My accountant says to just enter each item and its purchase price via Schedule C, but TurboTax seems to just think 1099K is for self-employment and doesn't make any sort of distinction.
There are two ways to report income from your 1099-K without calling it self-employment income. Your accountant saying to use Schedule C is the same as saying to report it as self-employment income.
If your Form 1099-K is for personal items sold, similar to having a garage sale, and you were not in a trade or business, the IRS allows you to also deduct the related expenses for the sale up to the amount of the sale.
If you do not need the self-employment section, you have two options to report Form 10999-K in TurboTax.
Both following options will report Form 1099-K and also zero it out on your return. This will mean you appropriately pay -0- tax on the non self-employed income.
For reporting Form 1009-K for personal items sold not associated with a trade or business, you have two options:
Otherwise, Form 1099-K must be included in the self-employed section of the return. In the self-employed section, negative income cannot be reported. Self-employed persons must use the rebates option under income or report any offsets as miscellaneous expense.
For reporting Form 1099-K from self-employment with offsetting amounts that is associated with a trade or business you own and operate, TurboTax offers two self-employed options. From the Wages and Income section, go to Self-employed income and expenses and select Start/Revisit to begin with reporting Form 1099-K.
How do I do this with the home and business version? my husband has a sole proprietorship that he files on schedule c - but my ebay sales are done by me personally - thanks!
Since you are already using TurboTax Home and Business, I recommend you report the 1099-K as "business income" (Schedule C), and show the cost of of the personal items you sold as an expense (do not use Cost of Good Sold interview).
Use the Other Common Business Expenses interview and add "Cost of Items Sold" as a Miscellaneous Expense equal to what you were paid by eBay. You don't want to show a business loss or a business profit, just report your 1099-K receipts.
I'm using TT Deluxe. I've followed the instructions for entering my Paypal sales but I don't get the responses that you have outlined. There is a field for entering the total amount of the 1099K but now where to enter the offsetting expenses. I must be doing something wrong but I've tried it three times and it simply won't arrive at the correct conclusion.
If your Form 1099-K is for personal items sold, similar to having a garage sale, and you were not in a trade or business, the IRS allows you to also deduct the related expenses for the sale up to the amount of the sale.
For reporting Form 1009-K for personal items sold not associated with a trade or business, you have two options:
I found the whole search window to be extremely cumbersome so I surrendered. But I think I found a work-around in the home & business version. I created a new company for myself - listed the amount of the 1099k as income and then listed the same amount as inventory costs. I'll have a Turbo Tax expert review my return this year to make sure its correct. Not sure what you can do in the deluxe version :(
It isn't really inventory cost, but deducting the amount there will serve the same purpose. When you have the expert review your return, you can get it in the right place. You can not claim business deductions in the Deluxe version - unless you are using the desktop version of the software. If you are using the Online software, you have to use Self-Employed to deduct any business expenses on Schedule C. @pjcupples
This is the same reply you made before and it didn't work for the other Deluxe user and didn't apply to me.
What about using the Home & Business edition? Is what I did correct - creating a business for me personally and recording the 1099k as income and then showing inventory for the same amount?
Yes, you can use Home & Business to report business income and expenses. You can only report the income part if you use Deluxe Online. You did the right thing as far as setting up the business and entering the 1099-K. If you reported the expense as Cost of Good Sold in the inventory portion, that will work the same way as if you had used ''Supplies'' expense. You have the right version for what you need. @pjcupples
I can not follow these instructions at all. The search bar has no "Jump To" in the results, it just brings up community questions. How do I get to these screens without using the search bar - it's useless.
@copland007 Because we do not know the nature of the income you received, as reflected on your 1099-K from Paypal, you might want to follow-up with us concerning whether the income you received is from self-employment (your own business), or if it was just items you sold and the buyers used their credit card to pay you. Information of this type will assist us in determining whether any of the income you received is taxable, and if so, how much is taxable.
Because you have a 1099-K, what follows is some information about how you can enter your 1099-K into TurboTax. The following assumes the 1099-K reflects income from self-employment, in other words, income received from your own business. As noted above, if you feel you were not engaged in a business, provide additional in a follow-up post explaining what you did to earn the income and why you feel you were not engaged in a business. As a reminder, do not include personal identifiable information in any follow-up post.
You will receive a Form 1099-K from each payment settlement entity from which you received payments in settlement of reportable payment transactions. A reportable payment transaction is defined as a payment card transaction or a third-party network transaction. You received a Form 1099-K because a third-party payment processor paid $600 or more to you in the previous calendar year.
The income received on Form 1099-K should be included in the gross receipts of the taxpayer's business income. For a sole proprietor, Form 1099-K receipts are reported on Schedule C. For a partnership or corporation, the income is reported as part of the company's gross revenue.
If you are entering income from a 1099-K, remember the 1099-K just reflects gross income and does not include any of your business expenses. You’ll have a chance to enter self-employment expenses in another part of your return.
Here is a link to a TurboTax article that discusses how to enter 1099-K information into TurboTax. Also included below is a link to an IRS webpage that discusses Form 1099-K. You might find this information helpful.
How To Enter a 1099-K into TurboTax
Sorry but this is yet another set of instructions that starts with "Jump to link in the search result", that doesn't exist!
This was ebay sales of personal items, not a business.
Selling items on e-bay is a business to a certain extent. You would go to the Self-employment section, enter in the type of industry and and answer the questions. You do not have to enter in the 1099-K. When they ask the type of income you had, select other, type the word "checks" and add up all of your sales (should match the 1099-K).Then there will be an opportunity to enter any expenses including the cost of good sold (amount you paid).
Here is a link with a few additional steps. entering self employment income
This information needs to be updated. I just followed the instructions shown immediately below for Option 2, #5. There is no ability to "enter an adjustment to reflect the cost of these items as an offsetting, negative amount up to the amount of the income".
To enter the negative adjustment, follow these instructions:
Go to the Income and Expenses section of TurboTax
- Choose Less Common Income
- Choose Miscellaneous Income, 1099-A, 1099-C
- Choose Other reportable Income
- Enter a description and the amount of your adjustment as a negative number
I received a 1099-K from an online marketplace for $9500 in gross sales of personal property (various things I've had for anywhere from 1-15 years). My cost basis (original purchase price, shipping, fees, etc.) is $5500, so my gains are $4000.
I don't believe I am a business, so should I use Option 2: reporting it via Other Miscellaneous Income to report these gains? My entries would appear as:
Form 1099-K Marketplace Name Personal Property Sales: $9500
Form 1099-K Marketplace Name Cost of Personal Property: —$5500
Alternatively, within the Forms, under Schedule 1, Line 8, item 16a is Taxable Income from Form 1099-K. Upon opening the worksheet, it will calculate the gain and enter that final number. However, I'm concerned that the reported gross number on the 1099-K and my adjustment won't be on the return to show how I came up with that number. Is this still an acceptable method?
To enter your PayPay 1099-K amount and deduct the cost of goods sold, your basis, follow these steps:
This TurboTax Link How do I report a 1099-K if I don’t own a business?
I received a refund from a merchant this year via Paypal and it's over $1k. Paypal categorized it as payments for goods and services and will send me a 1099-k for it.
In this case, how should I enter the 1099-k when filing tax in 2023?
Thanks in advance,
Can someone with TurboTax update this thread with instructions for reporting a 1099-K using the latest (2023) version of TurboTax? I'm trying to report a 1099-K I received from Paypal, and would like to know precisely how to enter the income and costs involved with selling personal items. Thanks
It's not Schedule C it's Schedule D / Form 8949
Loss on Personal Items is not deductible so you have to enter an adjustment to cancel the loss,
or report the cost same as the proceeds.
Gain on Personal Items is a taxable gain.
Use Box Category C/F since you don't have a 1099-B
The proceeds subtotals should add up to your 1099-K
If you use the adjustment (recommended) the adjustment code (Col f) is "L"
I guess I should start a new thread so I can get an answer specific to my request
I added some additional detail on my answer above.
I use Schedule C. I don't have a company so just enter under my name. I have eBay sales - I enter the 1099k amount as income. Enter shipping, fees, and other non-inventory expenses - if there aren't relevant categories, enter as other. you can't show a loss, but you can net 0 - the difference between revenue and the expenses is your cost of goods sold. Your situation may need tweaking, but hopefully this helps.