1099-K

[benn46]

Beginning in the year 2022, ebay will issue 1099-k forms to sellers who accumulate more than 600.00 worth of sales for the year 2022.  So here's my question:

If I list an item on ebay that sells for $1,000.00 and is paid for by the buyer on December 26, 2021, but is delivered and received in January of 2022 so that the funds from the sale are not deposited into my account until January of 2022, -- is that sale charged to my 2021 sales or to my 2022 sales?

No guesses, no matter how educated or reasonable.  I'm looking for the right answer.

Thanks in advance.

[mam98031]

jasmen@ebay 

Are you sure???  If it truly is, that is fantastic news because last year it was not.  Lots of sellers complained about that because Ebay went by the payout date.  I am very happy to hear that this has changed, but I just wanted to verify this.

[katzrul15]

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@mam98031 wrote:

jasmen@ebay 

Are you sure???  If it truly is, that is fantastic news because last year it was not.  Lots of sellers complained about that because Ebay went by the payout date.  I am very happy to hear that this has changed, but I just wanted to verify this.

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Same here - mine was by payout date as well.  That 12/31 transaction counted as 2021, not 2020 due to payout.

[mam98031]

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@katzrul15 wrote:

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@mam98031 wrote:

jasmen@ebay 

Are you sure???  If it truly is, that is fantastic news because last year it was not.  Lots of sellers complained about that because Ebay went by the payout date.  I am very happy to hear that this has changed, but I just wanted to verify this.

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Same here - mine was by payout date as well.  That 12/31 transaction counted as 2021, not 2020 due to payout.

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Thank you for chiming in as it appears many were not believing me.  It would be fantastic if jasmen@ebay is correct.  I know lots and lots of sellers were upset with Ebay when they were trying to reconcile their 1099Ks for 2020 and couldn't.  Come to find out they do their 1099K differently than any other site out there, which was the payout date.  That was against the IRS rules as well as it always should have been transaction date.

So fingers crossed that they did change it.  It would be best for us all.

[katzrul15]

Well, with many possibly counting the nickels to the $600 exit wave, it will be interesting.

You are not wrong - our CPA asked 4 times why it is was off.  He had to figure it out as it did not reconcile.

Very few of us did MP early, but we were one of them.  We thought that was why as they had not accounted for MP yet.  We switched Oct 2020.

Would like for it to be right. CPA charges by the hour!

[jasmen@ebay]

Hey guys! I went ahead and pushed back on this since mine from last year were showing different too. I'm glad I did, it's based off the payout date. If the funds have not been paid out, it won't be included in your 1099-k. They got back to me to clarify for sure, I advised we get something out there we can share so fingers crossed I can get that soon! I appreciate you guys always working with me @mam98031@katzrul15!

[mam98031]

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jasmen@ebay wrote:

Hey guys! I went ahead and pushed back on this since mine from last year were showing different too. I'm glad I did, it's based off the payout date. If the funds have not been paid out, it won't be included in your 1099-k. They got back to me to clarify for sure, I advised we get something out there we can share so fingers crossed I can get that soon! I appreciate you guys always working with me @mam98031@katzrul15!

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jasmen@ebay 

THANK YOU for getting this information for us as it is HUGELY important.  Now two more things you can do for use that would be helpful.

1.  The Policy page on 1099Ks should CLEARLY state this.  Last year it caused countless seller issues and even more money for some using CPAs to do their taxes.  And it should be noted that the reason a CPA has issues with figuring it out is because Ebay is WRONG.

2.  It should be STRONGLY shared with the powers to be at Ebay that this is NOT the correct way to do the 1099K.  Ebay is the ONLY site that does it this way and it is WRONG per the direction of IRS.  The money belongs to the SELLER at the time the buyer pays REGARDLESS of when the money moves into the seller's checking account.

If that were to be the guiding reason for when it applies to a 1099K, the PayPal would have never included it in their 1099K until the seller moved the money out and into their bank.  And for those that simply left it in PP and paid bills from there, it would never have ended up on a 1099K.  Of course that certainly doesn't make sense.

I sell on multiple sites and Ebay is the ONLY site that does this.  Not only does it create a hardship on sellers that are unaware of this FACT, as this thread clearly shows, it is simply WRONG.  Unless Ebay's position is the money in my MP account belongs to them [Ebay] until it is sent to our bank.  Again, that doesn't make any sense and of course is not true.

Regardless of how Ebay submits the 1099K to the IRS I will continue to report my income by Transaction date, the date the buyer paid me, as that is the appropriate way to do it.  But since Ebay issues the 1099K differently it makes more work for all of us and it simply isn't necessary.  I don't know why Ebay feels it is up to them to recreate the wheel sometimes.  They certainly aren't helping anyone.

[katzrul15]

@mam98031 

jasmen@ebay 

Thanks. 

As shared above, this caused a lot of issues last year.

And folks will be screaming they should not be over the $600, yadda yadda.....  lol

Glad to see this clarified as ours were definately tied to payout last year, not transaction date.

[mam98031]

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@katzrul15 wrote:

@mam98031 

jasmen@ebay 

Thanks. 

As shared above, this caused a lot of issues last year.

And folks will be screaming they should not be over the $600, yadda yadda.....  lol

Glad to see this clarified as ours were definately tied to payout last year, not transaction date.

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@katzrul15 

The $600 threshold does not happen until next year.  So for 1099Ks released in 2023 for the 2022 year.

[katzrul15]

Understood, but the $600 selling in a year threshold starts 1-1-22. 

People will be watching those totals closely, as inane as that is.

[mam98031]

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@katzrul15 wrote:

Understood, but the $600 selling in a year threshold starts 1-1-22. 

People will be watching those totals closely, as inane as that is.

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I'm one of those that sees no issue with it.  Those that currently aren't taxable because they are just selling stuff from around their house are still not taxable next year even though they may get a 1099K.  But those that should have been claiming their income on their Federal tax returns and haven't will certainly have a problem if they haven't been paying their taxes on all their income.

It is also why some sellers hated losing PP.  Not simply because they don't like MP, but they didn't like it that they couldn't keep their money out of the sightline of IRS.  But the new lower threshold would have affected them in PP too.

[katzrul15]

Agree 1000%.  I am all for the playing field to be leveled.  Should have been done years ago.

Do think Sellers who are concerned about it as many have posted they are outta here 12/31, will get tripped up on this, especially with weekly payouts.

[mam98031]

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@katzrul15 wrote:

Agree 1000%.  I am all for the playing field to be leveled.  Should have been done years ago.

Do think Sellers who are concerned about it as many have posted they are outta here 12/31, will get tripped up on this, especially with weekly payouts.

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Absolutely.

[babclassics]

Wow, I am finding that response from MP to be not believable.  Consider the following:

1 ) All "reports"  and downloads on the payments tab and in seller HUB for MP sellers including the tax report are based on date of TRANSACTION, not date of payment payout.

2) 1099-K have monthly gross sales as well as yearly total

3) Anybody trying to do accounting verification on monthly and yearly gross sales versus 1099-K will now have to make manual Schedule C additions of sales made in DEC 2020 but paid out in JAN2021 sales made. 

4) They will also have to do manual removals of items sold in DEC  2021 but not paid out until JAN 2022.

5) If eBay is going to create 1099-Ks based on exact date of payout, they need to change all their monthly reports to also include sales based on payout date and NOT date of transaction.

6) If this is all true, then we will need to look into filing AMENDED 2020 tax returns to remove over reported income for sales at the end of 2020 that paid out in 2021.  Are you kidding me! This may not be a problem unless you were already in MP in DEC 2020.  PayPal 1099-Ks from 2020 were correct using date of sale

This is just whacky - so so much more work and tinkering.  Please eBay  / MP needs to follow IRS Regulation for 1099-K as quoted by other posters in this thread.

[dbfolks166mt]

     A lot of this will depend on how you keep and manage your books. For example if you use an accrual accounting method, the only one approved under generally accepted accounting principles (GAAP), you recognize and report revenues when earned and expenses when incurred, regardless of the effect on cash. So in your example you would recognize the revenue as earned on 26 December regardless of when you receive the cash. The same would apply to anything you purchased on, lets say 28 December, but did not actually pay for on your CC statement until January. 

[katzrul15]

The posts above are about "who" in 2023, e-Bay will send a 1099k to.

Many Sellers have commented on these boards that 12/31 (or end of year or whatever), they are out of here, due to the ""new" 1099k constraints, that many wrongly have interpreted to be only when tax is owed or paid.   We all know, they should have been paying tax on their net earnings, if applicable, all along.

However, if the "last" payout they receive is a "weekly" payout and it is "paid" in 2022 and not when the transaction(s) occur in 2021, AND exceeds $600 - that Seller WILL get a 1099k in 2023 for their sales in 2022. 

A Seller could argue (not me, I pay my taxes and have since 2004), that they had "NO" sales in 2022, only 2021.

EXCEPT, on e-Bay, it tracks the "payout" and not the transaction as clarified UP thread.  And this is what happened last year also.  It was a pain, as it did not track the internal accounting that we had either.  We based it on the transactions as we had in the past.