1099 K Payment Card Third Party Pass Thru

Forum|Forum|6 years ago
January 29, 2020
12 replies
81 views

Our website processes transactions for a client. We get paid a set fee and the balance is transferred back to the client.

Example

Item A Costs: $19.95 ( Credit Card)

Transaction Fee: $3.95

Net: $16.00 is returned to our client

1099K Reflects $ 19.95 how do I report that the fact that $ 16.00 was returned to my client

DawnC

Employee Tax Expert

If you are entering income from a 1099-K, remember that it reports the gross amount ($19.95) of the transactions. It doesn't include any adjustments ($16.00) for credits, refunds, discounts, or fees. You’ll have a chance to enter self-employment expenses in another part of your return.

In the Other Self-Employed Income section, enter:

1099-K gross $19.95 - then add another row and enter

1099-K adjustments $ -16.00 (use a negative)

Keep detailed records in case of any inquiries.

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cwqjr

Level 2

What if you're neither "self-employed" or a business. I'm specifically asking about Ebay sales paid to Paypal where the buyer paid state sales tax which was collected by Ebay and never came to me, but is included in the 1099 gross.

DavidD66

Level 15

@cwqjr In order for your tax return and the amount on the Form 1099 to agree, report the total amount as revenue, and create an expense/deduction category for the sales tax. To do so in TurboTax Desktop:

Type "business expenses" in the Search window, and hit Enter. Click on "Jump to Business Expenses".
Click on Start or Edit next to your Business
Scroll down to "Business Expenses" and Start or Update next to "Other Common Business Expenses"
Scroll down to the bottom of the page - "Other Miscellaneous Expenses", and click on "Start" or "Update"
Create a description for the Sales Tax you didn't receive, enter the amount, and click on "Continue"

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steveszymanski42

Level 2

I have a 1099-K covering sales of sports tickets as a hobby. Line 1a reports gross amount but does not include cost of commissions and the cost of the tickets, which when all adjustments were made would result in a loss.

How do I report all of the cost and commission?

JamesG1

Level 15

Consider these possibilities when reporting sales costs and commissions.

1099-K income may be reported in different ways. Hobby income is reported as other income but the current tax code does not allow hobby income related expenses to be reported.

To report Hobby income, follow these directions.

Down the left side of the screen, click Federal.
Down the left side of the screen, click Wages & Income.
Click Show more to the right of Other Common Income.
Under Your income and expenses, click the Edit/Add button to the right of Form 1099-K.
At the screen Did you get a 1099-K? click Yes.
At the screen How would you like to enter your 1099-K? click Type it in myself. Click Continue.
At the screen Choose which type of income your 1099-K is for, select the button for Hobby income. Click Continue.
At the screen Let’s get the info from your 1099-K, enter the information. Click Continue.
At the screen Your 1099-K summary, notice that the income relates to ‘Hobby’. Click Done.

The entry will be reported:

on line 8j of Schedule 1 of the Federal 1040 tax return, and
on line 8 of the Federal 1040 tax return.

Your income may also qualify as personal item sales where the income and expense of sales is reported on IRS form 8949 / Schedule D Capital Gains and Losses. However, capital loss for a personal item sale reports $0 capital gain on line 7 of the Federal 1040 tax return.

To report Personal item sales, follow these directions.

Down the left side of the screen, click Federal.
Down the left side of the screen, click Wages & Income.
Click Show more to the right of Other Common Income.
Under Your income and expenses, click the Edit/Add button to the right of Form 1099-K.
At the screen Did you get a 1099-K? click Yes.
At the screen How would you like to enter your 1099-K? click Type it in myself. Click Continue.
At the screen Choose which type of income your 1099-K is for, select the button for Personal item sales. Click Continue.
At the screen Let’s get the info from your 1099-K, enter the information. Click Continue.
At the screen Personal Item Sales, you are told that further information will need to be entered. Learn More provides detailed information for the next steps. Click Continue.
At the screen Your 1099-K summary, notice that the income relates to ‘Sale of Personal Items’. Click Done.
Under Your income and expenses, click the Edit/Add button to the right of Investments and Savings (1099-B, 1099-K….)
At this screen, you will be asked to Review the Personal item sales (1099-K).