I am in the process of filling with my 1099-K. The 1099-K is from Mercari and my unadjusted gross includes "Item Cost", "Buyer Paid Shipping Cost", "Buyer Merchant Fees" and "Sales Tax Charged to Buyer". For my income, I am not actually receiving this unadjusted gross amount as Mercari charges "Selling Fee" and "Processing Fee" per transaction. Is there a way to file these fees as expenses, and if so, what expense/how would I file these fees?
You'll need to sign in or create an account to connect with an expert.
I presume that you are entering the IRS form 1099-K as income directly into an IRS form Schedule C Profit and Loss from Business. If so, you will be able to report each of the expense items that you named as a business expense within the Schedule C.
Presume that the revenue breakdown for your income follows these numbers. The IRS form 1099-K reported $10,000 but you were responsible for several related sales fees and sales tax and you actually received $7,900.
Item cost (selling price) 7,900
Buyer paid shipping cost 500
Buyer merchant fees 500
Sales tax charged to buyer 100
Selling fee 500
Processing fee 500
IRS form 1099-K 10,000
Report the full $10,000 as your income for the self-employment activity. You may report the full $10,000 in one entry under Other self-employed income or you may report $7,900 as IRS form 1099-K income and $2,100 as Other self-employed income.
If you choose to report the full $10,00 as your self-employment, you have reported the substance of the IRS form 1099-K even though you have not followed the exact process within the tax software. IRS form 1099-K is not a form 'required' to be reported like a W-2. Its purpose is to aid in the reporting of taxable income and that is what we will be doing.
In addition, make sure that your personal tax records can show the difference between what the IRS form 1099-K reported and the numbers that were reported on the Federal 1040 tax return should the IRS have a question at a later time.
The various fees can be created as miscellaneous expenses to provide as much detail as you would like to report as Schedule C expense.
Still have questions?
Make a postAsk questions and learn more about your taxes and finances.
jershaff12
New Member
katiegirlsc
New Member
seh130030
New Member
JonQuest
Returning Member
AnnaCx
Level 2
Did the information on this page answer your question?
You have clicked a link to a site outside of the TurboTax Community. By clicking "Continue", you will leave the Community and be taken to that site instead.