Taxes

[fabfantasticfinds]

On the 1099 many of us will receive. What are we taxed on ?  Total sales or funds sent back to our bank accounts ?

[kensgiftshop]

Total funds received, minus sales tax.

[buyselljack2016]

Taxed on the $$ earned as a profit after you take the available deductions (if you qualify for deductions)

I do mileage. Packaging supplies. Square footage used................. etc.

eta:  shipping label costs, COG

[luckythewinner]

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@fabfantasticfinds wrote:

On the 1099 many of us will receive. What are we taxed on ?  Total sales or funds sent back to our bank accounts ?

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The 1099-K is an informational form and it does not tell you "what you are taxed on". It simply reports the gross amount of payments processed on your behalf.

You are taxed on your taxable income, and that is determined by filling out your tax return. 

[fabfantasticfinds]

SO, the 1099 total reported to the IRS will be funds returned ?

[nobody*s_perfect]

The total on your 1099-K will be the total funds that buyers paid for item, shipping and handling. Sales tax is not included.  eBay does not deduct anything such as eBay fees, returns, or postage.  All of those are deductions when you file your tax return.

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

[wastingtime101]

Deadline for eBay to release 1099-K forms is Jan 31st each year. They will be posted on your payments section here:
https://www.ebay.com/sh/fin/taxforms

Rundown on eBay 1099-Ks:
https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

You can go to this page and generate a CSV report and you'll see what's counted on your 1099-K at the transaction level.  https://www.ebay.com/sh/fin/taxdetails

"Your 1099-K Details report shows all the orders that factored into your gross amount of payments. The report also provides other details, such as transaction fees, which may be relevant when preparing your taxes."

There's a guide published here where you can further drill down and get reports for expenses and refunds: https://www.ebay.com/mes/taxguide?sh=true

[luckythewinner]

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@fabfantasticfinds wrote:

SO, the 1099 total reported to the IRS will be funds returned ?

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No, it is the gross total of payments processed by Managed Payments (less sales tax). eBay has a whole page that explains "what is included on the 1099-K". 

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

[monroe67]

"SO, the 1099 total reported to the IRS will be funds returned ?"

No, not exactly.  On the Forms 1099-K issued to sellers by eBay, the total amount reported to the IRS will include  any funds the seller(s) may have paid out as refunds.  

I highly recommend you click on the link included in Message 6 above from nobody*s_perfect.   It spells out eBay's positions, policies, and procedures on Form 1099-K.  

Here are two paragraphs from that linked info about What Is Included in Form 1099-K:  

[Begin Quote:]

"What's included in Form 1099-K

Form 1099-K is an IRS information return that includes the gross amount of all reportable payments within a calendar year. This is based on when gross funds are processed to eBay, not necessarily when funds are received by sellers. This amount does not include any adjustments, for example, credits, discounts, fees, refunds, or any other adjustable amounts. However, sales tax and canceled transactions are excluded from the gross amount reported. You should check with your tax advisor to decide how best to use the information on your Form 1099-K when filing your personal and/or business income tax return.

You can contact us  with any questions about your Form 1099-K. Make sure to have the item number and transaction details ready. You should contact us with any concerns about your Form 1099-K no later than March 30th of any year. This will ensure eBay has time to review your claim and make any needed corrections by April 15th of the same year."

[End Quote.]

[caldreamer]

You are taxed on total sale (purchase price + shipping income).    If you file your income tax as a "business" you can deduct all your expenses (EBAY fees, returned merchandise, shipping expense, cost of goods, mileage, packing materials, office supplies).   Anything used for your business is taxable deductible.   You only pay income tax on "net amount" after you deduct all the expenses.

EBAY has an "easy to read" 1-page report that shows YTD totals for (orders, EBAY fees, refunds, shipping expense).  This will be very helpful when tax time rolls around.

GROSS SALES (as shown on report)
-EBAY fees

-Refunded sale

- Shipping expense (cost of print labels)

-Other expense (cost of goods, packing material, mileage, office supplies)

NET INCOME

[monica-sells]

If this is what you are asking.....

The 1099-K will NOT equal your "Payout" (funds sent to your bank)

The 1099-K will be a higher dollar amount