1099-K: does the amount shown in BOX 1A include sales tax collected? (paypal 1099-K)

If they included the sales tax then you definitely get to deduct it as an expense.

 

@zombitroid 

Thank you! I just talked to paypal on the phone - they confirmed that the paypal 1099-K includes the GROSS sales amount for all transactions for "goods and services". No personal transactions ( no reimbursements between friends / family included on 1099-K ). In that amount in box 1A, is the gross sales which includes sales tax and paypal fees, shipping paid, etc.,

 

For anyone out there that this helps: you can sum the sales tax by downloading a copy of your 202X statement and summing the fees column ( for paypal fees ) and the sales tax column ( for sales tax ).

 

This is DIFFERENT than the EBAY 1099-K which deducts the sales tax from the final amount reported on the 1099-K.

 

I also confirmed what paypal said on the phone myself by downloading the 2024 transaction reconcilation document ( which is a CSV of all the numeric data they summed to calculate box 1A ). I confirmed some of the transactions to my wallet history and realized that paypal did NOT take out the paypal fees or the sales tax from the 1099-K calculation. So this info is confirmed by my math and the paypal agent. But i suggest you do your own math if you have this question just to be sure 🙂 good luck!

So where do we enter the sales tax at? Do we deduct it where we enter the 1099-k information or is there somewhere lese we list it? Thank you

you deduct it as an "other expense" for your business

If sales tax is included in the IRS form 1099-K box 1a total, the amount of sales tax reported in box 1a may be deducted in your self-employment activity reported on a Schedule C Profit and Loss From Business.

 

In TurboTax Premier Online, report self-employment income and expenses by following these directions:

 

• Down the left side of the screen, click Federal.
• Down the left side of the screen, click Wages & Income.
• Click on the drop down arrow to the right of Self-employment.
• Click to the right of Self-employment income and expenses.
• At the screen Your 2024 self-employed work summary, click Edit.
• At the screen Here's your info, select Add expenses for this work.

 

@mooney101