1099

[ninjasharon]

I received my 1099 and it has a sale on there that was refunded.  So...it shows me earning more than 600 dollars when I actually did not.  I had a conversation with someone when this came up and they asked for my social a few months ago they said I'd receive a 1099 but it would show that the one item was returned and the total was below 600.  That, of course, did not happen.  I tried to call and could not get a human.  Any ideas?????

[wastingtime101]

When you account for your expenses you need to factor in any refunds sent to buyers for returns or cancellations.

As you realized, eBay tallies gross income and does not account for refunds issued to buyers.

[nobody*s_perfect]

Your 1099-K is correct, and the person you spoke to was mistaken.   The 1099-K represents all of the funds that eBay processed for you. They don't deduct anything: not refunds, fees, postage, etc.  If you issued a refund, then you take that deduction on your tax forms.   

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

[pburn]

@ninjasharon 

I just want to clarify and emphasize that every reporting entity--not just eBay--reports Form 1099-K figures in the same way. It's an IRS requirement, not a decision made by eBay.

From this IRS document, in part:  Understanding Your Form 1099-K 

What is included on the Form 1099-K?

Whether you own a business, are self-employed, work in the gig economy or are selling personal items, Form 1099-K includes the gross amount of all payment transactions. You may receive a Form 1099-K from each payment settlement entity from which you received payments in settlement of reportable payment transactions. A reportable payment transaction is defined as a payment card transaction or a third-party network transaction. A third party network transactions may include a payment through a payment app.

• Payment card transaction means any transaction in which a payment card, or any account number or other identifying data associated with a payment card, is accepted as payment.
• Third party network transaction means any transaction that is settled through a third-party payment network, but only after the total amount of such transactions exceeds the minimum reporting thresholds.

The gross amount of a reportable payment does not include any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts. The dollar amount of each transaction is determined on the date of the transaction.

[hachumi]

The 1099 is going to turn out to be an accounting disaster when they start flying.   Listing items has become more of a pain as time goes on, all the workarounds I have to do to list stuff, like sales tx.  I live in a state that has no sales tax, but for sales tax I can't put zero, if I do It stops me,  I have to put in 00.001 Tax to collect, been that way for several years now.  That's just one I deal with every time I list.  So When the 1099's do come out I'd imagine a bunch of mistakes on Ebays part, and with no customer service, and even worse scammer numbers on the net. Get the popcorn ready should be a good show.

[dbfolks166mt]

The 1099 is going to turn out to be an accounting disaster when they start flying.   Listing items has become more of a pain as time goes on, all the workarounds I have to do to list stuff, like sales tx.  I live in a state that has no sales tax, but for sales tax I can't put zero, if I do It stops me,  I have to put in 00.001 Tax to collect, been that way for several years now.  That's just one I deal with every time I list.  So When the 1099's do come out I'd imagine a bunch of mistakes on Ebays part, and with no customer service, and even worse scammer numbers on the net. Get the popcorn ready should be a good show.

     I live in VA which has had a 1099 threshold issuance requirement of $600 since 2020 and have been getting 1099's from eBay, PayPal, Venmo....... for several years and have had not problems or issues except for the first year when eBay failed to issue the 1099 on time and I wound up having to call the VA. IRS to get it issued after eBay customer support provided no help and pretty much ignored the problem. 

     Regarding sales tax on your listings you should NOT be collecting sales tax, eBay does that, and it is based on the state the buyer is located in not the sellers location. 

[r_lresale]

@hachumi 

What workaround are you doing for tax? Ebay takes care of all that no need for that to even be a concern. Also tax is charged according to your buyers state not yours so the tax collected is always different. If you live in a state that requires you to file the state taxes quarterly, etc. you would just enter 0 taxable sales unless of course you made any sales in person that you collected tax for. 

[pburn]

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@hachumi wrote:

 I live in a state that has no sales tax, but for sales tax I can't put zero, if I do It stops me,  I have to put in 00.001 Tax to collect, been that way for several years now.

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@hachumi 

Can you go into a little more detail about that? Where are you putting "00.001 Tax to collect?"

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@hachumi wrote:

  So When the 1099's do come out I'd imagine a bunch of mistakes on Ebays part . . .

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What kinds of mistakes are you predicting, exactly?

[hachumi]

Look at the tax rate table where they they ask how much state tax you want taken out.

[hachumi]

look at the tax rate table where they ask what part of state tax you want taken out

[hachumi]

A clusterf**k

[dbfolks166mt]

Look at the tax rate table where they they ask how much state tax you want taken out.

Not sure why you would even be using a tax rate table. 

[hachumi]

not sure why you are commenting either.

[dbfolks166mt]

not sure why you are commenting either.

     Trying to be helpful but not a problem continue as you are doing. However, since eBay started collecting and remitting the sales tax there is no reason to use a tax table. You may want to take a look at the following. 

https://www.ebay.com/help/selling/fees-credits-invoices/taxes-import-charges?id=4121#section2 

[hachumi]

you're not trying to be helpful, you're just another eBay cheerleader who wants to pick apart anybody's post who sez things you don't like.  Rah rah rah.