Yet Another Tax Inquiry - No 1099-K

[wanderingwolfdog]

I turned my hobby sales into a side business this year, and want to file my taxes properly despite the postponement from the IRS. This year, eBay is not sending me a 1099-K because I didn't meet the $20k/200 transaction reporting threshold, so I am on my own for reporting.

I have kept my own books from day one of this year, albeit it primitively (in notepad) as I have no proficiency with spreadsheets. I checked my gross/net figures and shipping costs against the results under Performance after each sale, and still do. eBay has handled all payment processing and all shipping labels for the entire year with no exceptions.

Here's my issue: eBay shows two different summary / yearly totals for 2023 depending on where I get the report on my seller hub/dashboard.

If I use the "last year" function under the "performance" tab, the resultant gross and net income, as well as yearly total shipping label costs, etc, matches my personal records for the year.

However, if I use the "reports" function under the "payments" tab, the yearly summary is different on all parameters. The difference isn't large, but it's there.

Why would eBay show me two different yearly summary totals on two different pages?

At this point the actual Schedule C seems fairly simple, I will be using tax prep software. But the fact that I have different numbers on my "performance" summary for the year and my "payments" summary for the year makes me question which one I should use.

If I had an actual tax prep question I would likely take it to a CPA, but this isn't a tax question- it's an eBay / site question.

Is the yearly summary report under the "performance" tab an accurate thing to check my personal records against? And can anyone tell me why the "payments" tab would display figures in the summary that are at all different from the "performance" tab's report?

I should have a very simple tax return this year and I'd prefer not to manually look through every single parameter of every single sale trying to chase down a discrepancy.

Thanks

[stephenmorgan]

I notice also that different report totals have different totals.  I tried including the numbers from canceled orders and credits. It gets very close but still does not add up. I tried removing the eBay collected tax but totals are still off.

Since I printed out the Order Details for each order I am using this information.  I printed out the entire year sales summary and made sure I do not have any missing Order Details reports.

[monica-sells]

I have been told previously that the reason for the discrepancy is

The "Sales" page is just that...compiled by the "Sale" day

The "Reports" Page is compiled by the settlement dats.

So, there can be a possible 4 days of sales not counted during a period because they are in "Processing"....

I hope I made sense. (obviously, these are usually around the beginning or the end of a period.....regardless of your start and end date

[wanderingwolfdog]

Thanks to both of you for your replies. I also downloaded and checked the CSVs from both sources yesterday evening and no matter what I did to reconcile them (ie removing taxes taken out by eBay, looking at cancelled orders, adding up individual fees, etc) totals remained different. Slightly different, but different nonetheless.

The CSV for the "performance" tab seems to have all the order details and also produces the highest net profit for the year, as well as matching the records I personally kept after every sale during the year, so barring anything else I feel safer using that for tax records. Since it represents the highest amount of net income, if there is an inaccuracy compared to the other sets of information, I will have paid more in taxes than I owe, rather than less. But I still really dislike that there are these different figures in reports that aren't easily reconcilable. I wonder if a 1099-K is actually easier to handle.

I should note that when I have had customers experience an "item arrived damaged" with an International Shipping Program order and receive a refund from eBay (but not me), eBay apparently changes my gross/net figures for the order, even though they actually do not change for me since eBay is responsible for the refund.

The settlement date issue is a good point and one I had previously checked. At the end of the year, I had $100 or so in sales which were not yet settled- buyers purchasing on say December 31st but me not receiving the payments until January- but the discrepancy was still not resolved by the exact amount.

[stainlessenginecovers]

Simply use the REPORTS tab...shows 3 things that will match a 1099 to a T (if you were getting one, has for me for 2 years now)...

The 3 things, you can 'print' all together and shows

Gross Sales

Refunds

Fees

The only 'other' things (at minimum) you want to have the info for, is

a.) Shipping Label cost

b.) shipping materials if you bought any).

c.) Original Cost of items sold

What's left is 'taxable' and you will pay about 15% of that 'profit' for 'Self Employment (Social Security/Medicare) and then whatever percentage for 'taxes' to both Fed and State.

Of course, there are NUMEROUS other things that can be written off, that's where, even filing on line with a 'Turbo Tax' or going to an HR Block (for examples) is worth the couple hundred bucks as they could get you even 'more' write offs. 

[nobody*s_perfect]

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@wanderingwolfdog wrote: ... The settlement date issue is a good point and one I had previously checked. At the end of the year, I had $100 or so in sales which were not yet settled- buyers purchasing on say December 31st but me not receiving the payments until January- but the discrepancy was still not resolved by the exact amount.

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Did you check both ends of the year -- Transactions from late December 2022 paid in January 2023 and also transactions from December 2023 paid in January 2024?

[monica-sells]

@wanderingwolfdog 

Just a bullet point that might assist your preparation (as the subject of 5 audits over my self-employment years)

All that "really" matters is your recorded BANK STATEMENTS....(for the income side)

Those MUST match up with your claimed income from whatever source you receive payments from.

If you have 3 platforms you sell on and they each have $1000.00 in "payouts/transfers of monetary exchange (which should be cumulative $3000.00 in YOUR bank account) but your bank account totals $3250.00 in total money "in" for the period, regardless of what the platform reports tell you, you NEED to account for that $250.00 discrepancy...

Reconciliation is important for the calendar year....

That's the way it works.......

oh...seek real advice from a competent tax person...its usually affordable and well worth it.

That will get you off on the right foot and you can probably learn enough to do your own next year

[wanderingwolfdog]

Yes, I wasn't selling much of anything in December of 2022 and had no payouts during that period. Made it easy.

[wanderingwolfdog]

I have the CSV from my bank as well, that includes all deposits for the 2023 calender year. To keep things simple the checking account I use for eBay is purely for selling and completely divorced from any other activity. There are no deposits into the account besides eBay payouts, and no withdrawals except for eBay fees/shipping labels, or me taking money to spend elsewhere.

My total deposits (all from eBay) for the year are slightly less than what eBay's records show my net income to be (after shipping labels + eBay fees, etc). Yet another number that is very close but doesn't 100% reconcile. However, it is less than what eBay's reports show I should claim. I would rather be on the cautious side and pay more in taxes than not pay enough if, as it seems, there is no way to know exactly what total to use.

[wanderingwolfdog]

I've never received a 1099-K from eBay. Are you saying the "reports" tab contains the amounts that would be put into a 1099-K if I qualified to receive one, versus the results from the "performance" tab?