02-01-2023 01:13 PM - edited 02-08-2023 01:00 PM
Come chat with the TaxAct team to discuss how the IRS’ recent 1099-K Decision Impacts eBay Sellers this Tax Season. Get all of your questions ready for the team, so we can make the most out of this month's chat on February 8th at 1:00 pm PT!
Thanks for joining us for the Monthly Chat with eBay Staff and the TaxAct Team.
The chat thread will remain open until 2 PM PT at which point we'll close it from additional responses. After that time, we'll continue to work on responding to any queries that might still be unanswered.
To post your question, click Reply in the lower right corner of this post, type your question, and hit submit between 1-2 PM Pacific Time. The format of our chat mirrors the format of our Community Discussion Boards, where each post will appear in the thread chronologically. The taxAct and Community Team will review each question as it comes in, and will quote the original question in our reply. This quote and the reply will appear later in the thread, so just keep scrolling down to see our answers.
As a reminder, we want TaxAct to be able to get to as many members as possible during the allotted hour, so we have a few things to ask of you:
Missed the chat? Send your questions to the podcast by calling 888-723-4630 or email us at podcast@ebay.com and maybe your questions will make it on the air! Or listen to past episodes while you wait for next month!”
02-08-2023 01:01 PM
Good Afternoon! My name is Mark Jaeger and I am the VP of Tax Operations at TaxAct. My team implements all the tax code changes for TaxAct across our Federal and State products. We work closely with the IRS and State government agencies to ensure our products are accurate and compliant each tax season to provide our customers their maximum refund. I am excited to be here today to talk about the 1099-K with you all.
02-08-2023 01:04 PM - last edited on 02-08-2023 01:15 PM by elizabeth@ebay
Hi. For a hobbyist seller, not a business, I understand I need to record each transaction on form 8949, with the adjustment code being E and ebay's fee as the adjustment amount. (And adding my shpping cost to cost of goods sold.) Correct? If an item is sold at a loss, do I also include in the adjustment amount the size of the loss, so that it won't be counted and column h will be 0?
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Edit: A reply to your question can be found here.
02-08-2023 01:05 PM
I received three 1099-K forms from eBay. Two contained TIN numbers and one SSN. Two were sent to a street address and one to a PO Box. Why address differences? It seems like eBay "account validation" responds in a Catch-22 manner. The automated process will not accept the address used to file taxes. Any address that eBay will accept fails when matched with IRS data. This continues until after about ten phone calls, someone who understands how to manually complete the verification answers the phone. Finally, the BOT that "matches" photo ID pictures requires high-resolution scans better than any smart phone could provide.
Downloaded eBay Managed Payments reports are difficult to process. Unlike PayPal, the reports do not include balances. This would be difficult because sales and orders data with different granularity are bundled into one report. Foreign currency amounts are not recast as dollar amounts. PayPal downloaded reports include balances and money columns that can be totaled. Foreign currency amounts are zeroed out with a reversing transaction and recast in dollars. Managed Payments reports are difficult to process in Excel, requiring manual column formatting and complex calculations to break down amounts by category. Importing into a relational database like SQL Server is easy once extraneous lines in front of the data are removed. How many eBay have Excel or database skills required to process downloaded Managed Payments reports?
The other problem is that eBay does not report total sales anywhere except on the 1099-K. Total sales and fees are missing from Managed Payments Payout reports. Was the 2021 1099-K slightly low because eBay failed to convert sale amounts reported in Euros or Pounds into US dollars?
The 1099-K issue is a tempest in a teapot for most larger sellers because they are most likely to have received enough cash or checks to cover any discrepancies introduced by eBay 1099-K forms. Finally, which does eBay report? Sales as in sales reports or payouts committed within the calendar-year? I was able to confirm 2020 1099-K forms were correct. It has been downhill since then. By the way, did I mention that eBay sale amounts in multi-item orders appear to be off by a penny or so? I guess no one at eBay understands the difference between floating point and decimal data types or how to correctly calculate apportioned amounts to the nearest penny. The downloadable eBay Payments report contains a mixture of orders and sales data. Unlike PayPal columns cannot be summed and eBay does not report Managed Payments account balances.
Not that it matters, but I found out that QuickBooks Online could capture eBay payments transactions data but not monthly payments, listing fees, and other data not easily associated with an order. At this rate, it could take more than a year to process a year's worth of eBay data.
02-08-2023 01:06 PM - last edited on 02-08-2023 01:16 PM by elizabeth@ebay
Hi Mark, I'm not sure if this is under your purview, but many eBay sellers who are LLCs or Sole Proprietors are getting 1099-K reports under their SSN instead of under the EIN that they provided eBay. Is there any tax consequence to this? We are advising these sellers to request a revision from the SSN to the proffered EIN. Is that necessary?
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Edit: A reply to your question can be found here.
02-08-2023 01:08 PM
HI,
I have Questions in the Seller Hub about Payments – Reports -- Financial overview:
Are “Gross Refunds” considered an expense?
And, I don’t understand “Net Transfers”. Please explain what they are.
Thanks so much!
02-08-2023 01:09 PM
Are we live? Not seeing any questions -- want to make sure I'm in the right place.
02-08-2023 01:10 PM
@packrat2k wrote:
Are we live? Not seeing any questions -- want to make sure I'm in the right place.
Hey @packrat2k! We are live and the TaxAct team is starting to get responses to the questions now!
02-08-2023 01:10 PM
This is a question for ebay. I am rarely able to make the monthly group chat, and when I am able, I don't have a reason or issue to interact with the designated subject.
Can you please add an additional group chat every other month for Misc. issues? Maybe at a different day/time of the week? This is a really restrictive format. Maybe a Thursday at 3-4pm?
I have an issue with customer service experiences I've had with chat, phone and facebook messaging, but the one day I'm able to make it here on time, it's tax day.
I would appreciate some flexibility, even with the recently announced lay-offs.
02-08-2023 01:11 PM
Please ignore my last post about not seeing questions -- am seeing them now.
02-08-2023 01:11 PM
Some questions aren't TaxAct related but Ebay report questions. Is TaxAct going to respond to the Ebay report questions too?
02-08-2023 01:12 PM
@grepdogg wrote:
This is a question for ebay. I am rarely able to make the monthly group chat, and when I am able, I don't have a reason or issue to interact with the designated subject.
Can you please add an additional group chat every other month for Misc. issues? Maybe at a different day/time of the week? This is a really restrictive format. Maybe a Thursday at 3-4pm?
I have an issue with customer service experiences I've had with chat, phone and facebook messaging, but the one day I'm able to make it here on time, it's tax day.
I would appreciate some flexibility, even with the recently announced lay-offs.
Hey @grepdogg! This is something that we can look into and thank you for the feedback!
02-08-2023 01:13 PM
@mam98031 wrote:
Some questions aren't TaxAct related but Ebay report questions. Is TaxAct going to respond to the Ebay report questions too?
Hey @mam98031! Any eBay related questions will be handled by either myself elizabeth@ebay or kyle@ebay.
02-08-2023 01:13 PM
@packrat2k wrote:Hi. For a hobbyist seller, not a business, I understand I need to record each transaction on form 8949, with the adjustment code being E and ebay's fee as the adjustment amount. (And adding my shpping cost to cost of goods sold.) Correct? If an item is sold at a loss, do I also include in the adjustment amount the size of the loss, so that it won't be counted and column h will be 0?
Hi @packrat2k - depending on what you are selling, the transaction could be reported on Form 8949 or Schedule 1 as hobbyist income. If the amount should be reported on Form 8949, the shipping cost fee would be added with a Code E adjustment that will increase your overall cost basis. The amount of capital loss from all capital assets can be deducted up to $1,500 ($3,000 if married filing jointly).
02-08-2023 01:13 PM - last edited on 02-08-2023 01:28 PM by elizabeth@ebay