Quick Tax question.....

[wardrobeshop]

I am trying to confirm just what and when eBay reports to the IRS via the 1099-K. I believe that for his year (2025) it is $2500.00 and next year (2026) it drops to $600.

Can you tell me based on this scenario what would be reported?

So in this example It would calculated off of the Net Sales, or Net Sales plus Selling costs?

Total Sales(includes taxes)

$246.92

Less

Taxes and Fees

Collected by Seller

$0.00

Collected by eBay

$19.13

Less

Selling costs (including shipping)

$91.06

___________________________________

Net sales (net of taxes and selling costs)

$136.73

I am just looking for the easiest way to calculate it.  Thanks so much for your answers.

[lady_madonna]

@wardrobeshop 

The 1099K shows the total gross amount of sales, including taxes, shipping, etc.

[monroe67]

"The 1099K shows the total gross amount of sales, including taxes, shipping, etc."
Not quite correct . . . . . . .

Here's what eBay says, with some highlighting:

[Start of Quote]

What's included in Form 1099-K

Form 1099-K is an IRS information return that includes the gross amount of all reportable payments within a calendar year. This is based on when gross funds are processed to eBay, not necessarily when funds are received by sellers. This amount does not include any adjustments, for example, credits, discounts, fees, refunds, or any other adjustable amounts.
                       However, sales tax and canceled transactions are excluded from the gross amount reported.
You should check with your tax advisor to decide how best to use the information on your Form 1099-K when filing your personal and/or business income tax return.

[End of Quote]

Shipping paid by the buyer is included on Form 1099-K.
All eBay fees are included on Form 1099-K.
Shipping and eBay fees are allowable deductions when the seller is preparing his/her income tax returns.  

[wardrobeshop]

Thanks for the response. So i am trying to create a Excel spread sheet and am not sure which columns should be included to reflect those that are included in the calculation of reported 1099-K totals.

I know shipping paid by seller, buyer,

ebay fees; listing, percentage of sale?

[monroe67]

First, there are a lot of Mentors who are more knowledgeable than me about the things you are asking.  You might want to ask again with a different title for your post, closer to what you're asking about keeping track of the different types of eBay fees.  You might also want to post your question on eBay's Selling Community forum.  

You mention a listing fee:  "I know shipping paid by seller, buyer, ebay fees; listing, percentage of sale?"

It looks like you do not have an eBay store.  Thus, eBay allows you to list 250 items per month with no listing fee, which eBay actually calls the Insertion Fee.  For most categories, if  it is charged, it is 35 cents per listing.  

I suggest you take a look at eBay's User Agreement, item 6, Fees and Taxes.  You can find a link to the User Agreement in the fine print at the very bottom of each page when you access eBay on a desktop or laptop computer.  Click on all the hyperlinks.  It will tell you just about everything you need to know about eBay's fees.

Monthly reports:  On the first or sometimes second day of each calendar month, eBay makes certain reports available to sellers.  You can open them through your eBay Selling Hub.  One of those reports is the Financial Statement.  Essentially, it shows all the money going in and out of your eBay account during the month.  You can retrieve either a summary, on one page, or the full statement with details on each transaction.  (I usually open and save both.)  

For each specific transaction, the Financial Statement will show the Order Total, as paid by your buyer, and eBay fees.  Those fees are shown as one dollar amount, not broken down by Percentage and/or Per-Order Fixed Fee and/or International Fee.  (My selling ID does not promote her listings, so I don't know for sure whether those fees are broken out or not.) 

On a separate page of the Financial Statement, you will see the dollar amount(s) that you spent on shipping costs that you buy on eBay.  The final page will show the dollar amounts eBay paid out to you (sent to your checking account) and the dates of each payment.

Another monthly report you may find helpful is the Tax Invoice report.  It is in Excel format and does break down the fees for each sale.  The Tax Invoice shows the Final Value Fees (FVFs) in their two parts, the percentage and the per-order fee, on two separate lines.  The "percentage fee" line says: "Applies to total amount of sale".  It doesn't show the percentage (13.6% in most cases), but does show the dollar amount.  The "per-order fee" line actually says: "Per order fixed fee," and will be either 30 cents or 40 cents.