mam98031 • Volunteer Community Member • Buyer/Seller since 1999
ShipScript has been an eBay Community volunteer since 2003, specializing in HTML, CSS, Scripts, Photos, Active Content, Technical Solutions, and online Seller Tools.
Simply-the-best-for-you Volunteer Community Mentor
There was a wonderful Podcast earlier today on the subject of 1099Ks. I would encourage sellers to take the time to go and listen to it or read the transcript, whichever is best for you. It is worth the time. Even if you think that you have a handle on the subject, it might just clarify something for you.
There was just a few things I'd like to clarify that come up in the Podcast.
There was discussion of what a SSN, TIN and EIN are. EIN is for Corporations and/or LLC. SSN & TIN is for individuals and sole proprietorships. A TIN is NOT exactly like an SSN. It is another number you can apply for from the IRS in order for you to help protect giving out your SSN. You can apply for the use of a TIN.
Throughout the Podcast Manish refers to Sales as to what the dollar figure reported on the 1099Ks and it is NOT sales. As many of us know, if we have a sale, sometimes the buyer simply doesn't ever pay. These non paid sales do NOT ever appear on a 1099K. 1099K's are reporting TOTAL MONEY received.
The $$ represented on a 1099K by Ebay or any other money processor is for how much MONEY was received into your account BEFORE any type of deduction to include refunds. 1099K represent your GROSS RECEIPTS before refunds of any kind for any reasons.
So in the Podcast, keep that in mind. Your 1099K is NOT reporting your Sales nor is it totally about your sales. It is all about the MONEY you received and was processed by the Money Processor, in this case Ebay.
This statement was made in the Podcast, while not wrong, I just thought a little more clarity was needed. "So you won't owe any taxes on something you sell for less than what you paid for it." This is specifically regarding those that sell only there personal stuff. I know for some that may have been crystal clear but others it may not have been and this is such an important point for MANY Casual Sellers.
"I'll add one final note on this subject of $600 threshold. It is calculated based on the date on which your item sold and not the date on which you received money in your account which may sometimes be different." First I don't think anyone is getting their money the same day a buyer pays, not in MP anyway. Second, the amount that appears as your Net Receipts on your Ebay 1099K is NOT based on your sale date / transaction date. That is incorrect. It is based on the Payout / Settlement date. The date MP releases your Payout to you. That is the date Ebay uses to calculate the Gross Receipts for each seller.
So this means if you are a seller that gets a Weekly Payout. In 2021 your last Payout was 12/28/21. So the remaining sales you had in 2021 will appear on your 2022 1099K.
In the Podcast they refer to the Ebay FAQs on the 1099K, here is the link.
https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html
The portion of the podcast dedicated to the 1099 is from 07:30 to 19:00 (12 minutes).
For those who are mad at eBay for sending a 1099 for only $600, eBay has a link at the top of their FAQ page about how they are fighting back against congress and how you can participate.
https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html
If eBay is displaying accounting errors, I would recommend contacting eBay. I don't think this thread will help at all. Several sellers have posted elsewhere that the information displayed on eBay's 1099 prep page displayed doubled data, but that the 1099 itself was not doubled. So accounting errors do exist in displayed data. Please report those errors to eBay.
@mod-designs4u wrote:I sold an item on 12-30-21 (buyer immediately paid) and the Managed Payment funds were deposited into my checking account on 1-4-22. The eBay financial statements are not including this sale for tax year 2022. Am I supposed to include this sale for 2021 or 2022?
As I stated above, it is the day the Payout is RELEASED, not when it arrives in your bank account.
@stainlessenginecovers wrote:So when 1 month (November) is off by $3000 (over reported), confirmed by the Ebay Statement, My Books, The MP Monthly Payout Report and the MP Annual Payout Report as well as I can still see and add up all but 1 day of November live transactions still shown on ebay.
That amount is NOT the 'day I was paid, deposited in the bank) since both October (month before) and December are only off by less than $100. It is a clear error.
That isn't what I explained above. From my OP "It is based on the Payout / Settlement date. The date MP releases your Payout to you."
@lloydsteventaylor wrote:This is absolutely unbelievable. I don't have my 1099 but eBay is on a podcast talking about 1099s.many sellers don't have their 1099s and many 1099s are incorrect but this guy is trying to explain 1099s.the deadline for issuing the 1099s is January 31. eBay please go back And read the law and stop podcasting when you don't know what you are doing.
I thought the 1099Ks were released yesterday for everyone. I know some sellers are stating theirs are incorrect, but that is a different issue.
Did you check your Seller Hub under Payments and then Tax Reports?
Something else important for everyone to remember is when did you enter Managed Payments. Ebay's 1099K will ONLY cover the time that you are covered by MP. So if you were part of the year in MP and part in PayPal, you may get 1099Ks from both, or one of them or neither of them. It depends on the money they processed while they were your money processor.
Thank you for posting this. May be helpful for any gotchas.
One comment though. I have an EIN. I just double checked the actual document & it IS an EIN & I am & have always been a Sole Prop. Now, I got my number many years ago, so maybe that has something to do with it or maybe Ebay is simply misinformed. But Sole Props CAN & DO have EINs.
