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1099 Tax Form from Ebay

Started by Desert Phone Guy, September 12, 2021, 11:55:55 AM

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poplar1

#15
You can click on the order number (on your all sold page) and go back to 1/1/21. It does show the amount subtracted for eBay fees and sales tax. However, when I tried it, it shows the amount deducted for ebay shipping labels only back to 9/1/22. I don't know if this is because  being able to see the cost of label and fees started at that date, or because, as you suspect, it is not shown after 90 days or so.

Even if you charge separately for shipping, eBay still gets 12.9% of what you charge, and for those of us that are in a sales tax state, they get charge the seller 12.9% of the sales tax that we never see.

The one on the right is from last year. It does show that buyer paid $3.12 shipping, but does not reflect that eBay also charged me $3.12 for that label.

On your purchases printout you can also go back to beginning of last year. But it just shows the cost of item, without shipping or sales tax paid, for purchases older than 4 months (as of today). So I have to put total amount in the optional "notes"  to keep track of total paid on items I purchase from eBay. I also try to put a removeable label on the bottom of each purchase including the date and total amount I paid including sales tax and shipping.
"C'est pas une restauration, c'est une rénovation."--François Martin.

Contempra

ARFF!! I do not sell anything on ebay, I absolutely do not like their policy. It must be close to 3 or 4 years since I went there. Before I bought certain things, but I made arrangements between the seller and me and I paid cash. It was risky every time because my money could get lost or stolen, but I was always lucky. But I no longer tempt the devil. I did not buy from the USA because of the exchange rate and because the majority of sellers only sent to the USA and not elsewhere (Too bad) . But ebay exaggerates a lot I think!

TelePlay

It's US IRS law and Executive Branch policy, not eBay in any way.

Yes, eBay charges a fee for selling on their platform, it's a business seller's contract with on each listing knowing eBay will charge fees on a sale to support all that is needed to "pay for" eBay's costs to run the platform PLUS some amount of profit used to improve their platform (typically under research and development to produce a better platform) AND earnings paid to investors as their return on investment.

Investors/owners expect to earn a return on investment or they would not run the platform. And their business model is structured to provide the best services at the lowest costs to make a profit without overcharging sellers (taking more than they now do) because sellers will walk away if they feel eBay fees are excessive in their own business model, they also need to turn a profit to stay in their business (turn a profit).

It's capitalism.

poplar1

Quote from: markosjal on December 11, 2022, 07:30:44 AM. Also looking further at ebay's site I see no way to track shipping expenses (that I buy via ebay), more than 90 days back.

You can still pay for your Ebay shipping labels by using Paypal. Then, you will have a record in Paypal of all the Ebay labels you purchased going back to the beginning of the previous year.
"C'est pas une restauration, c'est une rénovation."--François Martin.

TelePlay

When opening an eBay account, you agreed with their terms and conditions. By accepting their terms, you have entered into a contractual agreement with eBay to use their platform as stated in that contract.

When listing an item, specific performance terms and conditions come into play to meet eBay's seller requirements.

Further, when bidding on an item and being the highest bidder, or purchasing a Buy It Now item, contractual buyer performance requirements are in play.

Seller's have to meet certain contractual terms, buyers have to meet other terms.

Outside of the eBay contract, buyers and sellers have to follow Federal IRS and State Department of Revenue laws concerning all income and the payment of any taxes due.

$20,000 was a generous cut off that assumed sellers under that sales total would comply with tax laws without the burden of companies compiling and sending a 1099. Many did not, they treated the $20,000 as a loop hole allowing them to pay no income tax due on thousands of dollars of profit/income.

$600 is a rigorous cut off imposed without giving sellers 3 years to implement a GAAP record keeping system (and how can a $1,000 a year seller afford to pay for an account and tax attorney to satisfy IRS record requirements).

The current administration's policy change to send 1099 forms at the $600 level forces sellers to be much more honest on their tax returns, to report ALL sales (less legitimate costs and expenses) as profit in line with the issued 1099 form and to pay income tax due on any profit to Federal and State agencies.

The current administration does not trust voluntary reporting of income from individuals on tax returns and changed the 1099 limits to force compliance with tax laws. The current administration turned a large percentage of sellers on eBay into commercial business and that is a lot of expensive and time consuming bookkeeping, accounting and record keeping to reduce sales by costs.

Unfortunately, this year's 1099s may involve prior years sales. According to the IRS website about audits,

"Generally, the IRS can include returns filed within the last three years in an audit. If we identify a substantial error, we may add additional years. We usually don't go back more than the last six years.

The IRS tries to audit tax returns as soon as possible after they are filed. Accordingly most audits will be of returns filed within the last two years."

I doubt any small volume, personal (non-commercial) seller on eBay has kept records during the past 3 years to justify expenses when determining net profit/income (the IRS could claim back taxes due plus interest and possibly fines for the past 3 years).

The digital recording of everything somewhere and the availability of quickly passing that data to any federal agency, along with 1099s sent to individuals (and the IRS) which will be used to identify which tax returns should be reviewed, greatly increases the burden and risk on non-commercial eBay sellers.

Unless a seller has been running their online sales under a GAAP (generally accepted accounting principles) bookkeeping system for 3 or more years, get ready to pay after receiving an audit letter in the mail.

markosjal

Quote from: poplar1 on December 11, 2022, 07:55:02 PMYou can still pay for your Ebay shipping labels by using Paypal. Then, you will have a record in Paypal of all the Ebay labels you purchased going back to the beginning of the previous year.

That's a LOT to have to do to document money that ebay is collecting even on behalf of USPS. I think you can also print the label amount on each label and keep a copy but there again its not "automatic"
Phat Phantom's phreaking phone phettish

poplar1

#21
Quote from: markosjal on December 16, 2022, 11:53:41 PMThat's a LOT to have to do to document money that ebay is collecting even on behalf of USPS. I think you can also print the label amount on each label and keep a copy but there again its not "automatic"

When purchasing an ebay shipping label, you have the option of using your funds (proceeds from sales) not yet paid out, or paypal, or another payment method such as a credit card. Once I check Paypal, it is automatically the default choice next time, so no more trouble.

If I print labels from laptop, one label per page, it shows the cost of the label, buyer's address, and partial item description on the half-page that is not part of the label.

I always print the label cost on the label.  Once setup, you don't have to do it again. (This is to show customer that I am not overcharging for shipping.)

Just sayin' that you can go back to 1/1/21 in your Paypal account, rather than 90 days in your ebay account, to see shipping costs.
"C'est pas une restauration, c'est une rénovation."--François Martin.

TelePlay

QuoteWhen purchasing an ebay shipping label, you have the option of using your funds (proceeds from sales) not yet paid out, or paypal, or another payment method such as a credit card. Once I check Paypal, it is automatically the default choice next time, so no more trouble.

I was able to see all of my sales transactions going back to the middle of 2021. Each can be opened up to see the order details. To the right of the first line "Fees based on" and the $dollar amount, there is a small carat pointing downward (red arrow). Clicking on that carat displays how eBay got to the $dollar amount on which they take their cut.

While it is not a shipping postage receipt, it does show how much was added to the sale price for shipping and tax. So, shipping for an item sold in 2022 using "current funds" can be found/seen/printed as in the example below.

Anything sold with "free shipping" is a different animal (not shown on eBay order details) and in that case, for postage it is probably best to use PayPal for a postage payment/shipping label to get that record of payment. Tying that to a sale is another accounting/bookkeeping headache.

The disappointing aspect to this is that eBay collects its fees on not only the sale price BUT ALSO shipping and sales taxes charged to the buyer. There is just something wrong with that.

TelePlay

As reported on Friday:

"The Internal Revenue Service (IRS) on Friday announced it would delay a rule that would have required tens of millions of Americans who received payments of at least $600 to report their earnings, following widespread confusion and angst about the new requirements."

"But acting IRS Commissioner Doug O'Donnell told news outlets Friday that the rule triggered confusion and would be delayed by another year."

This may be until "they" come up with a way to implement this over time, print bookkeeping requirements so private sellers can learn what is needed to justify costs and grandfather in anything purchased before they state such record keeping needs.

markosjal

I also have heard that there is very fierce opposition against this new reporting law and as I understand it, it may be overturned by next year. I do not recall were I heard it but believe it was on a news broadcast.
Phat Phantom's phreaking phone phettish

TelePlay

They are not sending out 1099 forms but the Kansas City IRS office put out a notice even stronger, or scarier, than a 1099.

They published a check list reminder on 1/31 at

https://www.irs.gov/newsroom/key-points-to-keep-in-mind-when-filing-2022-tax-returns

which included these published, in another media platform, warnings.

They want to squeeze their cut out of every penny that is exchanged, it seems.

=====

"The IRS' list of "key points to keep in mind" when preparing to file a 2022 tax return, issued on Jan. 31, includes recommendations like choosing a tax professional carefully and filing electronically with direct deposit to receive refunds quickly."

"The list also includes a warning to taxpayers that they must report all types of income on their tax returns."


"This is important to avoid receiving a notice or a bill from the IRS," the agency stated."

"The IRS singled out several sources of income for taxpayers not to forget to include in their filings, including sales from goods created and sold on online platforms; investment income; money from part-time or seasonal work, self-employment, or other business activities; and services provided via mobile apps."

They are going after everything, garage sales, cutting the neighbor's grass for $20 and every other cash basis activity (the cash or under the table work for a few bucks economy).