mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@rfmtm wrote:Your ebay 1099 includes all gross funds processed that buyers paid with the exception of sales tax collected by ebay. Besides not including ebay sales tax, it also does not include any refunds to buyers, fees, or other expenses.
Suggest you sort and subtotal from the transaction report here:
https://www.ebay.com/sh/fin/report
Keep in mind that they do not use Transaction date. They use Payout/settlement date. So only the transaction that a Payout was actually released in 2021 will be on the 1099K.
@goldazar wrote:The 1099K contains total amounts processed by the vendor including taxes. I did compare transaction report to 1099K and it doesn't match
That would be unusual as they did not do it that way last year and the policy page says it does not include sales tax. But if some glitch or something happened, that would be among the easiest issues to resolve. When you reconcile the number to arrive at your Net Sales, take the amount of sales tax as a expense / deduction.
1099Ks report Gross Receipts [not income or sales] which is very different from Gross sales or income. From the Gross Receipts number you need to deduct for refunds and cancellations to arrive at your real Gross Income. Then from there you deduct all your expenses [fees, product costs, shipping, etc] to arrive at Net Income which is what you are taxed on.
@goldazar wrote:Even when I sum ALL of my gross transactions for 2021 (which include refunds, partial refunds and cancellation) I get total 7.1% lower total than 1099K. How would you explain it?
Are you going by transaction date or Payout/settlement date?
If you were in MP in 2020, the 1099k was also representing sales by Payout/settlement date, not the transaction date. So it is likely that a few of the 2020 sales would be accounted for in your 2021 1099k because of when the Payout actually was issued.
In the seller hub you will find all the Payout reports that may help you reconcile. Or use the payout date on the Report you can download for all your sales.
@babclassics wrote:
@coffeebean832 wrote:
@goldazar wrote:The 1099K contains total amounts processed by the vendor including taxes.
eBay-collected sales tax is NOT included.
Seller-collected sales tax IS included.
Orders that resulted in cancellations and returns are included in the gross totals.
Mostly agree but am seeing some cancellations that DO appear on my sales reports but do NOT appear on the 1099-K gross. For what I can tell so far it depends on weather or not they "posted". Not sue how I am supposed to know that? Am guessing that transactions that were cancelled quickly don't post? Cancelled transactions that posted and were refunded when cancelled do show (on 1099) even if cancel was within just a few hours.. Still trying to find a pattern.
Needless to say my monthly book keeping by sales date makes it a royal pain to reconcile the 1099-K monthly details reports. The month by month 1099-K details are based on posted date, not sales date. I can deal with that... ughhh, but this canceled transactions duality has me stumped. So far am off by about 2000 between my books and the 1099-K, Don't recall this ever happening with the PayPal 1099-K from past years.
All 1099Ks report Gross RECEIPTS which is NOT the same thing as Gross Income or Gross Sales. Gross Receipts is your total money that originally entered your MP account BEFORE ANY deductions for anything. That is why it is called Gross Receipts.
Now here is a real downside of the Ebay reports offered. The detailed sales report we can download into a worksheet program can be different than what your 1099K says for a few reasons.
It would be nice if Ebay had a report like Paypal had called a reconciliation report, which always perfectly matched the 1099K. All the details where there and it made things so much easier. But PP had it easier on this front than Ebay does since PP when by transaction date because even though our funds weren't released immediately from the funding sources, PP fronted us the money. So everything that came through PP was on the 1099k.
It is different for Ebay. They do not go by transaction date for what appears on your 1099K. They go by Payout/settlement date. So it will be on your 1099K if they Payout happened within 2021.
For example, sellers that do Weekly Payouts. Their last payout that would show on their 2021 1099K will be as of 12/28. All the sales from the time of that payout until then end of the year on 12/31 will be on the 2022 1099K.
@goldazar wrote:Even if I go from payout date I still get pretty close totals of all transactions (including cancellations) to my 1099-K. It still looks like cancellations/refunds were not decucted from 1099-K totals
Nope. Keep working as those numbers are not included. You need to REDUCE your 1099K Gross Receipts number by ALL refunds no matter the reason for the refund.
Something you are looking at is incorrect. Unfortunately I can't know what it is, I can only work with what you share.
@goldazar wrote:Got it, thanks! eBay reporting sucks... they could do everything much easier...
That is NOT Ebay's fault. That is how a 1099K works. It is how IRS directs ALL Marketplaces and Money Processor to fill them out. Ebay did not write the rules for the 1099K nor can they do whatever they want with the 1099K. That is all on the IRS.
It isn't that hard to look at really. It is the total money you had incoming to your MP account BEFORE any deductions for refunds. Then you deduct ANY $$ refund you gave for any reason to arrive at your Gross sales. From there you deduct all your expenses like shipping, product costs, FVFs, etc. to arrive at your Net sales. If your sales are taxable, then your taxes will be determined by your Net sales.
I find the reports to be pretty good and VERY comprehensive but it does take some effort to format them into a form you feel comfortable with. While each person's style is different a couple of thoughts/tips.
I save the CSV as an Excel spread sheet and then create separate tabs to sort the data. The first tab has the original data pull which I create copies of. I keep the original data just in case I mess something up creating to other tabs. I then sort those copies into categories. For example for my revenues tab I sort column N in the report on the values highest to lowest and then remove the negative number rows and total the column. This should be your Gross Transaction amount and match the figure on your 1099. At least that was the case last year. I then create additional tabs to separate the expenses. I first sort the data on column N lowest to highest and remove all the positive numbers. This is the total of all the expenses. I then copy that tab to another one for the Ebay fees and one more copy for the refunds and other fees.
You can sort the data in those tabs based on the Type, which is column B and remove everything but the Shipping Label costs and total, same for the fees except you sort the data on column J and remove anything rows that are not Final Value Fees. For this tab you have to sum columns I and J and add the together. Column has the I column is the $.30 fixed fee and column J has the variable calculated FVF. The last one is every other type of expense so I sort the tab data on the Type and remove all the shipping label rows and the FVF rows which leaves me with the refunds, returns, cancelations, etc.
Just some ideas but it boils down to what you are comfortable with and understand and what you could explain to your account or auditor.
" My problem is still trying to understand why only some "sales" are part of gross receipts and some are not. Just seems like they all should be unless the buyer never paid and transaction was cancelled for non-payment. Does that should right?" It isn't correct and because I can't see what you see I can't really help you with this one. You'd have to post too much detail about your personal business and I'd never ask you to do that. All sales are part of Gross Receipts, without exception. If they happened in a Payout in 2021, regardless of the date of the sale.
It would likely be easier for you to just look at and deduct ALL refunds that pertain to any sale that was in your 2021 Payouts. A cancellation may or may not be in your 1099k. For example: If a buyer did NOT pay and you cancelled that transaction for non payment or for any other reason, that cancellation would NOT be on your 1099K because funds were never in play or refunded.
Hi everyone- we’re still looking into this.
I appreciate everyone taking their time to let us know about the errors you’re seeing. I’ve gathered the user ID’s of members reporting incorrect data on their 1099-k form and I have sent this for further investigation. Thanks again for working with me!
