How to report information from 1099k

[acstylesllc]

I conduct a direct sales business. I received a 1099K from this company with my gross sales. This gross sales amount includes my sales, credit card processing fees, and state sales tax. However, the company never pays me the sales tax or processing fees. The company makes the payment to the state for sales tax. The company also withholds the processing fees from the amount they pay me. Would I 1) report the gross sales amount from my 1099k (which includes the state sales tax and cc processing fees) as general bus income, and deduct those amounts as expenses, or would I 2) report as general business income the gross sales amount less the state sales tax and cc processing fees, which would then not agree to amount reported on 1099 K.

[RichardK]

Report the Gross per the 1099-K and take the appropriate deductions. This way when the IRS matched the 1099-K to your return there will be no discrepancies.