1298hxb wrote:

On the 1099K,  Ebay reports total sales , not "profits". Fees should be subtracted in order to accurately reflect profits. As it stands now, we will have to pay on a dollar amount that not not reflect the net dollar amount actually received

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@mspanda1298hxb.  That's why in my first reply I gave a link to a report that will give you the ebay fees,  shipping,  and returns to subtract and you also need to subtract the other expenses I mentioned.

Even without a 1099k you report the gross and subtract all expenses on a schedule C.     

[comics-scifi-collectibles]

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@mspanda1298hxb wrote:

I read from other community comments that the number included on the 1099K is total sales. This is not what we netted. It should reflect "profits". Ebay should subtract fees so that we are not taxed on the actual amount of money received. Any suggestions?

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I recommend talking to a professional Tax preparer.  

Every business receives a 1099K with the GROSS amount when they meet the income threshold.  This is a Federal law, not an eBay rule. 

You are not understanding how income tax reporting works for a business.  Selling on eBay is a business.   So you start with your gross amount which is shown on the 1099k and other reports on eBay then you subtract the expenses on a Schedule C. 

Get the eBay expenses here>   https://www.ebay.com/sh/fin/reportslanding  ( download as a PDF)  It will have eBay fees, returns, and shipping that you paid for ON eBay.

I also deduct the cost of goods, shipping supplies I have receipts for, and mileage to the post office. Talk to your tax preparer for what you are allowed to deduct as a business expense.  

There is also a 1099k details report > 

https://www.ebay.com/sh/fin/taxdetails

AND a guide on filing taxes to help you here>  

https://www.ebay.com/mes/taxguide?sh=true

[gosimus]

@mspanda1298hxb 

< the 1099K ... should reflect "profits". Ebay should subtract fees >    

You seem not to be grasping the reality that eBay is required to follow the law, not what you – and, admittedly, some others – think they should do.  The law says gross sales, so that's what eBay reports.  It's up to you to subtract fees and other documented expenses. 

[house*of*paws]

Hi @mspanda1298hxb 

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@mspanda1298hxb wrote:

On the 1099K,  Ebay reports total sales , not "profits". Fees should be subtracted in order to accurately reflect profits. As it stands now, we will have to pay on a dollar amount that not not reflect the net dollar amount actually received

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@mspanda1298hxb 

Yes, eBay reports 'total sales', which is what it's supposed to do.  Only sellers know what their 'profit' is.  [It is what is left after making 'deductions'.]  Only sellers know what their deductions are.  eBay fees are only one of the possible deductions.