1099-K for 2024 Sales

[moviecollector57]

It looks likely that the IRS has settled on raising the $600 limit, on Ebay Sales, to $5000 before Ebay sends a 1099-K next year.  Will the 1099-K issued be based on Gross Sales or Net Sales?  Gross sales has Ebay's fees, shipping costs to customers, and taxes included.  Net has only the amount of money the seller actually receives.  Very important to know.

[kensgiftshop]

It's the gross, you deduct fees and expenses when you file.

[luckythewinner]

Will the 1099-K issued be based on Gross Sales or Net Sales? Very important to know.

eBay has a very informative online help page about the 1099-K form: 

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

It has a section called "What's included in Form 1099-K":

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794#section3

Here is what it says:

"As Form 1099-K is an IRS information return, it includes the gross amount of all reportable payments within a calendar year, based on when funds settle 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. Additionally, Form 1099-K does not include the sales tax when it is automatically collected and remitted by eBay."

[caldreamer]

Just so you know IRS requires you to report all income (even if you don't get 1099).    1099 is based on "gross sales" (purchase price + shipping income).   

EBAY has "easy to read" 1-page report that shows YTD totals for "orders/gross sales, EBAY fees, refunds, shipping expense).   Go to Payments, Reports, REPORTS (NEW) and select LAST YEAR.  

$20,000 GROSS SALES (as shown on EBAY report)

     -1,000 EBAY FEES (as shown on EBAY report)

     - 500 REFUNDS (as shown on EBAY report)

     -700 SHIPPING EXPENSE (as shown on EBAY report)

     -2,000 OTHER EXPENSES (cost of goods sold, packing materials, mileage, office supplies)

 $5,800 NET TAXABLE INCOME

You must file taxes as a "business" if you want to deduct "business expenses" (cost of goods, refunded merchandise, shipping expense (postage), office supplies, packing materials, mileage, etc).  Anything used for your business is tax deductible.   If have dedicated area in your home for storing merchandise...you can also take "home office" deduction % of your rent/utilities.

I strongly urge you to consult with a CPA if you have never done business taxes before.