When reporting my hobby income am I supposed to subtract the amount I paid in sales taxes to the state on items I sold?
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Your IRS form 1099-K reports the sales price of your art as well as your state sales tax that is remitted to the state. Report the sales tax as an amount that should not be included.
To report 1099-K Hobby income, follow these directions.
The entry will be reported:
Make sure that you keep records of all transactions. Later, you may need to demonstrate to the IRS that this is not taxable income.
Perfect, so let me make sure I've got this straight, the 1099-k form shows my gross income (price+my sales tax I've already paid), and when I enter the info from the 1099-k I then hit the "this amount in box 1a is too high" button, and I enter my sales tax I've already paid on my sales and go from there?
Does that seem right?
Yes, you appear to understand the instructions for entering the income from Form 1099-K and adjusting for the sales tax.
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