eBay

soleman5000 · ‎06-25-2022

I see eBay on their financial statements puts the net amount for refunds instead of the gross amount. Meaning they take out whatever fees they credit back to you, so the amount doesn’t reflect the total amount you refund. I’m just wondering is the net amount what your supposed to use for taxes and your books, or do you use the gross amount? For example if you had 749 dollars worth of returns gross in April and eBay credited you back 97 in fees, the net amount would be 652, and that’s the amount they put on their financial statements. So is that the number you use for returns? I also notice on their fee invoice, they deduct the credit fees from the fee amount. I’m kind of confused by this.

luckythewinner · ‎06-25-2022

Let's say you sell an item for $100 and eBay deducts $15 in fees so you receive $85.

When the transaction is refunded, eBay takes $85 from you and adds $15 from eBay and sends the buyer $100.

If you reported the transaction as +$100 in gross income and -$15 in fee expenses for a net of +$85, you need to report the return as -$100 in gross income and +$15 in fee expenses for a net of -$85.

If you export your transaction history you will see a "Refund" transaction with numbers that are essentially the opposite of the "Order" transaction so that when you add them together they net to zero.

caldreamer · ‎06-25-2022

IRS requires that you show "gross amount" for sales/returns. Then you deduct "expenses" (EBAY fees, actual shipping costs (labels), cost of goods sold, mileage, office supplies). Anything related to your business is deductible (be sure to keep receipts proving your claims). You are taxed on "net amount" after all expenses are deducted.

soleman5000 · ‎06-25-2022

Hi, I understand that part. What I’m confused about is that eBay takes away from the fee amount as well as the refund amount in their reports. Let’s say I have -1400 in fees, they credit +95 back to the fee amount and now it’s -1305 in fees, but they also take away from the refund amount too. I had also -797 in total gross refunds and the credited fees was +95, so the net refund amount would now be -702 . So essentially what I’m saying is they are taking the 95 fee amount credited back to me and deducting it from the final value fee amount and the gross refund amount, is that the correct away to account for that?

soleman5000 · ‎06-25-2022

I mean wouldn’t that be double dipping? I understand taking the +95 away from fees or refunds, but they take 95 away from the refund amount and the fee amount, so it would be like deducting double the amount, 190, accounting like that, unless I’m just not seeing it clearly.

luckythewinner · ‎06-25-2022

@soleman5000 wrote:
Hi, I understand that part. What I’m confused about is that eBay takes away from the fee amount as well as the refund amount in their reports.

That is why I export the transactions and create my own report using the raw data.

luckythewinner · ‎06-25-2022

@soleman5000 wrote:
I mean wouldn’t that be double dipping? I understand taking the +95 away from fees or refunds, but they take 95 away from the refund amount and the fee amount, so it would be like deducting double the amount, 190, accounting like that, unless I’m just not seeing it clearly.

The payment:

Buyer pays $100 to eBay

eBay gives $15 to eBay

eBay gives $85 to you

The refund:

eBay takes $85 from you

eBay takes $15 from eBay

eBay refunds $100 to the buyer