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Level 1
posted Feb 17, 2020 4:21:05 PM

I started selling on Amazon in 2019 and I just sold 2 items. I know that for TX Amazon is in charge of collecting the sales taxes. Do I have to enter any info, and how?

Do I have to enter any info when doing my taxes, and if so, how do I have to do it?

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5 Replies
Expert Alumni
Feb 17, 2020 7:44:44 PM

Sales tax is reported separately to the state and is not included on your Federal return.

 

If you are selling goods, you may have to report the income and expenses on a Schedule C. This is required for a trade or business, which is defined as any activitiy engaged in for profit.

 

If these are one-time transactions, you may be able to report as hobby income on line 8 of Schedule 1, "other income," rather than as a business.

Level 2
Feb 20, 2020 12:57:24 PM

Victoria - I know that was the case in previous years, but 2019 added some complexity. Due to the SCOTUS ruling, many states began making Amazon charge sales taxes. Those of us who are 3rd party sellers on Amazon saw Amazon charge our customers sales taxes, collect those individual sales taxes, pay the individual sales taxes collected to each state - and then report the sales taxes collected in our gross sales on out 1099-K. They reported the sales tax collected as an expense on our statements, but still included it in gross sales. So...  Anyone who sold on Amazon/Ebay/etc in 2019 and going forward are showing the sales taxes collected in our Gross Transaction amount in Box 1 on our 1099-K...   Where do we report these taxes collected to lessen our Gross Sales by this amount?

Expert Alumni
Feb 20, 2020 3:43:38 PM

If you are selling on Amazon you are self-employed and will report your income and expenses on Schedule C Profit or Loss from Business.

You will report your gross sales amount reported to you as income on Schedule C.  Then you will deduct the sales tax included in your gross sales as an expense on Schedule C Line 23 Taxes and licenses .

Level 1
Mar 4, 2020 6:57:22 PM

Thank you for your reply.

I have another question. Is there any way to add my investment? I started filling the schedule C but I just saw like a way to add the expenses so I am kind of confused if the investment is part of the expenses.

thanks again.

Expert Alumni
Mar 5, 2020 1:59:35 PM

No, investments are not deductible as an expense.