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.

[divwido]

But when will it be fixed?  It's February 25, and I have no 1099.   I'm already planning on filing an extension just because of this.    eBay, it's been long enough, let's go already.

[dhbookds]

@divwido          you are in Cal.......do you have sales over 20,000/200?  That is the rule for doing taxes this yr for last year...........  if not.......you won't get a 1099.........

[anjofak]

So who is the right person to request proper documentation of tax collected and paid on the sales of our merchandise on here?

And not to forget proper documentation for the costs and loss ?

Probably wouldn't care much but our B&M location sales + all other platforms gotta keep the books correct.  And not in the all gross was net clouds 🙃 

[shipscript]

@anjofak 

Sales tax won't  be on a 1099, but eBay does have a transaction spreadsheet that contains that information, including gross, net, fees, sales tax & state, refunds, etc . If you are using Seller Hub, go here and set the parameters for the report, including the date range:

https://www.ebay.com/sh/fin/report

Seller Hub - payments reports

[anjofak]

Excellent that was much better than the the OCS CANT just can't..

[aundr-81]

dsa

[andrealouisescott]

What if I all ready filed the 1099 for ebay and I shouldn't have? Can I make a modification to my taxes? I got hit with a big bill from IRS.  Ebay is a hobby and I paid close to 5,000 dollars to IRS.  I will stop doing ebay if this is the future.  I've been doing this for a ton of years and worked really hard during COVID.   I did not have notice for 2021 so I could account for all expenses.  It is super discouraging and Ebay will lose customers.  Ebay really hurt its customer base.  I wouldn't have minded had I gotten notice.   I had a hard financial year in some respects and 5000 is a lot most people don't have.

[smithop]

You might want to consider filing an amended return Andrea, $5000 seems like way too much taxes owed.  Did you offset the 1099-k with all your expenses?  Cost of the goods you sold, listing fees, transaction fees, mileage to mail packages, shipping supplies and fees?

The $600 threshold defines a hobby, below that it can be reported as Other Income - Line 21 and taxed as normal income. The brackets are 10%, 12%, 22% ...

Over $600 is a small business, file a Schedule C where you can write off the expenses. Business profit is subject to income tax plus self employment tax - 15.2% for SS and Medicare taxes.

Dave

[al_809342]

Can you tell me what the difference is between the two? I have seen a few posts about 1099-Ks that show twice what the seller actually sold as compared to the 1099-K. I don't know how much eBay actually sends to the government regarding the amount that is shown on the 1099-K. What else have they done wrong if they screw up by sending a 1099-K to someone who was well under the 2021 threshold, then what else have they done wrong? 

However, there seems to be a difference in how they are handling the whole thing, which is not in their favor.

[shipscript]

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@al_809342 wrote:  Can you tell me what the difference is between the two? I have seen a few posts about 1099-Ks that show twice what the seller actually sold as compared to the 1099-K. I don't know how much eBay actually sends to the government regarding the amount that is shown on the 1099-K.

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@al_809342 

The errors where in the initial rollout early in the year. eBay corrected those errors prior to submitting any 1099s to the IRS. Sellers who originally had erroneous statements reported they received corrected statements.  eBay was not obligated to electronically file with the IRS until March 31, so eBay had some time to make it right before actually filing.

Or are you asking the difference between business and hobby?

This is the IRS view of the two:

https://www.irs.gov/newsroom/earning-side-income-is-it-a-hobby-or-a-business

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax...

eBay has partnered with a company called "TaxAct" to provide guidance to sellers who are a bit mystified about their filing status when the new $600 threshold is applied to all who sell in 2022.

https://blog.taxact.com/ebay/

[kh-shakhib]

Hi everyone,

Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.

Thank you for understanding.