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

[zombitroid]

I have a 1099-K for about $8000.00 from paypal. I'm wondering if they subtracted out the SALES TAX ( for united states sales tax for certain states ) from the box 1A total gross received amount? I've researched online and can't find an answer. I downloaded the 1099-reconciliation form ( which shows how paypal calculated the 1099-K values ) and from what I can see they INCLUDED the sales tax in that $8K number. So that would mean I get to report the sales tax as an expense in turbo tax deluxe right?

[RobertB4444 · Accepted solution]

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

@zombitroid 

[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!

[mooney101]

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

[zombitroid]

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

[JamesG1]

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