eBay

keziak · ‎12-20-2020

I am wondering if I will get a 1099 from ebay this year. Is the document based on total or net sales? If total I may just squeak in under the wire if I make enough sales by the end of the month. But I will be well below the $20K threshold if based on net sales.

dbfolks166mt · ‎12-20-2020

The thresholds are $20,000.00 (gross sales) and 200 items before you will receive a 1099. That does not mean you should not still report the income.

luckythewinner · ‎12-20-2020

@keziak wrote:
I am wondering if I will get a 1099 from ebay this year. Is the document based on total or net sales? If total I may just squeak in under the wire if I make enough sales by the end of the month. But I will be well below the $20K threshold if based on net sales.

According to this page, the 1099K will report the total of the gross payments (not including sales tax).

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

If you are in Massachusetts or Vermont, you will get one if you exceed $600 per year regardless of your transaction count.

therogue-trader · ‎12-20-2020

The 1099-k is sent based on total, not net

keziak · ‎12-20-2020

thanks for the info all. Of course I report all income whether I get the 1099 or not, but it's a personal milestone, especially since I started in managed payments this summer, and I made enough before to get a 1099 from PayPal.

nobody*s_perfect · ‎12-21-2020

Each payment processor figures what they processed for you as the basis for whether they have to send a 1099-K. So if you started MP this summer, then you PayPal and eBay/Adyen would be figuring your totals separately. Each seller who has switched over to MP could get 1099's from both processors, or just one, or neither, depending on what was processed by each company. And also depending on their state's threshold; other states are considering or implementing lower thresholds, too. According to this article, Virginia has joined VT and MA in having a threshold of $600:

https://sovos.com/blog/2020/06/10/a-lowered-federal-1099-k-threshold-gains-national-attention/

ETA: https://www.tax.virginia.gov/sites/default/files/inline-files/tb-20-10-virginia-1099-k-filing-requir...

keziak · ‎12-21-2020

That's an eye-opener, thanks! How did you come across this bulletin, are you also in Virginia and/or follow tax laws?

nobody*s_perfect · ‎12-21-2020

I'm in MA, where the $600 threshold was implemented a couple of years ago with great stealth. I just Googled to find out whether other states had done the same.

fern*wood · ‎12-21-2020

@nobody*s_perfect wrote:
I'm in MA, where the $600 threshold was implemented a couple of years ago with great stealth. I just Googled to find out whether other states had done the same.

Good catch. I bet that info will catch a bunch of tax deniers off guard. I wish I could remember the ID of the poster that used to frequent the board advising everyone to ignore reporting ebay income to the IRS and calling ones that did foolish and alarmists.

luckythewinner · ‎12-21-2020

@fern*wood wrote:
@nobody*s_perfect wrote:
I'm in MA, where the $600 threshold was implemented a couple of years ago with great stealth. I just Googled to find out whether other states had done the same.
Good catch. I bet that info will catch a bunch of tax deniers off guard. I wish I could remember the ID of the poster that used to frequent the board advising everyone to ignore reporting ebay income to the IRS and calling ones that did foolish and alarmists.

If you read the actual law, I believe it says that payment processors are required to file the forms once you exceed the threshold. But I do not think there is any language in the law that prevents a payment processor from issuing one even if you do not meet the threshold.

I would sometimes wonder what the response on this board would be if PayPal had ever decided to unexpectedly issue a 1099K to everyone 🙂

keziak · ‎12-21-2020

Was he talking to the ebayers who basically run yard sales here?

My accountant doesn't know much about online sales businesses and since I am small fry doesn't care/respect.

2020 is going to be a shock to my system because due to the collapse of my inventory sources I have instead been buying heavily on Facebook, one would say compulsively. My big storage unit is crammed full and I have completley filled my grown daughter's room. Still overflow to the family room and porch. Hmm, maybe I do have a problem. I have 4 pickups or deliveries this week too. The problem is that I am only one person and only have so much time/energy to list and ship. My ebay business has really taken off but my profit/loss statement is going to be ugly due to spending so much.

nobody*s_perfect · ‎12-21-2020

You need to either find a wiser accountant or at least become more familiar with the IRS policies. Take a look at IRS Schedule C and its instructions. Keep track of all your expenditures.