Jump to content

Speaking of Ebay I Just Got My 1099K and It's Not Correct


leomara

Recommended Posts

I know this requirement was pushed back until 2023 but it you received a statement you better be able to verify it.  I'm a low volume seller so in one month I had only 4 transactions.  I keep meticulous records for sale amount, postage received and spent and Ebay fees.  There is no way I can jumble the numbers from those 4 sales to match what Ebay has reported to the IRS.  I fear they have overstated my income by hundreds of dollars if not more.  I spoke to an Ebay representative and they advised me to prepare detailed documentation and send it to them so they can review and make corrections if needed.  This is absurd that I should spend my time assisting Ebay in correcting their errors.  

 

  • Like 4
  • Thanks 3
Link to comment
Share on other sites

I'll buy on ebay but I don't sell any longer. The effort is too great. My relatives have had success on Mercari but I have no experience with it. Most stuff I have to sell isn't worth the effort so it's easier to just donate it.

Edited by Golden73 (see edit history)
  • Like 4
Link to comment
Share on other sites

Thank you rocketraider, there are many members of the AACA who sell on Ebay and that is why I post Ebay issues here.  What I've since discovered is Ebay has reported my "income" as price of item sold plus postage received.  They do include postage paid to ship or their fees in the equation.  Consequently, the "net" I must figure myself.  Please take note but verify your own 1099K accordingly.

  • Like 1
Link to comment
Share on other sites

Then take it up with Steve, Peter and West, and while you're about it have them strip me of the few moderation powers I have left.

 

If you aren't a current AACA member, seems to me your outrage is slightly misplaced.

 

Now that the thread has been completely derailed, maybe it should be closed. I personally view leomara's situation as a cautionary tale.

  • Like 4
  • Thanks 2
Link to comment
Share on other sites

1 hour ago, leomara said:

Ebay has reported my "income" as price of item sold plus postage received.  They do include postage paid to ship or their fees in the equation.  Consequently, the "net" I must figure myself. 

Sounds right. 1099 is not a NET income document, just a money passed on document. I agree, you need an accountant  if this is a foreign idea to you. I am not giving tax advice, just trying to explain in layman's terms.

 

And I see nothing wrong with this thread of posts. It is not political, religious, harassing, sexual, vulgar, profane, etc. and does promote the selling of automotive parts and automobiles of the type AACA likes. I say promote, as getting issues resolved that appear to disrupt selling and therefore buying of said automobiles is good.

  • Like 3
Link to comment
Share on other sites

  Just to help put this thread back on track, ebay sales are totaled as sale price + shipping that you charged the buyer. I questioned this once, asking why they include the shipping charge. Their answer was "because many sellers include the shipping price IN the sell price and offer free shipping". So, to get your net you need to use the sale price + shipping charged, then deduct ebay fees and shipping cost to get your net. Please don't take my word for it though, talk to your tax preparer to get all your deductions.

  I think this thread has the potential to be very helpful as many of us here use ebay to buy and sell parts.

Edited by pkhammer
added wording (see edit history)
  • Like 4
  • Thanks 4
Link to comment
Share on other sites

2 minutes ago, pkhammer said:

  Just to help put this thread back on track, ebay sales are totaled as sale price + shipping that you charged the buyer. I questioned this once, asking why they include the shipping charge. Their answer was "because many sellers include the shipping price IN the sell price and offer free shipping". So, to get your net you need to use the sale price + shipping charged, then deduct ebay fees and shipping cost to get your net.

  I think this thread has the potential to be very helpful as many of us here use ebay to buy and sell parts.

I also think many Ebay sellers use “shipping and handling” as a profit center.  Quite often I’ve bought, only to see actual postage a third or a half of what was charged.

  • Like 2
Link to comment
Share on other sites

Total sales (ALL money received) minus expenses = net profit.

 

All Ebay can report is what they know, they money they sent to you during the last year. 

  • Like 1
Link to comment
Share on other sites

  I never charge for handling or packing materials but I do try to cover shipping plus 10% because ebay takes 10% of the sale price INCLUDING shipping. So if I think $15 should cover shipping I'll charge $16.50 or $17.00. An extra dollar or two shouldn't bother anyone but much more than that I would consider excessive unless the seller is purchasing boxes and packing materials.

  Shipping is always a little bit of an unknown because you never know when listing if the eventual buyer will be in the next town or all the way across the country. That's why I like the USPS flat rate boxes, no guess work. If it fits it ships!

Edited by pkhammer
bad wording (see edit history)
Link to comment
Share on other sites

1 hour ago, rocketraider said:

Now that the thread has been completely derailed, maybe it should be closed. I personally view leomara's situation as a cautionary tale.

I say let it fly. There's a lot of asides with which I disagree, but I let it go. It's the internet. I'm sure most of us have posted things which others might find disagreeable.

Link to comment
Share on other sites

2 hours ago, TTR said:

While I'm just a guest here, I would expect moderators being able to delete all this type of unrelated nonsense promptly.

Mr. TTR, please have some compassion on your fellow

hobbyist.  Selling car parts on Ebay, and its attendant

difficulties, is something we discuss here.  And maybe

someone else has specific advice from experience to help him.

 

Leomara can get much more solace here than in talking

to Internal Revenue or an accountant.  We're his forum friends.

  • Like 2
Link to comment
Share on other sites

4 hours ago, leomara said:

I know this requirement was pushed back until 2023 but it you received a statement you better be able to verify it.  I'm a low volume seller so in one month I had only 4 transactions.  I keep meticulous records for sale amount, postage received and spent and Ebay fees.  There is no way I can jumble the numbers from those 4 sales to match what Ebay has reported to the IRS.  I fear they have overstated my income by hundreds of dollars if not more.  I spoke to an Ebay representative and they advised me to prepare detailed documentation and send it to them so they can review and make corrections if needed.  This is absurd that I should spend my time assisting Ebay in correcting their errors.  

 

 

So let me get this straight, Ebay did not make the mistake with the 1099? You misunderstood the 1099 and presumed it to be a mistake they made? rather then admit you just did not understand it. Don't get me wrong everybody, and every company makes a mistake. How did you get your 1099 delivered from EBay electronically?

 

I checked my seller hub for my 1099-K and EBay says "You don't have a 1099-K for for this year" and I sold well over 12K and 200 items. Did anyone else receive a 1099 other then Leomara from EBay this year

 

Link to comment
Share on other sites

2 hours ago, auburnseeker said:

I got a message from Ebay to view my important tax documents but have't looked at it or printed them yet. 

 

1 hour ago, pkhammer said:

I got the same message and yes, I got a 1099.

Recently?  

They should have sent me one, I will have to reach out tomorrow and find out why

Edited by John348 (see edit history)
Link to comment
Share on other sites

John348, I do not have an accounting background.  When I say it's not correct it's because Ebay collects all the funds from the buyer and I receive the remaining balance after shipping and their commission has been removed.  If I sell something for $100 and the shipping charged to the buyer is $10, Ebay collects $110 plus taxes.  I buy a shipping label from Ebay for $5 and Ebay takes their commission of $5 then they credit me with $100.  What did I gain here?  $100, OK, so why is Ebay reporting $110 income to the IRS?  Am I missing something here?  I'm getting taxes assessed to me for $110 when I only received $100.  If this is a common accounting practice I'm at a loss.

Link to comment
Share on other sites

I just got off the phone with ebay, it was a very pleasant conversation. The representative explained to me that the threshold amounts are different in 9 states. The state I file my taxes in is New York and ebay does not have to supply a 1099 to anyone who grosses less then $20,000 by law in sales in NYS for 2022. I had made a little under that amount. He did say just because there was no 1099 that it would be my decision if I did not claim it. My Accountant last year told me to claim it and then I was just shy of $20,000 as well. His feelings are that there is too much of a paper trail with a big company, and that there was too much income for it to be an oversight on my end.

  • Thanks 2
Link to comment
Share on other sites

   I started claiming my online sales back about 2014 when they had grown bigger than what anyone would consider "hobby" amount. I figured better safe than sorry if the tax man ever came knocking. Like @John348 explains above, start keeping track of your expenses, not only for packing and shipping but on purchases, travel expenses (such as a hotel room, mileage, meals) when attending a swap meet or auction, etc. etc. It didn't take long to realize that there's not much profit in it, but I have fun and get to meet a lot of kooky people!

  Disclaimer -Get a good tax advisor and don't take my word for anything. 

  • Like 2
  • Thanks 2
Link to comment
Share on other sites

I have been self employed since 2009 and have kept meticulous records every year, every year I purchase Turbo Tax Home and Business and we figure all costs and expense receipts and every year no matter how well we keep track and total out numbers, the 1099K is Higher usually by a grand, I got tired of calling ebay and paypal. At least paypal is out since ebay has all internal payment center they got closer. so I as PKhammer states use the the 1099k and then in my business expenses have all receipts and postal receipts to show actual logged mileage to and from post or UPS and start the world of expense deductions such as Ship boxes, bubble wrap, tape, ink, Internet, hotels , we pay PA sales tax also for Hershey sales but we deduct hershey spaces, advertising, porta potty,  Once after all the headache is done I call Turbo tax and get Tax expert advice on any questions or areas of concern. Then I run the federal review and check for errors with Turbo Tax after all that I am done and right before that process is done, you have the opportunity to purchase Audit defense for like 59.00 and if you are flagged or audited they will do all correspondence with IRS and now I have done it every year and they will cover all 7 years back. Its worth the non stress to me. If anyone has ever been audited the IRS never apologizes  if there wrong they just stop bugging you, so the Audit defense is worth it for me and my wife. This is what we do and we pride ourselves on good record keeping and thats all we can do is try our best and only show Incurred charges and Incurred expenses. In no way are we telling anyone what to do with there own taxes or giving anyone tax advice, its just informing our members what we personally do after many years of the dreaded 1099K over 20k or more then 600 Transactions, well now they issue that with a much lower threshold, but we are familiar with it now after many years. It seems that Uncle Sam wants all people to apply the 1099k with minimal sales. Good luck my Friends in your endeavors of the world of your taxes.

see you all at Hershey 2023

  • Like 3
Link to comment
Share on other sites

I needed to resurrect this post because all of you should know that since Ebay has issued a 1099K to you for the calendar year 2022 you are obligated to report it as income.  My accountant said it does not matter it was declared to be a non-issue until 2023 if Ebay has sent the IRS a 1099K statement.

Link to comment
Share on other sites

Curious if anyone knows if ebay is declaring all sales they recorded or just payments received?  Some customers run long tabs and pay me directly through pay pal,  as the ebay system is not friendly to do it that way. 

 

I report my pay pal payments as well,  but I want to make sure they aren't overcounting things as my pay pal payments are up there as well.   Was easy when it was all pay pal and pay pal did the reporting. 

Link to comment
Share on other sites

The 1099K ebay sends, in box one has all monies sales, shipping paid to you and all fees and any other fees Its one big total you have to report it as they did to IRS and then peel off the fees and expenses and shipping charges.

I give no tax advice, this is what I do on my own it’s incumbent of you to do your own thing or to seek professional advice.

Cheers

Link to comment
Share on other sites

I was wondering as well since some customers don't pay for items so I eventually relist them,  but not through ebay's system as they have expired from the system.  The items were never reported as unpaid either.   I was wondering if they are counting those as income as well or only the actual $ amount you collected through their payment system.  With pay pal it was never a question.  Anything they reported was strictly money you collected and not what was considered sold by ebay but remained unpaid. 

 

I have so many sales that it would be hard to determine without alot of figuring.   Someone that might have far less sales, may be able to see easier, if the numbers match or not. 

 

This years numbers seem kind of high especially when adding in pay pal so that's why I'm wondering. 

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...