State tax from eBay sales

[TJR2023]

If eBay collected sales tax directly from the buyer, would i still pay state tax on my eBay sales? 

[JamesG1]

"Would I still pay state tax on my Ebay sales?"

In many cases, Ebay collects and remits state sales taxes.

The Ebay Tax Information Center states:

Based on applicable tax laws, eBay will calculate, collect, and remit sales tax on behalf of sellers for items shipped to customers in the following states and territories......

Please review to see whether your state or community is listed.

Profits from your Ebay sales activity is subject to state income taxes unless your state has exempted that activity or does not impose a state income tax.

[TJR2023]

eBay did collect $621 in sales tax for the year 2022. My main question is where would I deduct this number from the total eBay Sales when reporting, because otherwise I would be paying taxes on that $621also. 

[JamesG1]

Compare your sales reports from Ebay with the reporting on your 1099-K to see whether state sales tax is included in box 1a of the 1099-K.

We are not able to see the your 1099-K information or sales reports that you received from Ebay.

IRS form 1099-K Instructions for box 1a page 4 states:

Box 1a. Gross Payment Card/Third Party Network Transactions 

Enter in box 1a the gross amount of the total reportable payment card/third party network transactions for the calendar year. Gross amount means the total dollar amount of total reportable payment transactions for each participating payee without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts. The dollar amount of each transaction is determined on the date of the transaction.

@TJR2023

[TJR2023]

I wont be receiving a 1099k from eBay 

[AliciaP1]

You just need to report your full income from eBay sales before fees and taxes and then you can deduct the $621 as Sales Tax Expense.

To add the expense to your 1099-K activity you can follow these steps:

1. Within your tax return use the magnifying glass icon to search for Schedule C
2. Click the Jump to link
3. Click Edit for the line of work
4. Scroll down and click Add expenses for this work
5. Scroll down to the Less Common section and click the dropdown icon 
6. Scroll down and through the pages to the Taxes and licenses section and check the box 
7. Click Continue
8. Click the Start button for the expenses you need to enter

Also, see What self-employed expenses can I deduct? for other expenses you may be able to deduct.

[paulslasor]

But the 1099K is under personal income section and not under business.  will is count since you are placing the income under the personal section and not under business, or is there a section for the 1099K in the business section (home and business)?   The Schedule C is form 1099-MISC.

[ErnieS0]

There is a line in Home & Business to enter income from Form 1099-K.

1. Select the Business tab
2. On "How do you want to enter your business income" select I'll choose what I work on
3. Select Profit or Loss from Business
4. On "Here's the business info we have so far, Edit your business
5. On "Your [xxxx] Business," select Business Income
6. On Business Income, select 1099-K Income

@paulslasor 

[paulslasor]

Thank you.  It did help but had to jump through a few hoops as it did not go directly to that location (probably since this is the first time).  It is classified as a business since and not a hobby. 

Question: Where would I post

- refunds I have given (about 2000)

- Shipping fees

- Ebay transaction fees

- "eBay collected tax" that ebay took out and did not report on box 4 of 1099-K

[MarilynG1]

Refunds would be entered just below the 'Income Reported on 1099-K' under 'Income you Gave Back'.

Shipping costs, Ebay transaction fees and Tax Collected can be entered as Business Expenses.   If you don't see a matching category, you can enter a description and amount under 'Other Miscellaneous Expenses'.

Here's more info on How to Enter Business Expenses.  

@paulslasor