EBAY 1099-K & Tax Filing Question

[exoticatropicals]

Just got my 1099-K in the mail from Ebay.

It's confusing.   There is a gross total on line 1a of "all payment transactions"

and then a breakdown of each month going from August 2020 to Dec 2020 (I started Managed Payment in Aug 2020)

Those months, added up, do match the gross total amount on line 1a..

However, the problem is- I'm not sure if that gross amount on line 1a includes: the sales tax ebay collected, and/or the "selling costs" that ebay takes (this includes ebay fees and shipping costs)

Now I was HOPING that I could use these reports to figure that out: 

https://www.ebay.com/sh/performance/sales 

However, when you go month by month, the totals shown in the reports do NOT match what Ebay is showing for each month on the 1099k.

So now I'm completely lost.

I need to know if the sales tax Ebay collected is IN the 1099-k gross amount for 2020 (line 1a) or not..

I also need to know if the "Selling fees" ebay deducted from my payments are IN the 1099-k gross amount for 2020 (line 1a) or not..

Anyone know for sure?

Or perhaps an Ebay representative can clue us in on this?  It's very important to know when filing our taxes.

[slippinjimmy]

eBay collected sales tax is NOT included in the 1099 Gross amount.

The amount showing on the 1099 includes the gross amount paid by the buyer for the Item, Shipping & Seller collected Sales Tax (if any).

It does not include eBay collected Sales Tax and there is no adjustment for full or partial refunds (shipping refunds, returns etc.). You will need to deduct refunds and returns on the Schedule C.

The only difference from PayPal is the eBay collected Sales Tax which is included in a PayPal 1099 but not included for the eBay 1099.

[coastaltechsolution]

I hope you were not expecting 1099-K to be the only tax records you needed and that you were keeping your own records? 

[exoticatropicals]

Thanks Slippinjimmy-

so going back the past years, when all i got was a 1099 from Paypal, and Ebay had been collecting sales tax for (some) transactions..

that sales tax was included in the gross amount of my paypal 1099?

Yikes, I never thought of that, and had never deducted it in past years.

But since Paypal 1099's won't really be an issue for me going forward, and you are saying that Ebay does NOT included that sales tax in the gross amount on the Ebay 1099, than I won't need to worry about deducting the sales tax collected from the Ebay 1099 gross.

Does that sound correct?

So what I'm seeing on the Ebay 1099 is:

Gross Ebay sales (does not include the sales tax collected by Ebay)

which DOES include:  Ebay fees and Shipping fees.

So Ebay fees and Shipping fees that ebay takes from my managed payments should be DEDUCTED as an expense on my taxes.

Sound correct?

I still can't get any of the Ebay 1099k monthly numbers to line up with what these Ebay reports are showing me:

https://www.ebay.com/sh/performance/sales

Does Ebay have a tax reporting tool that we can use now that is in line with their 1099k numbers?

[sammystormann]

How do you get a 1099?  Thanks

[coastaltechsolution]

1099K is just a reporting tool and will most likely never line up with your numbers.

How is eBay supposed to know what you paid for resale merchandise?

I hope you kept records of purchases and sales and tax plus business expenses 

[exoticatropicals]

Coastal:  I'm talking about it lining up with Ebay's own sales reports. Check the link I posted above.

Those numbers and the 1099k numbers should line up.  Especially considering they are all coming from Ebay.

What one originally paid for an item has nothing to do with this.  This is actual sales numbers- as reported by Ebay's own report page and the sales numbers as reported by Ebay on the 1099k.

sammystormann - Ebay sent the 1099k to me in the mail.  Which in itself, is a bit odd...

Ebay really needs a good END OF YEAR REPORT like Amazon has.

Does anyone know if this is available now?  It should be.

It is annoying to have to run reports in 90-day chunks because Ebay's report page can't handle a whole year lol.

What's even more annoying is that those numbers are different than what they are reporting on the 1099k.

[coastaltechsolution]

What I'm saying is you will most likely never get the 1099K to "Line Up" 

That is why I asked if you had been keeping records. 

oh well good luck and seek a good CPA if you think you need it 

[exoticatropicals]

Ebay should have an End of Year Report available since they have now forced us all into their managed payments system.

and yes, the much-needed simple End of Year Report should *match* the 1099k numbers.. to the penny.

They are supposed to be the exact same figures.

Amazon does this perfectly.  Why can't Ebay?

[caldreamer]

1099 gets sent to you and the IRS when you GROSS SALES reach certain dollar amount.

1099 (gross sales) includes TOTAL SALES + SHIPPING CHARGES 

Sales tax is NOT included in GROSS SALES (that is not income and that does not go in your bank account).   EBAY forwards Sales Tax money directly to the STATE.

Business taxes can be very complicated (good to use CPA at least the first year until you have a good understanding of what is required).

Basically you list "gross sales" as income (then you substract deductions:  shipping charges, EBAY fees, cost of boxes, mileage, costs of goods, home office deductions (if you store merchandise in your home or have home office).    Any expense related to your business is deduction.   A good CPA will help you find every legal deduction and is worth every penny!

CPA can explain what spreadsheets you should create so you have good records to backup every deduction that you are claiming in case of audit.   

[mam98031]

---

@exoticatropicals wrote:

Thanks Slippinjimmy-

so going back the past years, when all i got was a 1099 from Paypal, and Ebay had been collecting sales tax for (some) transactions..

that sales tax was included in the gross amount of my paypal 1099?

Yikes, I never thought of that, and had never deducted it in past years.

But since Paypal 1099's won't really be an issue for me going forward, and you are saying that Ebay does NOT included that sales tax in the gross amount on the Ebay 1099, than I won't need to worry about deducting the sales tax collected from the Ebay 1099 gross.

Does that sound correct?

So what I'm seeing on the Ebay 1099 is:

Gross Ebay sales (does not include the sales tax collected by Ebay)

which DOES include:  Ebay fees and Shipping fees.

So Ebay fees and Shipping fees that ebay takes from my managed payments should be DEDUCTED as an expense on my taxes.

Sound correct?

I still can't get any of the Ebay 1099k monthly numbers to line up with what these Ebay reports are showing me:

https://www.ebay.com/sh/performance/sales

Does Ebay have a tax reporting tool that we can use now that is in line with their 1099k numbers?

---

OMG you have an issue.  1099Ks report Gross RECEIPTS.  That is NOT gross sales or income.  

The difference between the Ebay 1099 and the PP 1099 is just the sales tax collected by Ebay.  On the Ebay 1099 as @slippinjimmy stated they do NOT include the sales tax collected by Ebay, but the PP 1099 does.  Ebay is wrong and I tried very hard to convince them of the issue but clearly I was ignored.

Now you need to know that Gross Receipts means that they have ALL the money coming into your account from your customers included in that number.  Gross Receipts does NOT have any refunds, shipping costs, sales tax paid or anything else deducted from it.  All of that stuff you need to deduct to arrive at your correct number to claim income.

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

[mam98031]

---

@coastaltechsolution wrote:

What I'm saying is you will most likely never get the 1099K to "Line Up" 

That is why I asked if you had been keeping records. 

oh well good luck and seek a good CPA if you think you need it 

---

You should be able to if your records and available reports are reconciled.

PP's reports are far better than Ebay's and you should be able to reconcile the numbers within reason.

Ebay's reports need a little more work but it is doable.

[dimes01eb]

More than 1 report available, one is under payments tab, one is on orders > all orders page (R/H side)

It took both for me to get enough tax info for tax guy, one allows you back only 90 days & the other you can have wide date range.

You'll find net & gross on one & if you split by the month, it should match 1099 on gross

Hope this helps some !!

[nwtradepost]

Either way, you will be disappointed. Regardless of what anyone says. Here are some fun facts. I do my own account, business rules, software development, etc.

Paypal numbers perfectly match: income =  paypal reports = what paypal report to the irs. They have always been flawless for the all the years I have used paypal.

Ebay AND Amazon are both inaccurate. Amazon is has been an obvious mess for the entire time I have used them, there reporting never matches, even in their own systems. eBay on the other hand I expected to be better then Amazon, and actually I imagined they would be as least as good as paypal.

Amazon: incomes DO NOT = their own reports and also DO NOT = what they report to the irs.

eBay: incomes DO = reports, but do NOT = what they reported to the IRS. No possible way. 

My advice, keep accurate records throughout the year, compare with monthly reports downloaded from the marketplaces, compare your reports with marketplace reports, compare all reports to 1099k. With Amazon, each week/day you are certain to see when they account for sales on the WRONG DATES at least 20% of the time, they are complete disaster and their entire system is complete useless in my opinion. Even though their API will give the sales on the correct dates. Ebay, at least their reports will match the actual account period in which the sales should be accounted for, but for sure to 1099ks are not accurate at all, not a single month, no matter how you run the math. 

Wrap up:

--PayPay, who has been doing this the longest, has it down perfect.

--Amazon will never get it right, they don't need to since the world seems to have voted that a less then mediocre service should be number 1.  I will be reporting to the IRS MY numbers since I am confident that they are true and accurate. Note: I can fully prove to the IRS if I am audited that Amazons reports are flawed, not in the correct accounting periods, and flat out inaccurate.

--eBay, have faith that they will get it figured out, but this I will be reporting to the IRS MY numbers since I am confident that they are true and accurate. Note: I can fully prove to the IRS if I am audited that eBay reports are flawed, not in the correct accounting periods, and flat out inaccurate. 

They are only off by less then 1%, but math is math is math is math. Its that simple. Wrong is wrong. Inaccurate is inaccurate, even if its a penny. (IRS DOESN'T CARE ABOUT PENNIES THOUGH SO ITS FINE TO BE OFF BY A BUCK, but its not fine to have unreliable reports to those who are reporting our supposed income to the government inaccurately.

Please do not reply, as I turned notifications off for these boards many years ago, they are no place to find help. They are as bad as the public amazon questions/answers sections. You will only be left more frustrated and confused, and that is if you get luck enough to have some "MOD" edit your post without letting everyone know that they cut half of your message out leaving it so it makes no sense, which trust me happens often and will make you want to smash your PC and quit eBay.

Unfortunately, the "ask the community" section is no place to get ask a question or expect a good answer.  I am just doing my taxes today and realizing now, there is absolutely no way these reports are accurate.

See ya!

[nwtradepost]

FORGOT TO MENTION! Both eBay and Amazon over reported to the IRS. They either underpaid me, and didnt show this in their own reports given to me, or they over-reported to the IRS.  My real concern is that if the numbers they reported to the IRS are higher then what they are showing me in my reports which are now in sync with their reports, then it seems they are not paying me for some sales but not reflecting this in any reports in which case they did not pay me what they are saying they are paying me. 

I suspect it is an issue with their accounting/reporting dating. Example, they close their books according to a timezone inconsistent with the timezone they generate the reports they give to me, resulting in some sales showing up the next day, which would lead to them showing up in the next month, which would lead to sales being reported on the 1-1-2021 instead of 12-31-2020. I know for fact this is the issue with Amazon, which is why I suspect it is the issue with eBay.

In my opinion, I think ALL reporting should be handled with Universal stamping so it remains consistent 100% of the time, but it does not appear that's what they are currently doing.

I knew Amazon was going to be off, since as I mentioned they "account" for sales whenever they feel like they should and not when they actually occur, or even on the day their reports say it occurred. I personally refuse to alter my perfect records of my earning to match there false reports, so will report the earnings in the way the Amazon SHOULD be reporting, and will do the same for eBay.

Like I said, all of the reports I keep for eBay, 100% match the reports I download from eBay. So there is no reason the same reports should not match the numbers eBay has reported the IRS. Only off by less then 1%, but still inaccurate and not consistent with their own reports.

HAPPY 2021!