STATE SALES TAX Is Now Added to our Taxable Gross Income

[rh193]

PAYPAL adds SALES TAX COLLECTED to our Gross Income which we now have to pay Income Taxes on.  eBay does not and WILL NOT provide us with an Invoice for total Tax Collected for 2019 so we have nothing to turn in with our Tax Forms and that makes it very difficult to deduct these Sales Taxes from our Gross Income.  What's even worse is that eBay only keeps those Sales Tax Records for 90 days and deletes them.  There doesn't seem to be anything we Sellers can do about it.

[corvettestainless]

Why would you pay income taxes on this? You simply deduct this with many other items on your Schedule C (business income/expenses) to come up with the proper amount to put in your 'taxable income' on your 1040. 

Run a paypal annual report, although you should be doing it monthly, and you can see the taxes that were collected and then given to ebay (happened only for Nov & Dec of 2019), as well as continuing today which you will run a Jan report to get those figures etc. 

[nuclearomen]

it's not ebay's or PP's responsibility to be your accountant for your business, you should be keeping detailed and accurate records of your transactions and fees from both PP and ebay. They both have told members numerous times that the tax will be included on your 1099 in which you need to deduct that tax from your reported earnings.

[westex80]

True, we are ultimately the responsible party to report our info correct but do wish ebay would make all our income numbers easier to attain. I do have a couple of questions. Maybe there is CPA that is a seller here that can answer these.

Where would you add the sales tax paid expense on the our tax forms? Many people are stating to just deduct it from the gross amount showing on our 1099K from paypal or ebay. I'm afraid that could trigger an audit. I had a CPA tell me a couple of years ago that the IRS computers runs all the forms received from employers etc and matches them to the individual returns checking for errors and omissions. 

[goldxxxsilver]

I got a 1099 this year and claiming about a $20 Tax write off for Nov and Dec.....So far this Year it is Nearly $100. so far... I can only keep track sale by sale...It's a pain....Not paying a Tax on a already Taxed Item...Good Luck to All..😀😀

[mcdougle4248]

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@westex80 wrote:

True, we are ultimately the responsible party to report our info correct but do wish ebay would make all our income numbers easier to attain. I do have a couple of questions. Maybe there is CPA that is a seller here that can answer these.

Where would you add the sales tax paid expense on the our tax forms? Many people are stating to just deduct it from the gross amount showing on our 1099K from paypal or ebay. I'm afraid that could trigger an audit. I had a CPA tell me a couple of years ago that the IRS computers runs all the forms received from employers etc and matches them to the individual returns checking for errors and omissions. 

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I am not a CPA, but I do have my taxes done by a CPA.  I am looking at my 2019 Schedule C, which was completed by my CPA.   Schedule C,  Part II,  line 23 is where the amount of taxes paid was recorded.  

I hope this helps.

[westex80]

Thanks so much for the reply! I will log into my tax software and locate that line. 

[mcdougle4248]

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@westex80 wrote:

Thanks so much for the reply! I will log into my tax software and locate that line. 

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You're welcome!

[budstewart]

I went into PayPal and ran a report for November 2019. There was no line item for Sales Tax. Is PayPal calling that line item something else? By the way-thanks for your help in advance.

[usmediamass]

@rh193 @budstewart @mcdougle4248 @westex80 @goldxxxsilver 

Did ebay tell you that if you take return from a state that collects sales tax on the item and not shipping that they refund the buyer the full sales tax from your paypal account and then issue a partial refund from the ebay sales tax account?

https://community.ebay.com/t5/Shipping-Returns/Refund-discrepancy-Ebay-vs-Paypal/td-p/30657242

[mcdougle4248]

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@usmediamass wrote:

@rh193 @budstewart @mcdougle4248 @westex80 @goldxxxsilver 

Did ebay tell you that if you take return from a state that collects sales tax on the item and not shipping that they refund the buyer the full sales tax from your paypal account and then issue a partial refund from the ebay sales tax account?

https://community.ebay.com/t5/Shipping-Returns/Refund-discrepancy-Ebay-vs-Paypal/td-p/30657242

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First, I am in MP and things are handled a little differently than Paypal.    The taxes collected by eBay never mingle with my funds during processing. 

I don't have any experience with returns.  I do partial refunds for overpayment of shipping charges every now and then.  When I issue a partial refund, the exact amount of the refund is removed from my MP pending funds. 

An example:  A buyer overpays $2.75 on shipping.  I refund $2.75 from my pending funds.  If the buyer paid tax on the shipping charges, it would be on eBay to refund the applicable amount.

[rh193]

Hi.  Thanks.  I didn't know that.  eBay didn't tell us anything about how their State Sales Tax affects us (they have also been collecting Duty/Customs Fees from Australia, which I have found added to my Gross Taxable Income, too).  They never told us that it would be added to our Gross Taxable Income by Paypal.  They didn't tell us that they would NOT provide a Tax Document to turn in with our other Tax Forms to get this Deducted from that Gross Taxable Income.  And they did not tell us that they only keep State Sales Tax Records on file (via their downloadable Spread Sheet) for only 90 days--then they delete it.  They never took the Sellers into consideration at all. 

[iart]

I agree with the OP that this is going to be a mess. eBay surely has the number available, the amount of taxes paid. Or they could have set it up so they had it.

Keeping track of every nickel and dime paid in taxes for 40 sales a week is a tremendous time waster.  We'd rather spend that time listing, packing and shipping.

[oldguy59]

The way I decided to do when printing label off Keep the tracking number part with description and on backside of it write how much tax was  collected and Highlight with a marker.Jan 1 turn them over and add them up and deuct from 1099k gross

[mcdougle4248]

*********General Reply*********

@mr_lincoln created a detailed guide to creating a Paypal date range programmable CSV formatted database that  may be helpful.

The thread can be found here  https://community.ebay.com/t5/Selling/PayPal-s-date-range-programmable-CSV-formatted-database/m-p/30...