Hello. I sell on Amazon and they collect what's called a marketplace sales tax on your behalf. The only issue is they include this in your gross amount on the 1099-K. Where can I deduct this auto-collected sales tax? Some have said just to not report it as gross income, but since it's over $15,000, I'm afraid it could raise a red flag reporting $15,000 less than what's reported to the IRS. Others have said to just deduct it in expenses on line 23 of the Schedule C, but instructions seem to specifically say not to do that. I'm not exactly sure why Amazon does this and other sites like eBay and Etsy do not report these auto-collected taxes on the 1099-K.
