Tax filing. Sales totals do not match

[dy60609]

OK, here it is again. Time to be thinking about taxes.

I have a poser. Why do these #'s not match?

Sellers Hub--- Review your sales  (# shown at the top)  and the amount shown when

doing a "report"  of the  Financial overview (# shown at the bottom) do not agree.

I looked at some other threads, but did not see anything that would explain the difference on mine.

Here I have an amount that creates over $60 difference just in tax payment alone, and may also come into play $ wise with the "self employ" numbers. I may need to do a 2021 amended return as the bigger # would have been used for that. I don't think the lower # report was available in '21.

Selling ended early enough in Dec '21 so that there were no prior year "carry overs" into '22, and ended soon enough in Dec '22 so that were no "left overs" going into '23. All #'s shown should reflect '22 info.

It's not refunds, as they do not match that amount. Refunds are not taken out of the top #, and I would not expect them to be removed from the bottom # either. (refunds $'s was greater than difference)

It's not sales tax. It does not match that amount. Sales tax paid by the buyer is included in the top #. I would expect it to also be in the bottom #. ( sales tax $'s was greater than difference)

I am not in 1099-K territory, so can not compare my #'s there.

What is not included in that bottom # that makes it $354.87 less?

 

[dy60609]

Yup, I can just add it all up, but in the final analysis unfortunately the "eBay" #'s are going to be the ones that count.  I'm not expecting eBay to do my accounting for me. I have ledgers/receipts. Just seems like there should be a simple answer as to why those figures "provided by eBay" do not match each other. 

As posted, no 1099 this year (or any other year) , but I want my ducks in a row if by chance I am one of the "few" that ever end up in an "audit" situation.

I would of course be more than happy to use the lower amount, but I expect that the IRS is more inclined to use the #'s provided by eBay.

Last year (2021 filing), as it was what was available,  the upper # was used.  Now this new "reports" is available with conflicting info.

[luckythewinner]

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@dy60609 wrote:

Yup, I can just add it all up, but in the final analysis unfortunately the "eBay" #'s are going to be the ones that count. 

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Not sure I follow.

The raw transaction report is the very definition of "eBay's numbers" and it contains the only numbers that count.

[dy60609]

"It's not sales tax. It does not match that amount. Sales tax paid by the buyer is included in the top #. I would expect it to also be in the bottom #. ( sales tax $'s was greater than difference)"

"(The difference is only about 40% of the amount of sales tax that the buyers paid.)"

[monica-sells]

"...As posted, no 1099 this year (or any other year) , but I want my ducks in a row if by chance I am one of the "few" that ever end up in an "audit" situation..."

My musings on this statement (having been the lucky recipient of multiple small business audits)

"...I would of course be more than happy to use the lower amount, but I expect that the IRS is more inclined to use the #'s provided by eBay..."

The IRS will audit 1 thing when they visit you. DEPOSITS...

you will be required to produce your bank statements.....

they will total the deposits....(if you have a 'dedicated checking account it will be strictly ebay payouts)

the 1099-K number will of course be much higher than the 'payout' number.....

they are not as Much concerned about how the top number (1099-K) got whittled down to the payout number...they are only interested in the $cash$ that went into YOUR account.......

which is why I "reverse engineer" my ebay sales from the payout numbers that hit the account (to verify numbers)....

Instead of taking the top number and, in a complete effort of futility, try to deduct and balance the fees/shipping/ adjustments, etc....I start with the payout and work upwards.....

(kind of like a verification process)

Why? because I truly believe that an auditor would rely on or believe the bank statement before they believe the ebay statements.....bottom line is, all that matters is the money deposited in your account

.......

ask yourself this....would an agent believe an ebay statement that you were sent 1000.00, or would they believe the bank statement that ebay sent you 900.00?

[dy60609]

The only #'s that will count when the day comes are likely to be the #'s provided by eBay on a  1099.

I just want to know what is going on.

[luckythewinner]

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@dy60609 wrote:

The only #'s that will count when the day comes are likely to be the #'s provided by eBay on a  1099.

I just want to know what is going on.

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Your transaction totals matter whether you get a 1099-K or not.

[dy60609]

OK.

Thanks for all the input. #'s here, #'s there.

I have found the difference, but I do not know why it shows as it does.

What finally came right out to the penny, but to my feeble mind make no sense is:

Sales tax collected/remitted by eBay $871.84

                             Refunds made by me     $516.97   (buyer cost item + shipping)?

                                              Difference of     $354.87

So, @caldreamer  did indeed point me in the direction of the difference as in no sales  "sales tax" in the bottom #.   But refunds figured into that difference in eBay's computing for that entry befuddled me.

I know the 1099-K does not include sales tax, but I also know that it does not include an adjustment for refunds, so it would seem that eBay will not show either that top # (including everything), nor the bottom # (adjusted for sales tax/refunds) as the 1099-K amount when I finally qualify.

I will be good using the top #. Subtracting the "sales tax", and subtraction the "refunds".

In essence the "report" just threw a monkey wrench into my though process.  My "schedule C" entries should be just fine with the top #. (adjusted properly with appropriate line entry).

Much ado about nothing.

[dy60609]

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@luckythewinner wrote:

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@dy60609 wrote:

The only #'s that will count when the day comes are likely to be the #'s provided by eBay on a  1099.

I just want to know what is going on.

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Your transaction totals matter whether you get a 1099-K or not.

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Not sure what you mean by that. 

Is the IRS going to go by what I say rather than what eBay shows?

[monica-sells]

"...Is the IRS going to go by what I say rather than what eBay shows?..."

yes... if your numbers can be substantiated by bank statements....

[luckythewinner]

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@dy60609 wrote:

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@luckythewinner wrote:

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@dy60609 wrote:

The only #'s that will count when the day comes are likely to be the #'s provided by eBay on a  1099.

I just want to know what is going on.

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Your transaction totals matter whether you get a 1099-K or not.

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Not sure what you mean by that. 

Is the IRS going to go by what I say rather than what eBay shows?

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They are going to go by the transaction detail that eBay shows, and you will show them the source report you got from eBay.

That is not "what you say". That is the very definition of "what eBay says" because you got the numbers from eBay.

If you get audited, you show them the report you generated and if necessary show them how you generated it.

[anicept]

I've been thinking about this....is there a way to gather info about shipping a seller pays ("free" shipping) or is it included in Ebay's totals.  I'm also having trouble reconciling my "payout" total for 2022 to the W-2.  There should be a way to take their top number, offset it with details and arrive at a number close to the payout total, correct?

[dy60609]

Well, here I am back at it. As it has been marked having a solution I'm not sure if anyone will revisit this thread, but I'm going to continue here rather than start a new thread.

I marked solution because I was directed to #'s that zeroed out the math, but what is displayed makes no sense to me. Perhaps someone can explain the logic for what eBay is showing. I will use my Feb #'s.

Here we go.  eBay shows my sales with tax included. eBay shows the amount of tax collected.

 $448.89         total sales

  -      28.39       - sales tax

     $420.50        My sales with the tax subtracted

OK, pretty simple. Now we go look at my Financial overview. Should be my sales minus the sales tax. 

 But wait, the #'s don't match. There's a monkey in the mix. A refund was made to a buyer.

How did my "sales" with sales tax subtracted go from $420.50 to $424.00 in my orders?

Instead of subtracting, or leaving it as it was, eBay has added that amount to my "sales minus sales tax #'s"

I did not receive another $3.50, I refunded that $3.50

They are adding  every refund given to the buyer onto my sales totals exactly as the did with the #'s displayed in my original post.

If I subtract the $3.50 that they show there from the $424.00 it take me back to the original (sales minus sales tax ) $420.50, but I have to again subtract $3.50 to get to my true sales.  This report seems to be pointless, and wrong.

What am I missing here?  What is the logic in these #'s being done that way?