mam98031 • Volunteer Community Member • Buyer/Seller since 1999
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
@nobody*s_perfect wrote:Based on a few recent posts, apparently eBay believes that the threshold for sellers in California is already $600.
@nobody*s_perfect I'm not a tax expert, but I know different states can and do have their own thresholds for state income tax purposes and eBay would be legally required to follow those state laws.
Just from a quick google search I found this from the CA state tax board website:
@nobody*s_perfect wrote:I'm aware, since I live in a state that has had a $600 threshold since 2018.
I've seen the page where you got that image, and I can't understand why they would state "and are an app-based driver" when the 1099-K threshold should apply to ALL third-party payments. It was the only reference I could find that mentioned a $600 threshold for 1099-K in California, so I wonder why there isn't a more general statement somewhere.
@nobody*s_perfect maybe eBay sales fall under this provision for "gig economy" industries?
https://www.ftb.ca.gov/file/business/industries/gig-economy.html
@lloydsteventaylor wrote:thank you for your post. i started selling in July again. nothing before July. I was in MP since July. I sold approx $3500 for 2021. I am in New Jersey which has a $1000 threshold. I still dont have a 1099-k as of this minute. i was on online chat with ebay for 45 minutes yesterday asking why. the end result was the rep put in for the 1099-k but it would take 4-7 business days. in previous years going back to 2002 i have included my ebay sales on my schedule c with no 1099. this year i want a 1099-k before filing because i absolutely dont want a letter from the irs but i do report all of my income. i dont want an irs matching error letter.
now for your help. do you have any pull with ebay. if you possibly do then i wish you could help me get my 1099-k in seller hub under payments and tax reports. this should not be a complex ask. ebay MP has everything they need to post the 1099-k. it was due on January 31st. i dont understand why ebay has not posted it. Ebay should follow the law and issue 1099-k timely. again thanks for anything you can do.
Are you watching your Seller Hub under the Payment Tab for Tax reports for your 1099K. That is where it will appear.
We don't have any extra pull with Ebay to get you a 1099K released if in fact is has not. You just need to continue to contact Ebay.
https://twitter.com/askebay?lang=en
https://www.facebook.com/eBayForBusiness/
https://community.ebay.com/t5/Selling/How-do-I-contact-Customer-Support/m-p/32016431#M1783851
@valueaddedresource wrote:
@nobody*s_perfect wrote:Based on a few recent posts, apparently eBay believes that the threshold for sellers in California is already $600.
@nobody*s_perfect I'm not a tax expert, but I know different states can and do have their own thresholds for state income tax purposes and eBay would be legally required to follow those state laws.
Just from a quick google search I found this from the CA state tax board website:
This is a very interesting post. I'd lean towards a type in the highlighted section you show above. But it does answer why Ebay is issuing the 1099Ks for California.
@nobody*s_perfect wrote:But 1099-K's have always applied to third-party transactions. That final, third highlighted line seems to be saying that 1099-K applies to a new type of transaction rather than having a new threshold.
I'm still baffled why they haven't made it clearer if there's a new threshold for 2021 that's lower than the federal $20K. When my state went to a $600 threshold, there was no big announcement when the law was passed; I suspect that they wanted to catch people out. I wasn't aware of it until I received my first 1099-K (I had never reached the $20K threshold). But surely now that the following calendar year has begun, the 1099-K's are being sent out, and the threshold applies to taxes that people are preparing, they should be more direct about it.
1099Ks are specifically for Internet transaction ONLY. There are other types of 1099s that apply to other types of transactions.
I still think its a typo but Ebay would of course go by what it says to be safe.
@stainlessenginecovers wrote:@mam98031 "It is based on the Payout / Settlement date. The date MP releases your Payout to you."
There are 3 things (not counting 'hold') on the 'Payments' tab; "Processing" "Available" "Payout Sent of $XX on X/X/XX date". There is no 'Settlement' terminology used- so that is just confusing.
Anyway: I had an order on 1/31; it was Processing on 1/31; it moved to 'Available' on 2/1 (next day) and on 2/2 it shows 'Payout Sent of $XXX on 2/2/22'.
So that 1/31 sale goes in the February batch (even though the 'Payments Report', provided by MP- shows it as a gross transaction on 1/31?
I know, most places on Ebay it is referred to a Payout. But in conversation Ebay often refers to it as Settlement date, so I included it to make sure I had it covered. It is nothing more than that.
I am well versed on what the Payment Summary page shows, but thank you for the recap.
YES, whatever the PAYOUT date is, is the month and year it will show up on a 1099K.
@mam98031 wrote:
@valueaddedresource wrote:
@nobody*s_perfect wrote:Based on a few recent posts, apparently eBay believes that the threshold for sellers in California is already $600.
@nobody*s_perfect I'm not a tax expert, but I know different states can and do have their own thresholds for state income tax purposes and eBay would be legally required to follow those state laws.
Just from a quick google search I found this from the CA state tax board website:
This is a very interesting post. I'd lean towards a type in the highlighted section you show above. But it does answer why Ebay is issuing the 1099Ks for California.
I don't think this answers why eBay is sending those 1099K's to us sellers with less than $20,000 processed by MP in 2021.
The highlighted section it says ..."AND are an ap-based driver" [caps added]. I'm not a driver, and why would eBay be responsible for sending 1099K's to people who drive for Uber or Lyft? Those companies would be the ones sending 1099K's to their drivers.
To me it appears from the paragraph below the one highlighted that eBay sellers won't be affected by the $600 threshold until they file their returns for 2022--just as eBay had been telling us.
@tealt wrote:
@mam98031 wrote:
@valueaddedresource wrote:
@nobody*s_perfect wrote:Based on a few recent posts, apparently eBay believes that the threshold for sellers in California is already $600.
@nobody*s_perfect I'm not a tax expert, but I know different states can and do have their own thresholds for state income tax purposes and eBay would be legally required to follow those state laws.
Just from a quick google search I found this from the CA state tax board website:
This is a very interesting post. I'd lean towards a type in the highlighted section you show above. But it does answer why Ebay is issuing the 1099Ks for California.
I don't think this answers why eBay is sending those 1099K's to us sellers with less than $20,000 processed by MP in 2021.
The highlighted section it says ..."AND are an ap-based driver" [caps added]. I'm not a driver, and why would eBay be responsible for sending 1099K's to people who drive for Uber or Lyft? Those companies would be the ones sending 1099K's to their drivers.
To me it appears from the paragraph below the one highlighted that eBay sellers won't be affected by the $600 threshold until they file their returns for 2022--just as eBay had been telling us.
@tealt check out the second screenshot I posted in message #18 on this thread - info can also be found here:
https://www.ftb.ca.gov/file/business/industries/gig-economy.html
If you use any of the online platform applications available to:;
Rent a house
Provide car rides
Connect and provide other goods or services
This is the gig economy, also known as the shared, digital, or peer-to-peer economy.
New for 2021 tax year: 1099-K, third party network transactions
While I agree it's still not entirely clear, it seems possible that either the state of CA and/or eBay may believe that eBay sales qualify as part of this "gig economy" provision.
