1099-K Detailed Report Doesn't Match 1099-K

[lakeland_music]

My 1099-K detailed report ($7193) almost matches my personal sales records perfectly, but my 1099-K simplified is around $800 more ($8026.32).     I don't know what to make of this, I've gone through my transactions line by line, the 1099-K is the one that is wrong.  eBay support is claiming they are not responsible for correcting the 1099-K, despite the IRS website stating that if the 1099-K contains incorrect information, to contact the issuer, by finding the name and address on the letterhead of the 1099-K form.  Now I know this, and the name on the letterhead is EBAY COMMERCE, INC.    What the hell is going on here?  They took responsibility for processing transactions, and they are leaving their sellers abandoned when there are issues?

[caldreamer]

Don't know where you are getting your "personal sales records" but IRS goes by what is on the 1099.   EBAY has "read to easy" 1-page report that shows YTD totals for (orders, refunds, EBAY fees, shipping expense).  Go to Payments, Reports (select LAST YEAR).  This will be very helpful during tax time.

1099 includes all "gross income" (purchase price + shipping income) plus transactions that were "refunded or cancelled".    IRS requires that you report "gross income" and then deduct all your expenses.

GROSS INCOME (as shown on 1099)

-Returns/Cancellation

-EBAY fees

-Shipping expense

-Other expense (cost of goods, mileage, packing supplies, etc)

NET TAXABLE INCOME

[lakeland_music]

My personal records are an itemized list of every sale, with every possible metric, starting from gross sale amount, through fees, sales tax collected, shipping costs, cost of goods, net amounts, net profit, etc.   Are you saying they don't subtract transaction fees in the 1099-K report?

[dnasilver]

Did any of your buyers get a credit? Odds are it is a credit. eBay shows incoming transactions to you to determine the gross for the 1099K form per IRS rules. A credit to a buyer would be outgoing not captured on the actual 1099K. 

[lakeland_music]

One credit, for $107.  Doesn't cover the discrepancy.

[albertabrightalberta]

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@lakeland_music wrote:

  Are you saying they don't subtract transaction fees in the 1099-K report?

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No, ebay's fees aren't deducted on the 1099K. You have to deduct them on your taxes along with shipping and any other expenses and costs you incurred.

The 1099K amount is the total buyers paid (not included sales taxes).

[valueaddedresource]

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@lakeland_music wrote:

My personal records are an itemized list of every sale, with every possible metric, starting from gross sale amount, through fees, sales tax collected, shipping costs, cost of goods, net amounts, net profit, etc.   Are you saying they don't subtract transaction fees in the 1099-K report?

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@lakeland_music  I'd be willing to bet sales tax is where your discrepancy is.

Sales tax collected and remitted by eBay as a marketplace facilitator is not included in the 1099-K because it is not paid to the seller.

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794 

While there is a column in the 1099-K detail report for eBay collected tax, if you look at the numbers in the Gross Amount column, that eBay collected tax is not included.

[mam98031]

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@lakeland_music wrote:

My personal records are an itemized list of every sale, with every possible metric, starting from gross sale amount, through fees, sales tax collected, shipping costs, cost of goods, net amounts, net profit, etc.   Are you saying they don't subtract transaction fees in the 1099-K report?

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Look closely at your 1099K.  It is showing you your Gross Receipts.  That is the total amount of money that came into your account BEFORE any Ebay fees, shipping costs if purchased in Ebay or any refunds to your buyers was taken.  You have to reconcile the number.  The amount on your 1099K is overstated and you don't use that number as your Gross Sales.

[luckythewinner]

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@lakeland_music wrote:

 Are you saying they don't subtract transaction fees in the 1099-K report?

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The 1099-K is a report of gross payments processed, not "sales".

It does not subtract transaction fees. 

It does not subtract refunds, so if you collect $100 and refund $100, your 1099-K still reports $100.  

It also uses the date the payment settled to eBay, not the date of the sale or the date of the payout to you. So if you sold something on Dec 31, 2023 and the payment settled Jan 1, 2024 then that will appear on your 2024 1099-K instead of the 2023 one. 

All that aside ... 

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@lakeland_music wrote:

My 1099-K detailed report ($7193) almost matches my personal sales records perfectly, but my 1099-K simplified is around $800 more ($8026.32).

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Have you downloaded the actual 1099-K form from eBay? If so, what does your actual 1099-K form say? That is what goes to the IRS. 

[fr.lot2012]

its ridiculous, many sell books, magazines and other insignificant crap and now are getting 1099s and the prospect of spending much of what was made for an accountant.