eBay

rosemarys_billygoat · ‎01-21-2019

I helped a friend sell off a lot of stuff last year, apparently just enough to put me in 1099-K territory. Just curious exactly how I find the actual number I report when I file, since the amount on the form PayPal sent me does not subtract fees and shipping expenses. I can find my actual sales totals via my Seller Dashboard (and I assume that is just the flat amount my items sold for and therefore that number does not include the shipping expenses), but is there any quick way to find how much I was charged for Ebay fees? Or is that something I need to do manually?

Also, are the the monthly totals on my Seller dashboard considered sufficient receipt/proof of my actual sales total compared to the $ amount received by PayPal?

orangehound · ‎01-21-2019

You will most likely need to fill out a Schedule C.

The 1099-K reports your gross sales volume. When your taxes are filled out, you have two major activities to complete:

You have to report/determine the (a) dollar value (wholesale cost) of your inventory on 1/1/2018 and (b) the dollar value (wholesale cost) of your inventory on 12/31/2018. Item (b) is determined by adding the wholesale cost of inventory you acquired during the year to item (a), and then subtracting out the wholesale cost of inventory sold or disposed of (trashed, lost, donated, etc.) ... a lot of people use accounting software to help with this. The purpose of this step is to determine the cost basis of the items that you sold so that this can be deducted from the amount on your 1099-K (you deduct the acquisition costs of an item in the year in which it is sold, and not in the year it was acquired). This is the biggest job in my opinion.
You have to determine the cost of running your business, which would also be subtractions from the amount of the 1099-K. This includes things like postage, packaging materials, eBay fees (found on statements), PayPal fees (found on PayPal statements), mileage, taxes, business license fees, accounting and banking fees, etc.

Doing taxes for a business is a very complex job, and though you might be able to navigate this with something like TurboTax, you might find it easier to just use an accountant.

@rosemarys_billygoat wrote:
Also, are the the monthly totals on my Seller dashboard considered sufficient receipt/proof of my actual sales total compared to the $ amount received by PayPal?

We get all our numbers from PayPal. The only number we use from eBay is the monthly fees (minus FedEx postage costs) as reported on the monthly statements.

*smedley* · ‎01-21-2019

Doing taxes for a business is a very complex job, and though you might be able to navigate this with something like TurboTax, you might find it easier to just use an accountant.

a few years ago i was industrious and got my taxes done really early... unfortunately, the next day i received my 1099... first time i'd gone over the numbers for it, so i was totally unprepared...

i knew i had to file a 1040-x, so i went to one of the major tax preparers because i didn't want to get nailed by the IRS for doing something wrong... they were extremely helpful, but boy did they get a LOT of money per hour for their time...

as it turned out, i had a net loss so i actually got more money back, but it cost me about 7/9ths of it to get the other 2/9ths back...

nobody*s_perfect · ‎01-21-2019

@rosemarys_billygoat wrote:
... are the the monthly totals on my Seller dashboard considered sufficient receipt/proof of my actual sales total compared to the $ amount received by PayPal?

No, they are not. The total payments you received in PayPal is what the IRS will look at. You have to report that as your total receipts. Then you deduct expenses such as fees and postage.

In your PayPal account, go to your "Financial Summary Report" and you can choose 2018 from the drop-down menu for the report interval.

https://business.paypal.com/merchantdata/reportHome

This will generate a summary of your PayPal activity for the year, including a line item for all payments received, for Fees (i.e., PayPal fees), and another line for all refunds sent. eBay fees paid and USPS postage purchased can be derived from transaction reports, though they no longer provide totals.

IMHO the easiest way to get your eBay fees total is to check your monthly invoices.

jscar59 · ‎01-23-2019

Pay Pal just released the 1099-K for 2018 on 1/20/2019. Look for the bell icon on the top right.

nobody*s_perfect · ‎01-24-2019

@jscar59 wrote:
Pay Pal just released the 1099-K for 2018 on 1/20/2019. Look for the bell icon on the top right.

Yes, that's probably why the OP was here the next day asking about how to reconcile it with his expenses. "... enough to put me in 1099-K territory. Just curious exactly how I find the actual number I report when I file, since the amount on the form PayPal sent me does not subtract fees and shipping expenses..."

watsonunlocker · ‎01-28-2019

Hello,

My case is different cause I'm selling special services, and this is my first time dealing with the 1099-K form from paypal, I see the gross amount of payment on the form is almost $25,000, number of payment transactions is 450 sales but I don't make all that because I had to refund a lot of customers cause at first T-Mobile server went down after that AT&T server went down for months, plus I use money to buy the codes online from other suppliers and my friends be sending money to me using paypal "friends and family" my questions is where can I find all the refund I've sent to my customers for the whole year 2018 to remove them when filling taxes cause I don't remember most of them? plus what else should I refund from the gross amount. I was trying to use free turbo tax but I don't see no where to put the 1099-k.

Let me give you 1 quick example on how I do it.

For example:
I sold an unlock code on ebay for $159.99
EBay fees came up to $16
PayPal fees came up to $4.94
I bought it from my supplier for $133
And I spent $2.66 on MassPaypal to send it to my supplier account.
So my profit came up to $3.05

Can you please help me out cause I want to know if I owe a lot taxes.

parkersparrow · ‎01-28-2019

I just started using an online bookkeeping program last month that pulls the info from paypal & eBay that I need to file my schedule C. Hopefully it will make it easier this year. I've been doing it myself for the last few years but the first year I had to do it I totally screwed it up.

parkersparrow · ‎01-28-2019

@watsonunlocker I believe It depends on where you live the threshold for profit you would have to pay taxes. Not knowing any of you other sales info, but if they are all similar to your example most likely you did not make much of a profit. Turbo tax does has a 1099 option but they charge for it. There are other free tax websites out there like free tax usa that cost less and include that 1099/schedule C Option. You can find all your refund info in you paypal account activity & under statements. I would advise you go see a tax professional for help.

nobody*s_perfect · ‎01-29-2019

Look up IRS Schedule C and its instructions to help you understand what is deductible expense. You can deduct the refunds, fees, and purchase costs when you report the income. Go to your "Financial Summary Report" in PayPal and you can choose 2018 from the drop-down menu for the report interval.

https://business.paypal.com/merchantdata/reportHome

This will generate a summary of your PayPal activity for the year, including a line item for all payments received, for Fees (i.e., PayPal fees), and another line for all refunds sent. eBay fees paid and USPS postage purchased can be derived from transaction reports, though they no longer provide totals.

IIRC, the free basic version of TurboTax doesn't include Schedule C. You will probably find it worthwhile to invest in an appropriate level of TurboTax; they are very good at walking you through the process.

IMHO the easiest way to get your eBay fees total is to check your monthly invoices.

lacemaker3 · ‎01-29-2019

@parkersparrow wrote:
@watsonunlocker I believe It depends on where you live the threshold for profit you would have to pay taxes. ...

Sorry, but no, this is not correct.

All profit has to be reported to the IRS as income. No matter how low it is.

It is better to keep records, run as a business, and fill out Schedule C. because then you can deduct all your expenses, even if that puts you into a net loss. This can help many eBay sellers because it can offset income from other sources and reduce the total amount you have to pay tax on. As one of the posters mentioned earlier.

It is quite easy to do a Schedule C with TurboTax. You can get the "Home & Business" version at Costco (for example) for under $70 at the moment, and this is a business expense which is deductible. Or, you can go to a tax specialist.

If you don't report as a business, then you can only deduct your expenses up to the amount of your income, and no more. IIRC, that is done in a few lines on the first page of the 1040.

parkersparrow · ‎01-29-2019

@lacemaker3 I know all income has to be reported that's not what I meant. The poster I was replying to sounds like they didn't make much of a profit if any by the example they gave. As I said I know turbo tax has the option for Schedule C but to someone who hasn't made much of a profit or is at a loss $70 could be a lot of money. That is why I mentioned Free Tax USA that's what I use, you can do the Schedule C along with your 1040 for under $20.

lacemaker3 · ‎01-29-2019

@parkersparrow , OK, sorry for the misunderstanding. But, you shouldn't say there is a threshold for reporting income to the IRS. Some people really do think that is the case, but it isn't true.

I tried to help someone once, here in the forum, who was being charged an excessive amount of tax due by the IRS because she hadn't filed returns, and hadn't kept records on her expenses. So they charged her on the income only, without deducting her costs, and she didn't have records of the costs to make a corrected return. She was in a disastrous mess, and probably ended up bankrupt due to the tax lien. She was from a very disadvantaged area in a big city, and genuinely didn't understand that she had to pay income tax on what she earned. She thought "they" were responsible for telling her (anybody, really).

lacemaker3 · ‎01-29-2019

@parkersparrow

Which version of TaxAct do you recommend? As far as I can see, they have a special product for self-employed (which includes the Schedule C) but it costs about $50.

The versions shown in the first screen shot don't seem to include the Schedule C.

parkersparrow · ‎01-29-2019

@lacemaker3 I never said anything about not reporting. I said over a certain amount you don't have to pay taxes. I looked it up and from what I can understand it's $400. I also did not recommend Tax Act. I recommended Free Tax USA. I also would advise if it's someones first time with a 1099k to talk with someone with experience like I mentioned the first time I had to do it myself I had no clue what I was doing. Keeping detailed records is good advice for the future but many first time sellers or people not familiar with the self employment tax laws are often surprised when they get that 1099 from paypal.