California 1099-K for 2021 : to be fixed

[shipscript]

California sellers were surprised to receive a 1099-K this year for sales over $600, when the state's requirement for 2021 affects only gig workers (like Uber drivers) who are paid over $600.

eBay reports that the 1099s have not yet been sent to the state or IRS and eBay is working on correcting that error. eBay will notify the affected sellers.

The old rules for 2021 reporting ($20,000 AND 200 transactions) are still in place for California sellers who received a 1099-K this month for those larger thresholds.

[7606dennis]

Actually, I believe that in the case of a hobby seller all of the income received would be taxable since they are not allowed business deductions as a hobby seller.

[bbravo65]

...filing selling on eBay as a business, not hobby and, with a helpful, experience tax accountant you will get some positive numbers in return...

...but making sure you collectively gather up the information of your business expenses...

[7794heather]

Im not in CA but I got a 1099k today and dont think I should have. Its saying my gross is 10k more than it was. I was below the 20k threshold. I DO MY TAXES EVERY YEAR (before someone asks) and their numbers dont even match the statements they send me monthly. I downloaded the transaction report (the one with all the columns showing net, fees, shipping and gross).

Their gross on there is 7k less than the 1099.

So if we are not in Ca should we still be concerned their form isnt right? 

My gross numbers definitely dont match and I log every sale.

[dbfolks166mt]

     You should be concerned as this information will be sent to the IRS. One of the quickest ways to trigger an audit is to receive a 1099 and not report the income on your taxes. Bots can detect this pretty quickly. If the 1099 numbers are incorrect you need to contact eBay via Facebook, the call center help is useless. If they have not corrected the problem by 28 February you need to contact the IRS. If you never receive a correct 1099 there are some special processes you need to follow when you file your taxes. 

Disputing an incorrect 1099

     If the issuer of an erroneous 1099 refuses to correct its mistake, you'll need to include an explanation on your tax return and attach documentation in support of your assertion. Let's say you receive a 1099 showing you were paid $20,000 from a given company, when in reality you were only paid $15,000. You can't just list that $15,000 on your tax return and call it a day, because the IRS will notice the discrepancy and most likely go after you for the difference. At the same time, you shouldn't simply pay taxes on an extra $5,000 you never received.

     Instead, what you'll need to do is list the $15,000 but attach a statement explaining the overpayment. That statement should include documentation in support of your claim, such as copies of canceled checks and invoices. You should also include proof that you attempted to reach the issuer, and that the issuer either failed to respond or refused to comply.

     While the latter steps clearly require a bit of extra legwork, you'll need to take them if you want to avoid getting audited or improperly taxed. Unfortunately, when it comes to 1099s, mistakes do happen, but if you don't address them, you'll be the one who ultimately loses out.

[natalya32]

Yes. Just got one yesterday. The form includes $5600 in income on sale that did not go through. Never got a penny from that, yet somehow I got it included in the form.

[greenmagicpub]

I never received my 1099-K in the mail, but I did get the email from ebay saying it was sent to me, and that is was wrong information. It seems a lot of you got one, so I figure mine must've have got lost by the post office, or delivered to someone else's mailbox. Ebay should provide us with a way to view it online so we can download it.

[azh-71]

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@shipscript wrote:

California sellers were surprised to receive a 1099-K this year for sales over $600 ... eBay reports that the 1099s have not yet been sent to the state or IRS and eBay is working on correcting that error. eBay will notify the affected sellers.

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This is tricky situation - eBay says that IRS and state weren't notified, but can you really believe them?  I would just go ahead and file taxes on that income, you'll have to do it next year in any case.

[shipscript]

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@azh-71 wrote:

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@shipscript wrote:

California sellers were surprised to receive a 1099-K this year for sales over $600 ... eBay reports that the 1099s have not yet been sent to the state or IRS and eBay is working on correcting that error. eBay will notify the affected sellers.

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This is tricky situation - eBay says that IRS and state weren't notified, but can you really believe them?  I would just go ahead and file taxes on that income, you'll have to do it next year in any case.

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Do I believe them? Absolutely! Why on earth would any large corporation file forms so far ahead of schedule? My corporation files 1099s as well. I never send them out early as that would eliminate any opportunity to make a correction the easy way.  The reason the filing deadlines are so extended is for the very reason that it gives the issuer the opportunity to deal with complaints and errors without having to get tangled up with the amended reporting process at the IRS. 

[dhbookds]

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@natalya32 wrote:

Yes. Just got one yesterday. The form includes $5600 in income on sale that did not go through. Never got a penny from that, yet somehow I got it included in the form.

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if the payment was made and then a cancellation done.......so the payment was refunded,  the payment will be included in the total.......   one then shows it as a refund on the tax form and deducts it from the total. 

[1228sales]

What You Need To Know About The Updated 1099-K Threshold?

As you may already know, the IRS is streamlining its reporting and compliance regulations in order to improve the accuracy of reporting and tax transparency. The IRS has recently introduced a couple of changes to the 1099-K reporting.

This change comes after President Biden signed the American Rescue Plan Act of 2021 (ARPA) into law on March 11th, 2021. According to Forbes, the bill specifies the minimum threshold has been lowered for Form 1099-K, a form filed by the Payment Settlement Entities (PSEs) to report gross amounts of all reportable payment transactions.

This law will become effective in 2022 and will impact the January 2023 filings.

Thank you, Biden voters in California, giving the election to Biden.

Hope your gas hits way over $5.00, cost of food goes up 15%, and 2 million migrants that just came in the last year, knocks on your door to use your bathroom. The new 1099 taxes on Ebay sales , gives them food, shelter and money.

Plus Russia was no problem with Trump.

[bbravo65]

@1228sales 

...I think only California is not enough...New York, Washington State, Hawaii, Oregon, Nevada, the D.C, Biden's State, most of "Blue" Sates...and the Dominion machines...oh, and the deaths and illegals...

...funny that someone still bragging about impeach Trump...Trump's derangement symptom...

...btw, gas is already at $5/gal in Barstow, CA...actually it was $5.09 few weeks ago (during Martin Luther King weekend)

...my COLA is up 4%, inflation is already 7% and still keep climbing up...L**'s G* B*****...

...may be the end of the USA is reaching...I love this country and can't stand to see it's being destroyed by its own people...

[khasoh-20]

The truth is you are still legally obligated to pay taxes regardless of if you have exceeded the tax threshold. There are a number of smaller sellers who have chosen to sell their hand-me-down household goods for less than they paid for them, and so would technically not have any net profit from which to pay income tax, but will need to handle a great deal more paperwork at tax time, due to the lack of profits.

Many California eBay sellers find this a big problem due to the following reasons:

• It is likely that there are tens of thousands of California eBay sellers who operate their eBay sales as a business and pay taxes (for instance, I am one of them).
• The second requirement is that when a law-abiding seller of products in California files its return, he or she must provide a list of the 1099 forms he or she has received.
•  Many law-abiding CA sellers, knowing what eBay says about 1099K's, would not expect to receive a 1099K this year and, trusting eBay that they would not receive one, would not seek one out.
• The IRS has a list of all 1099 forms that were sent to a taxpayer ID number. They have machinery that compares that list to the list that the seller of the CA eBay store provides.
• In the event that the lists don't match (because a California eBay seller might not realize that eBay issued them a 1099K), the California eBay seller will be hearing from the IRS shortly.
• To hear back from the IRS about the validity of your return is a big deal to most taxpayers.

[yoonix1]

As I understand everybody will receive Form 1099-K, and above it's shown a snapshot from IRS website explaining the filing thresholds for all states, not just CA. I do not see any problem with EBay sending out the forms.

[pieper9825]

The IRS for above clearly states "For returns for calendar years prior to 2022, Gross Payments that exceed $20,000 AND More than 200 such transactions."  Those are the only people that should have received a 1099K from eBay. Obviously many people received the 1099K that were not supposed to and eBay has acknowledged this issue by sending out emails and posting the message of said issue on seller pages.

[nobody*s_perfect]

AFAIK, California is the only state where eBay totally messed up and sent 1099-K's to sellers who hadn't hit the thresholds.

In addition to the sellers who surpassed the federal thresholds, eBay is required to send out 1099-K's to sellers in states that have passed requirements for lower thresholds. Here's a memo that eBay sent out last year with a list of states with lower thresholds. Most are $600.  And a couple more states have been added since the memo went out.

https://community.ebay.com/t5/Payments/Form-1099-K-Detailed-Report/m-p/31575590#M106915