How is everyone handling 1099-K forms on taxes?

[milkyway10024]

Hi: I hope this question is allowed. I'm doing my taxes myself and trying to figure out where to report the money I earned from eBay last year on the tax forms. I made roughly $4,000, give or take, but that's gross. It looks like IRS Schedule C but that's asking about business name and several other questions that don't apply. I don't have a business per se -- I just sell books and a few other things.  I also don't see a line on Schedule C for subtracting the cut that eBay takes. Thank you! Is there a simpler still-legal way to report it?  

[mam98031]

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@dbfolks166mt wrote:

I simply disagree.  For me, Cash accounting is extremely easy.  There are options so that each person can pick what is best for them.  I picked mine, years ago and am completely satisfied with it.

     There are pro's and con's to the different types of accounting and either works fine as long as the individual is consistent and fully understands the processes and applies it correctly. 

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I NEVER said there wasn't.  Why you feel the need to call this out, IDK.

[mam98031]

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@milkyway10024 wrote:

I'm the OP. Sincere thank you to everyone who has replied to this post. Your comments are all very helpful and appreciated and I also appreciate the suggestions and links.  It sounds like I should take another look at the Turbo Tax (or H&R Block) website and see about choosing one of their options to get some assistance, not only with this form but the rest of the taxes. I looked before but found the TT website confusing as I couldn't figure out the difference between the various versions to get. 

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We have used Turbo tax for Business.  Which by the way the cost of the program is also a business expense.  For us it works very well.  It is mostly a series of questions that you answer and the program fills in the reports.

I've heard good things about H& R block as well.  

Doing more research is a good thing.  We are all much better off when we make INFORMED decisions.

[dbfolks166mt]

@dbfolks166mt wrote:

I simply disagree.  For me, Cash accounting is extremely easy.  There are options so that each person can pick what is best for them.  I picked mine, years ago and am completely satisfied with it.

     There are pro's and con's to the different types of accounting and either works fine as long as the individual is consistent and fully understands the processes and applies it correctly. 

I NEVER said there wasn't.  Why you feel the need to call this out, IDK.

      Because it is one of the more important aspects for sellers using the Schedule C for the first time. When I used to do tax preparation I had a LOT of customers that thought they understood what cash accounting and accrual accounting were and the differences between them. I would guess about 50% of those filers believed they were using cash accounting but were actually using accrual. 

     The nuances of both types are particularly relevant at the end of the calendar year with regards to whether revenues and expenses are included in the current tax year filing or pushed into the next year. 

[mam98031]

OK, Still my post didn't say all that nor was it meant to.  I simply gave some different types of accounting.  Nothing more.  You seem to need to make what I said more than was intended for some reason.

It is fine if you want to provide everyone more information.  That is always a good thing.  But my post never said nor was it intended to say what you want to clarify regarding my post.  I said NOTHING about pros or cons.  All I did was list some accounting methods.  Oh I said if anyone needed further clarification / definition on the types of account, just ask.

So feel free to offer up any information you feel is important.  However please don't attribute it to something I did not say.

So just to complete this conversation.  Here is what the IRS recognizes regarding accounting methods.

Accounting Methods

An accounting method is a set of rules used to determine when and how income and expenses are reported on your tax return. Your accounting method includes not only your overall method of accounting, but also the accounting treatment you use for any material item.

You choose an accounting method when you file your first tax return. If you later want to change your accounting method, you must generally get IRS approval. See Change in Accounting Method, later.

No single accounting method is required of all taxpayers. You must use a system that clearly reflects your income and expenses and you must maintain records that will enable you to file a correct return. In addition to your permanent accounting books, you must keep any other records necessary to support the entries on your books and tax returns.

You must use the same accounting method from year to year. An accounting method clearly reflects income only if all items of gross income and expenses are treated the same from year to year.

If you do not regularly use an accounting method that clearly reflects your income, your income will be refigured under the method that, in the opinion of the IRS, does clearly reflect income.

Methods you can use.  Generally, you can figure your taxable income under any of the following accounting methods.

• Cash method.

• Accrual method.

• Special methods of accounting for certain items of income and expenses.

• A hybrid method which combines elements of two or more of the above accounting methods.

https://www.irs.gov/publications/p538