Question about this 1099-K thing?

[cookie64]

I had to give ebay my SSN to continue getting paid. They said they are sending me some form. Do I have to fill out some form now and send it back before I can get my payments again?

And it says the form requires me to write all the income I made from sales and I will not have to pay tax on something I sold for less than what I paid for it. How am I suppose to know how much I originally paid for things I sold when I bought them YEARS ago, have no idea how much I originally paid for them and have no recipt/record for them?

[mr_lincoln]

Hi @cookie64 ,

You might want to read what you got again from eBay ... they have nothing to do with what you did or did not pay for your items UNLESS they are asking for Receipts which can happen sometimes on high value - high risk items ... below is a helpful link for eBay and them issuing the 1099-K form for sales ... for this year, any gross transactions (less sales tax) gets reported to the IRS ...

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794&st=12&pos=1&query=eB...

Mr. L

[caldreamer]

1099 is sent to you and the IRS (shows gross income from your EBAY sales).   You must report gross amount (shown on 1099) form on your income taxes.

Suggest you consult with CPA on how to file business taxes.

[dbfolks166mt]

     You must be selling from a different account I don't see any sales on this one, nor is there any feedback. I am not sure how eBay contacted you but I am hoping it was actually eBay. I am surprised it is taking them this long to make the request. I have no idea what state you are in or  what your sales volume was in 2021 but depending on those factors it is possible you should have gotten a 1099 for your 2021 sales. 

     You should not have to write down all the income you made from sales eBay already has that information. What you will have to do is claim the revenue on your income taxes regardless of whether you made a profit from the sales or you incurred a loss. If you incurred a loss it may benefit you as it can potentially reduce your tax liability on other revenue/income. Best idea is to talk with a tax professional. 

     If you sell over $600 in merchandise in 2022 you will for sure receive a 1099. That revenue will include the price of the item + any shipping cost the buyer paid in addition to what they paid for the item. The amount on the 1099 will be the gross revenue and is offset/reduced by subtracting all costs associate with the sale of the item. This would include the eBay fees, actual shipping cost, COGS, packing materials, paper, ink, bubble wrap, POV mileage, refunds, etc. As stated before a tax professional can help you with this but I strongly suggest you start keeping your own records. 

[cookie64]

I sell on a different account.

The thing is I am confused. What do I do with the form? Do I need to do anything else to continue selling and getting payments?

I just started selling again recently and hit the $600 point. I could not sell for most of 2021 because of the managed payment thing and I only got a bank account this past February.

I never did any income tax thing before. I never had a job. I am selling old collectables related to my hobby so I can earn more money to buy new collectables. Most of these items I bought like 15-20+ years ago, have no idea where I originally bought them from or how much I paid. Whatever credit/debit card or paypal account I used back then I definitely do not have now. A lot of my purchases back then where probably paid with cash/MO. I have never kept any recipts or records of what I buy because it never occurred to me that I would need such things in the future.

[slippinjimmy]

You have never filed an Income Tax return? How old are you?

[dryophelia]

I’m also wondering, if they never did the ‘income tax thing’, where did they get the money to buy collectables? 

[wrong66]

You might want to confirm that such a strange request actually came from eBay and not someone who would really like your SSN.

[monroe67]

"I’m also wondering, if they never did the ‘income tax thing’, where did they get the money to buy collectables? "

Birthday presents from the aunts, uncles, and grandparents.  Bar Mitzvah money.  Confirmation money.  Sweet Sixteen money.  Graduation money.  

[nobody*s_perfect]

They mentioned "Most of these items I bought like 15-20+ years ago..." so old enough to have a spouse. Or a trust fund?

[chapeau-noir]

Start here:  1099-K form.

[dbfolks166mt]

     There may be more than one issue here but there is not enough information to tell regarding your particular situation. I never got a separate "form" when I was converted to MP I supplied my SSN and setup everything related to the bank account when I moved to managed payments a couple of years ago. Once eBay validated and verified the micro deposits and the connection to the bank account everything functioned as it should with regards to payouts. 

     Since I have no idea what was in the form or what information eBay is asking for other than your paraphrasing of it's content and you sell for a different account it could be possible that your payments are on hold simply because you are being treated as a new seller and eBay often has protracted timelines for the payouts to new sellers of up to 30 days. When did you successfully get setup under MP? Had you been receiving payouts once you were setup in MP? How long have your payments been on hold? 

     You need to do whatever eBay told you to do with regards to completing the form and work with them to ensure your account is setup correctly. You can worry about the tax implications after 1 January of 2023 but it would behoove you to talk to a tax professional about your personal situation well before that date rolls around.