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My 1099K includes sales taxes I collected as part of my business. Should I subtract the sales tax from my gross income even though it will differ from my 1099K?
I have seen two different answers to the same question on this site regarding how business owners should handle sales taxes collected and paid to the State. One answer recommended that we not include the sales tax we collect in our gross income even though it shows up on the 1099K. The other response recommended that we should include those dollars in the gross income (as indicated on the 1099K form) and then list the sales tax amount under Tax & License expenses. That seems like a great way to avoid reporting a different income than what is shown on the 1099K form, but TurboTax did not list "state sales tax" as an example of appropriate items to be listed in the "Tax & License Expenses" section. Which is the safer way to go: not including sales tax collected in the gross income figure or including sales tax collected in gross income but also listing the amount collected & paid in the Tax & License Expenses section? Thanks for you help!
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May 31, 2019
6:57 PM