1099 does this include all the fees and shipping or is it my net?

[alliern]

I am fairly new and already filed my taxes but I was reading somewhere that you have to deduct ebay fees and shipping from the 1099, is that correct, if so I really messed up...Thank you for your help!! Alice

[simply-the-best-for-you]

Yes, you have to deducts your expenses.  That's what Schedule C is all about.   The 1099 is your gross, not your net.   That said, I don't think the IRS will care all that much, b/c you'll have paid more tax than you need to.   Did you file your Schedule C?  

[caldreamer]

You can file an amended tax return if you neglected to deduct your selling expenses.

IRS requires that you report "gross income" as shown on 1099.  EBAY has an "easy to read" 1-page report that shows YTD totals for (orders, refunds, EBAY fees, shipping expense).  Go to PAYMENTS, REPORTS (select LAST YEAR).   When you file your taxes as a "business" you can deduct "business expenses" shown below.

GROSS INCOME (as shown on 1099)

-Refunds

-EBAY fees

-Shipping expense

-Other expenses (cost of goods, mileage, packing supplies, office supplies)

NET TAXABLE INCOME

[mam98031]

https://sellerledger.com/ebay-1099k-guide/

https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-10...

https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

https://www.irs.gov/businesses/gig-economy-tax-center

https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html

https://www.irs.gov/pub/taxpros/fs-2022-41.pdf

https://www.kiplinger.com/taxes/irs-free-file

[rckr43]

WOW, information overload. LOL

Thanks.

Seems what it boils down to is the need to keep track of packaging materials, supplies, shipping costs, even the computer and printer used, etc.... Because: Filling taxes is about profit, while realizing that sales tax is included with all sales..... making 'overpaying' easy.

[mam98031]

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@rckr43 wrote:

WOW, information overload. LOL

Thanks.

Seems what it boils down to is the need to keep track of packaging materials, supplies, shipping costs, even the computer and printer used, etc.... Because: Filling taxes is about profit, while realizing that sales tax is included with all sales..... making 'overpaying' easy.

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Your welcome.

YES, you need to track ALL your expenses.  Keep a file with ALL the receipts.

Sales tax is paid by the Buyer NOT EVER the seller.

Ebay has great reports that help you with numbers from the site, but keep in mind you still have all those other costs you need to track so you can deduct them.

https://www.ebay.com/sh/fin/summary

[wastingtime101]

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@alliern wrote:

I am fairly new and already filed my taxes but I was reading somewhere that you have to deduct ebay fees and shipping from the 1099, is that correct, if so I really messed up...Thank you for your help!! Alice

---

Hi @alliern - welcome. As another poster said, you can file an amended return if you need to.

I suggest starting with these handy reports eBay offers to make the process easier for sellers:

https://www.ebay.com/mes/taxguide?sh=true

[nobody*s_perfect]

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@rckr43 wrote: ... Filling taxes is about profit, while realizing that sales tax is included with all sales..... making 'overpaying' easy.

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The 1099-K includes the total of buyers' payments for the item and for shipping/handling, but it does NOT include the amount that buyers paid for sales tax.

[mam98031]

@rckr43  

To help support what @nobody*s_perfect posted, here is what the policy says.

What's included in Form 1099-K

Form 1099-K is an IRS information return that includes the gross amount of all reportable payments within a calendar year. This is based on when gross funds are processed 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. However, sales tax and canceled transactions are excluded from the gross amount reported. You should check with your tax advisor to decide how best to use the information on your Form 1099-K when filing your personal and/or business income tax return.

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

The only thing I'd add, is regarding cancellations.  We have two kinds.  One with refund and one without.  So cancellations that do not have a refund don't affect the 1099K numbers in any way.  But those that have a refund, you will need to subtract the refund from the 1099K amount.  Keep in mind the amount reported on the 1099K is the total of your incoming money into your MP account, before any kind of deduction for any reason.

[monroe67]

As "caldreamer" stated above, you may file an Amended Tax Return.  I would certainly do that IF I were going to get any additional money refunded to me from the IRS.   Use IRS Form 1040-X.  

I just looked this up because I was unsure of the time frame and here's what the IRS says about timing:

"Generally, for a credit or refund, you must file Form 1040-X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later."

[simply-the-best-for-you]

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@rckr43 wrote:

WOW, information overload. LOL

Thanks.

Seems what it boils down to is the need to keep track of packaging materials, supplies, shipping costs, even the computer and printer used, etc.... Because: Filling taxes is about profit, while realizing that sales tax is included with all sales..... making 'overpaying' easy.

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I personally don't keep track of printer or PC, b/c I use those for many other things too.   But you forgot your probably biggest expense besides shipping - acquisition costs.   Also, keep track of mileage, as you are able to deduct business mileage.  I keep a notebook in the car for extemporaneous notes - where, when, why (if not obvious), how many miles.