Which shipping cost to use as deduction?

[masha67]

Hello, There are 2 shipping costs involved in all selling transactions on ebay. One - when the buyer pays the shipping based on the weight and location they have in the system. I as a seller input the weight of the item. Then after the payment from the buyer is processed I go to print the label on ebay and I as a seller get a discount, so the another shipping cost now comes into play. Now we have 2 shipping costs. And one of these shipping costs will be reported by ebay as part of the gross income on form 1099k

SO my question is - what shipping costs should I use as a deduction for my annual reporting - First one - original buyers payment or the discounted shipping cost I get when I print the label to to ship to the buyer? Thanks a lot for your advice.

[slippinjimmy]

Shipping that the buyer pays to you is revenue, shipping you pay to the carrier is an expense.

You deduct an expense from your gross revenue to come up with your net revenue.

[onefootflipper]

You basically always use actual amount you paid for any expense in your bookkeeping, except in the case of depreciated value old personal items, there are several ways to handle those.

[masha67]

But I thought the Ebay reports the original gross on total of any transaction, meaning that Ebay will report the original shipping buyer paid which is larger than I have at the end. SO will Ebay report shipping 2 times? If the larger shipping is reported, why do I have to deduct a smaller shipping?

[inhawaii]

The amount that the customer paid you = Income.

The amount you paid for the shipping label = Deduction.

[mtgraves7984]

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@masha67 wrote:

But I thought the Ebay reports the original gross on total of any transaction, meaning that Ebay will report the original shipping buyer paid which is larger than I have at the end. SO will Ebay report shipping 2 times? If the larger shipping is reported, why do I have to deduct a smaller shipping?

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@masha67 

eBay will report the gross transaction... Item + shipping you charged. You deduct the actual shipping charge.
If your shipping charge was less than the buyer paid you, the difference is profit. 

[nobody*s_perfect]

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@masha67 wrote:

... If the larger shipping is reported, why do I have to deduct a smaller shipping?

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Because the difference is money that stays in your pocket.

Yes, on the 1099-K eBay reports the buyer's total payment including item price, shipping and handling.

Your deduction is whatever you actually spent on postage, packaging printer ink, etc.

Those two numbers will rarely be the same. One is income, the other is expenses.  eBay doesn't report shipping 2 times.  They report your income on the 1099-K.

The difference between what the buyer pays and what you spend on postage might be small, it might be large; it might even be negative (if you charge the buyer less than you actual cost for postage etc.).

[ms.rodriguez*]

The entire payment (minus whatever sales tax the buyer paid) is reported as income.  If you use ebay shipping, you should be able to see the total of all of your shipping costs.   You do the math.  Whatever you paid in total shipping , you deduct from the total of the amount that you received.   Remember, you then deduct the total of your ebay fees.  Then if you deduct your other expenses ( cost of item, cost of boxes, shipping supplies, etc.) .   Whatever is left is your profit.    You should be able to see your ebay fees and ebay shipping fees in MY EBAY.  Use a computer to view instead of your phone to make it easier.