eBay

dakarace · ‎03-18-2022

Good day all,

I used to sell fairly often on Ebay but have been away for a while.

Sold two things this year which totaled over the $600 and then Ebay wanted my SS# for taxes. Issued a small refund to the two buyers to get under that threshold but now can't get my money because EB wants my bank account info.

Notes:

* EB rep said that was the only way to get the $

* Can't use it to buy stuff on EB until a May "upgrade"

* Was nice when only 1 website had my banking info (Paypal)

While I fully understand the tax thing is not EB, I am not a fan of the new payout system.

Anyone have any luck getting their funds another way?

Sincerely, Death of a EB seller

monica-sells · ‎03-18-2022

Issuing the refund was a novel idea...

however, government regulations require ebay to issue a 1099-K on the "total amount" processed on your behalf.....

so is you sold 609.00 (total amount) refunded 10.00 (599.00) you 1099-K would still be 609.00

We have seen no other way to get your proceeds except for waiting for your unclaimed money fund to receive the funds in your state

It is not such a big deal updating your account...I don't know why folks make such an issue out of it...

"things change"

mybigsale · ‎03-18-2022

Makes sense what you tried to do. Unfortunately for you, the reporting requirement is for total amount of sales. Even if you gave total refunds to all your buyers, the original sales already happened and will be reported. Amount reported will be amount you made - it will not deduct any refunds, shipping, expenses etc.

When you file your taxes, you can deduct refunds, shipping costs, your original item cost and other expenses from the amount eBay reports (using form Schedule C).

If you do nothing and the IRS eventually tries to collect, they will be taxing the full amount reported.

This is a new Federal Law that all sites you try to sell on will need to follow. Best advice is to get onboard and give eBay the information they need.

dhbookds · ‎03-18-2022

Anyone have any luck getting their funds another way?

No.......except for waiting for them to deposit to the state Unclaimed Money Account and claiming it from that...... Probably takes 6 months or so........and there you will have to give your social security number and presumably it would be reported to the Feds.......

dakarace · ‎03-18-2022

Thanks, my taxes have always been very straight forward so I was trying to avoid complicating them. Worst thing is one of the items was bought last year on EB for more than what I sold it for...

dakarace · ‎03-18-2022

Thank you, worst thing is one of the items was bought last year on EB for more than what I sold it for. My taxes have always been very straight forward so I was trying to avoid complicating them.

luckythewinner · ‎03-18-2022

@dakarace wrote:
Issued a small refund to the two buyers to get under that threshold but now can't get my money

The 1099-K is a gross amount, not a net amount. Refunds do not reduce the amount reported to the IRS.

luckythewinner · ‎03-18-2022

@dakarace wrote:
EB rep said that was the only way to get the $
Anyone have any luck getting their funds another way?

Supposedly you can wait a year and then claim them from your state's "unclaimed property" department. But you may have to give them your banking information too 🙂

@dakarace wrote:
* Can't use it to buy stuff on EB until a May "upgrade"

Correct. Managed payments is currently not a balance account, but supposedly in May they will roll out a balance account option.

mybigsale · ‎03-18-2022

You need details to tabulate your income and expenses - what you report on the Schedule C is mostly total amounts. Small sellers don't need to keep inventory and can claim the costs you paid for your items as an expense. When you file your taxes, you should be able to deduct the amount you paid - so your "Worst thing" should help drop your taxes even more.

Get tax help - when filing deduct the cost of your tax help, refunds, shipping costs, travel costs, original cost of items and other expenses. Keep selling and set up a home office - also deduct that cost. You are going to break even or end up having a loss (which will lower your taxes if you have other income).

Don't assume anything I said about taxes is true - seek "proper" tax advice.

About Schedule C (Form 1040), Profit or Loss from Business (Sole Proprietorship) | Internal Revenue ...

silverstatetreasureboxes · ‎03-18-2022

@dakarace

OK one of the items you bought last year you sold this year for a loss. Print out that invoice from ebay and stick it in a folder for next year filing tax season.

Start now to get your ducks in a row. You need to sign up for managed payments and get everything squared away at ebay first.

Start a folder with this year's 2 sales in it. Keep all receipts of supplies, COGS, shipping etc.

Another poster mentioned deductions for home office. I personally won't touch that and gas and mileage either, those are 2 red flags for the IRS. Your not a big time seller and those deductions get complicated. Now of course those particular deductions work for a major seller who does keep excellent records for his business.

1st thing is get your ebay account squared away, it's not that difficult and it needs to be done now.

Best to you.

dnasilver · ‎03-18-2022

How would a 1099K complicate anything? No different than before for you. You showed your gross profits and wrote off what you could (deductions) and ended up with a possible taxable net income. So how does a piece of paper make anything more complicated?

So, you bought something on eBay and used it for a year. You decided to sell it for less. So that item has zero income and depending on how you claim yourself, you have a potential tax loss to write off against other income.

Really having a difficult time seeing this as making life harder.

dnasilver · ‎03-18-2022

You are right, many sellers on here no longer can use a schedule C and many that still are, will find out they should not have been. The IRS is backed up for two reasons: reduced budget and elimination of people from the last administration. Changes that the last administration made to part time sellers, hobbyists and the likes on what they can legally deduct. Many will be in for a rude awakening when they are told to owe up on unpaid FICA along with the penalties or file correctly since they should not have been using a schedule C.

nobody*s_perfect · ‎03-18-2022

@dnasilver wrote:
How would a 1099K complicate anything? ... Really having a difficult time seeing this as making life harder.

Previously, sellers with a net loss wouldn't have to file at all. This includes a lot of long-time sellers who are just unloading excess used personal and household items.