1099 question for those who have received one

[anasazirose]

I sell most of my items from our own 'things'.  I'm also starting to sell some of my mom's things because she is also downsizing.  I'll have a few items for a schedule D.  Since I won't get a 1099 for 2023, but expect one for 2024 provided there's not another delay and I do not file as a business, I have a question for those who have received a 1099.

When I pay for my ebay store and supplies on ebay (using my coupon), I pay with my ebay funds.  Will my 1099 from ebay show what was

sold (gross sales) OR

sold items - shipping & ebay fees OR

sold items- shipping & ebay fees & taxes collected by ebay OR

sold items - shipping & ebay fees & taxes collected by ebay & store costs OR

sold items - shipping & ebay fees & taxes collected by ebay & store costs & shipping supplies

                         purchased from ebay OR

sold items - shipping & ebay fees & taxes collected by ebay & store costs & shipping supplies

                         purchased from ebay & personal ebay purchases purchased with ebay funds OR

only amounts transferred out of ebay funds into my personal account OR

some other net amount?

Thanks in advance!

[broto_64]

My 1099 showed only gross income as sales.

It is up to me to deduct shipping, supplies, value of items, refunds and any other expenditures as related to my ebay sales as expenses.

[heckofagame]

eBay and Form 1099-K | eBay

[caldreamer]

EBAY shows "gross sales" (purchase price + shipping income).    Sales tax does NOT go to you so it is not reported as income.   Because you are selling your mother's items (you will incur her tax liability).

EBAY has "easy to read" 1-page report that shows YTD totals for (gross sales/orders, refunds, EBAY fees, shipping expense).   You must file as a "business" is you want to deduct business expenses.

To print report go to Payments, Reports, REPORTS (NEW) and select LAST YEAR.

GROSS SALES

- Refunded merchandise

- EBAY fees

- Shipping expense (cost to print labels)

- Cost of goods sold (your cost to purchase items)

- Shipping Supplies and office supplies

- Mileage and Miscellaneous expenses

NET TAXABLE INCOME

[caldreamer]

EB AY does NOT keep track of items you purchased (toner cartridge/shipping supplies) for your business.   That is your responsibility (be sure to keep all receipts to backup all your tax deductions).

[dbfolks166mt]

     What the 1099-K will show is the gross amount of funds processed by the third party financial processor as shown below. You do NOT have to receive a 1099 to file a schedule C and it may behoove you to do so. That figure represents what heckofagame referenced in the link provided. 

     As others mentioned there are reports you can pull to get the details of your eBay selling expenses, which you will need for the Schedule C if you do one. Other expenses outside of eBay are your responsibility to keep track of. Shipping supplies, Cost of Goods Sold (COG), printer ink, mileage, shipping labels if you don't use eBay........... 

[wastingtime101]

@anasazirose 

Deadline for eBay to release 1099-K forms is Jan 31st each year. They will be posted on your payments section here:
https://www.ebay.com/sh/fin/taxforms

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

You can go to this page and generate a CSV report and you'll see what's counted on your 1099-K at the transaction level.  https://www.ebay.com/sh/fin/taxdetails

"Your 1099-K Details report shows all the orders that factored into your gross amount of payments. The report also provides other details, such as transaction fees, which may be relevant when preparing your taxes."

There's a guide published here where you can further drill down and get reports for expenses and refunds: https://www.ebay.com/mes/taxguide?sh=true

You can also download a transaction report here:

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

[broto_64]

Rather than filing as a business you may wish to consider filing ebay as income from source "self employment" or "self-employed."

[anasazirose]

I thought a schedule C is for businesses?

[anasazirose]

Got it!  So it's a 1099 stating the total processed amount.  It does not state income or profit.

[wastingtime101]

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@anasazirose wrote:

Got it!  So it's a 1099 stating the total processed amount.  It does not state income or profit.

---

It's gross $ processed on your behalf. Sales tax is not included.

You have to account for your own subtractions like cancellations and refunds because they will be included in the gross amount as money processed into your account.

You have to account for your eBay fees, store fees, shipping supplies, and any other expenses.

All of the report links I provided above should help to a large degree.

[monica-sells]

As I understand it, it is not. However, what it does is give you (individual) the benefit of business-type deductions to lower any tax liability you may have. (noting you are filing Sch D long term capital gains and assuming those are not losses) You may want to try and reduce that liability by using Sch C

What is a Schedule C?

Use Schedule C (Form 1040) to report income or loss from a business you operated or a profession you practiced as a sole proprietor. An activity qualifies as a business if: Your primary purpose for engaging in the activity is for income or profit. You are involved in the activity with continuity and regularity.

[mam98031]

I'm not quite sure why so many people are so reluctant to be considered a Business.  It doesn't mean that those that are not calling themselves a business do not have to report ALL their income sources to the IRS yearly.  We are all responsible to do that.  

Most states allow you to set yourself up as a Sole Proprietorship at no cost or around $50.  I've been set up that way with the state I'm in for all my internet selling career.  My state offers credits for small businesses, so I have never paid any state business taxes.

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

[dbfolks166mt]

I thought a schedule C is for businesses?

     It is. Whether you use the schedule C or not depends on whether you meet the conditions the IRS considers to be a business. A business is loosely defined by the IRS as any activity carried on for the production of income from selling goods or performing services. 

     You do NOT have to make a profit and in fact a lot of businesses/companies don't but there are restrictions and conditions regarding operating in the red that impose limitations on doing so. 

[dbfolks166mt]

@anasazirose wrote:

Got it!  So it's a 1099 stating the total processed amount.  It does not state income or profit.

It's gross $ processed on your behalf. Sales tax is not included.

You have to account for your own subtractions like cancellations and refunds because they will be included in the gross amount as money processed into your account.

You have to account for your eBay fees, store fees, shipping supplies, and any other expenses.

All of the report links I provided above should help to a large degree.

     One other link that may assist the OP is the following if they elect to file a schedule C. As always nobody on this forum can provide an exact solution without knowing specific financial information relating to the filer and those details are more than they would want to disclose on this forum. They should talk to a local tax professional. 

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf