1099-k help

[fitburse]

Hello,

So I have to file the 1099-k for 2017.

I'm pretty new to this but what information would I need to take to my accountant?

Any information from eBay that I may need to provide? Also, I downloaded my 1099k reconciliation. Is that my total sales for 2017? I would greatly appreciate all help and comments. Thank you!

[partial*eclipse]

A 1099-K is not something you file, it's a form that you receive from PayPal.

[fitburse]

Yes, I received the form.

Don't I have to report it?

[orangehound]

A 1099K is simply total (or gross) income.

You need to also identify all expenses that can be deducted from that income, including things such as

• PayPal fees
• eBay fees
• Postage costs
• Shipping and business supplies
• Wholesale inventory costs
• Storage costs (if you need to warehouse inventory)
• Mileage driven in support of the business
• Inventory losses (shrinkage)

[partial*eclipse]

If you make a profit, that is reportable income, even if you don't get a 1099-K from PayPal. Most sellers use IRS Schedule C, so you could look at that form and its instructions to get an idea of how the IRS sees things. Here is the IRS page especially for "online auction sellers":

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tax-Tips-for-Online-Auction-Sellers

[nederlander1]

I've always wondered how many sellers that fly under the PayPal $20,000 and 200 transactions thresholds that generate a 1099 to the IRS actually do report their earnings.

[monroe67]

If you normally use the services of an accountant to prepare your federal and state tax returns, simply take the 1099-K to him/her with all the other tax-related documents you have or will receive, and he/she will explain it to you.  

If you are selling a lot, you really should start keeping good records of everything.  Everything:  cost of boxes and packing materials, amounts you spend on postage, etc., etc.  Again, your tax professional is the best source of info on this.  

[the*dog*ate*my*tablecloth]

Not reporting income only works for so long. Eventually the IRS will catch up to you and impose all kinds of penalties and interest. There are no secrets any more when everything runs through the interwebs.

If anyone loves the X-Files I heartily recommend one of the ones from this season where they talk about the fact that there are no secrets any more. It's one of the comedy ones. I rarely watch tv because my attention span is about a minute but it was great!

[thatsallfolks]

---

wrote:

Yes, I received the form.

Don't I have to report it?

---

@fitburse

You do exactly the same thing that you did to report your 2016 eBay income. You did report that, right?

[sharingtheland]

---

wrote:

A 1099K is simply total (or gross) income.

You need to also identify all expenses that can be deducted from that income, including things such as

• PayPal fees
• eBay fees
• Postage costs
• Shipping and business supplies
• Wholesale inventory costs
• Storage costs (if you need to warehouse inventory)
• Mileage driven in support of the business
• Inventory losses (shrinkage)

---

Also, OP, the number on that 1099 is a total of all monies deposited to your paypal account.  Not all (usually) is business income.  

[fitburse]

Hi,

thanks for the reply.

where can I find my total PayPal and eBay fees for 2017? As well, as my postage?

[sam9876]

Your eBay fees can be found on eBay.

Your PayPal fees can be found on PayPal.

Your postage expenses can be found wherever you print your postage.

[moeyt2010]

I'm not a business.

I'm just selling my stuff that I don't want anymore.

In 2017 I had 28 Transactions and $962.27 Income.

I live in Massachusetts, and Paypal sent me a 1099-K.

There was no actual profit.

I can write a list of the 28 things, and write down what I initially paid - to my best recollection.

Do I have to file a Schedule C as a Business to avoid paying Income Tax on "Profit" I did not make ?

[moeyt2010]

I make very little money in my real life as well.

Nothing "under the table", simply so little that the Standard Deduction covers all taxes.

What would happen if I simply pretended the $962.27 was all profit, added it to my real income, and then apply the Standard Deduction ?

I'm pretty sure I would still not owe any taxes.

[partial*eclipse]

I have never heard of PayPal issuing a 1099-K when a member was below the thresholds.  I'm in MA and didn't get one, to it's not some special State thing, either.

You have to file  a Schedule C, to report and deduct your expenses which will show that you made no profit, otherwise the IRS is going to want you to pay Social Security taxes of 15% based on the whole $962.  Look through Schedules C and SE to see how IRS looks at this.   Here is the IRS page especially for "online auction sellers":

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Tax-Tips-for-Online-Auction-Sellers

You should also look into the EITC, Earned Income Tax Credit.  It's a credit, not a deduction, so it could put money in your pocket even if you own no taxes.

https://www.irs.gov/pub/irs-pdf/p596.pdf