Ebay 1099K sales Tax

[paulslasor]

This is the first time I got a 1099K from ebay.  I was wondering, since I have ebay take out taxes out of each sale, along with seller fees, was wondering about if I need to pay taxes again, or do I claim that since it is not on the 1099K they gave me. Taxes are taken out of just about every sale. I sell very small items (about 4 to 7 each) and because of shipping, it quickly climes up, plus ebay fees, and taxes they collect. 

And where do I put that in Turbo Tax, since the 1099K is not under the business section (home and business), it is under personal income section. 

[JamesG1]

"Since I have ebay take out taxes out of each sale, along with seller fees, was wondering about if I need to pay taxes again, or do I claim that since it is not on the 1099K they gave me. Taxes are taken out of just about every sale."

Are you saying that the income from Ebay reported in box 1a of IRS form 1099-K shows something less than the full amount of the sale?  

For instance, if you sold item A for $100, is box 1a reporting only $95 with the difference being state sales tax?  Please clarify.

If you are reporting the 1099-K income as a personal item sale, any loss from the sale is not deductible for personal use property.

At the screen Select any less common adjustments that apply, click Any loss from this sale is not deductible and This is personal use property.

@paulslasor 

[paulslasor]

I don't have any state tax. (Texas). but ebay does take out taxes from each sale.  This tax is not reported in 1099K in box 4.  Since it has been taken out, along with ebay fees, where do I report it since it is some sort of business but the 1099K is in personal income section.  (even though I did not make much out of it since it is more of a hobby).  Box 1 seems like it may be correct, but all the other items such as ebay fees sales tax, refunds, shipping, are all things that need to be taken into account, and reflect on the hobby. 

[JulieS · Accepted solution]

First you need to figure out if this s a business for you, or a hobby. Click here to see IRS guidance on whether this is a business or a hobby. 

If your eBay sales are a hobby, you can't deduct the business expenses you listed. Only the cost of the items you sell is deductible in that case. That means you can't deduct eBay fees, postage or sales tax. 

Follow these steps to enter your hobby income in TurboTax.

1. Sign in to TurboTax and open your return
2. Select Search and enter 1099-k
3. Select Jump to 1099-k
4. Select Yes on the Did you get a 1099-K? screen
5. Select Hobby income and Continue
6. On the next screen, enter the details from your 1099-K regarding who paid you, their federal ID number, and the amount in Boxes 1 and 4. If your form has information in boxes 6-8, select the box and enter those details, and Continue
7. If you have a 1099-K from another hobby, select Add another 1099-K, otherwise, select Done
8. Scroll down the Wages and Income page and select Less Common Income
9. Select Start next to Miscellaneous Income, 1099-A, 1099-C
10. Scroll down to Other reportable income and select Start 
11. Choose Yes on the Any Other Taxable Income? screen
12. In the description field, enter Form 1099-K Costs of Goods Sold
13. In the Amount field, enter your Costs of Goods Sold as a negative number, select Continue and then Done

If your eBay activity is a business, you file it in the self-employment income section and you can deduct expenses like sales tax, eBay fees, postage, etc. 

To enter your expenses:
 

1. Sign in to TurboTax and open your return
2. Search for Self-employment income and expenses, click Add/ Edit to the right. 
3. This will take you to the Did you have any self-employment income or expenses? screen. 
4. Answer Yes and continue through the interview to enter your expenses. 
5. If you land on the Your 2022 self-employed work summary screen instead, select Edit next to your self-employment entry. 
6. Answer the  questions until you come to the Here's your (name) info page.
7. In the Expenses section, select Start beside each category to enter your expenses.
8. If you have expenses that don't fit in the other categories, elect Other miscellaneous expenses.
9. You can then give a name and amount to each miscellaneous expense that you have.
   
    

[paulslasor]

For example, Item A sells for 100, and tax is added to the sale on ebay side as I have it stated to take out sales tax.  But in Box 1 it shows 100, but box 4 (federal income tax withheld) shows noting (blank).  (in Texas so there is no state tax).

[paulslasor]

Thank you.  It did help but had to jump through a few hoops as it did not go directly to that location (probably since this is the first time).  It is classified as a business since and not a hobby. 

Question: Where would I post

- refunds I have given (about 2000)

- Shipping fees

- Ebay transaction fees

- "eBay collected tax" that ebay took out and did not report on box 4 of 1099-K

[paulslasor]

Thank you.  It did help but had to jump through a few hoops as it did not go directly to that location (probably since this is the first time).  It is classified as a business since and not a hobby. 

Question: Where would I post

- refunds I have given (about 2000)

- Shipping fees

- Ebay transaction fees

- "eBay collected tax" that ebay took out and did not report on box 4 of  the 1099-K

[LindaS5247]

If you are a business then you are filing a Schedule C for your eBay sales?

Refunds would be under the Other Income topic, TurboTax provides a box for Returns & Allowances. An entry here reduces your gross income for Schedule C.

You can deduct your shipping fees as  Miscellaneous Expenses. Go to Business Expenses > Other Common Business Expenses > Other Miscellaneous Expenses 

Or you may find this section by typing "business expenses, self-employed" on the search bar and then click on the jump-to link.

eBay transaction fees can be deducted as follows: You can enter these types of fees under the Sales Commissions expense category in TurboTax, which will then deduct them from your total sales.

After you enter your business information, you may need to select Less Common Business expense, which will open a drop down menu option for Commission expenses.  Enter the values in the screen below (see screenshot).

If you need to get back to the business expense section, follow the steps below -

• Type “Schedule C" in the search box, top right of your screen, then click the magnifying glass
• Click the "jump to schedule c" link in the search results.
• You will arrive at the Your Business summary page where you can add/edit a business
• Follow the onscreen instructions to enter your business income and expenses
• When you get to Business Expenses - select Other Common Business Expense

eBay collected taxes: Form 1099-K does not include the sales tax when it is automatically collected and remitted by eBay.

Click here for a tax filing factsheet for eBay sellers.