Curious about ebay 1099 2 2

[PeterPark]

I just got an email saying ebay was going to be sending me a 1099 at the end of the year, and I am wondering if anyone knows whether income tax is paid on ebay fees?

I am trying to figure out how much (percentage-wise) is lost by making a sale on ebay...

[SuperBird]

You'd only pay taxes on your net profit, not fees, if you report the sales correctly to the IRS.

[kav]

On 2/14/2022 at 10:49 AM, PeterPark said:

I just got an email saying ebay was going to be sending me a 1099 at the end of the year, and I am wondering if anyone knows whether income tax is paid on ebay fees?

I am trying to figure out how much (percentage-wise) is lost by making a sale on ebay...

It is considered income if over $600 so lets say you made $40,000 at your job and $1000 on ebay-your taxes would be for an income of $41,000.  Its hard to state how much you are losing it all depends on what tax bracket you fall into.  Rough guess maybe 15-20% unless you are a big time seller then maybe like 33%

[Lightning55]

You could have searched the boards: https://boards.cgccomics.com/search/?q=income tax on comics&quick=1

One post of interest on the topic, and there are many:

 

[revat]

In general, for income tax purposes you will just be taxed on your actual income (money you personally actually get above and beyond your expenses). 

So if someone buys something for $100 from you on ebay...

1.  Ebay collects $100. (and possibly more for state/local sales tax, but that has nothing to do with the seller, at least on ebay)

2.  Paypal (or whatever transaction provider) takes 3% (or whatever percent) or $3.

3.  Ebay takes 10% or whatever agreed upon percentage so $10

4.  Ebay issues you $87 and a 1099 saying you got $87.  

 

 

[SuperBird]

On 2/14/2022 at 6:31 PM, revat said:

In general, for income tax purposes you will just be taxed on your actual income (money you personally actually get above and beyond your expenses). 

So if someone buys something for $100 from you on ebay...

1.  Ebay collects $100. (and possibly more for state/local sales tax, but that has nothing to do with the seller, at least on ebay)

2.  Paypal (or whatever transaction provider) takes 3% (or whatever percent) or $3.

3.  Ebay takes 10% or whatever agreed upon percentage so $10

4.  Ebay issues you $87 and a 1099 saying you got $87.  

 

 

I didn't think eBay sent PayPal payments anymore, just direct deposit to your bank? 

[revat]

On 2/14/2022 at 3:52 PM, SuperBird said:

On 2/14/2022 at 3:31 PM, revat said:

In general, for income tax purposes you will just be taxed on your actual income (money you personally actually get above and beyond your expenses). 

So if someone buys something for $100 from you on ebay...

1.  Ebay collects $100. (and possibly more for state/local sales tax, but that has nothing to do with the seller, at least on ebay)

2.  Paypal (or whatever transaction provider) takes 3% (or whatever percent) or $3.

3.  Ebay takes 10% or whatever agreed upon percentage so $10

4.  Ebay issues you $87 and a 1099 saying you got $87.  

 

 

Expand  

I didn't think eBay sent PayPal payments anymore, just direct deposit to your bank? 

ebay still takes paypal payments from the customer side, and the related fee will apply to the whole 'sale'.  But yes this could just as easily be a credit card company, or square or whatever (but also you're probably right that it would be more accurate to take it off the "top", before the money even gets to ebay).    Just the payment processor fee.  But at the end of it EBAY will put the seller's money wherever you like (within reason), bank account, paypal account, etc.

[Lightning55]

On 2/14/2022 at 6:31 PM, revat said:

In general, for income tax purposes you will just be taxed on your actual income (money you personally actually get above and beyond your expenses). 

So if someone buys something for $100 from you on ebay...

1.  Ebay collects $100. (and possibly more for state/local sales tax, but that has nothing to do with the seller, at least on ebay)

2.  Paypal (or whatever transaction provider) takes 3% (or whatever percent) or $3.

3.  Ebay takes 10% or whatever agreed upon percentage so $10

4.  Ebay issues you $87 and a 1099 saying you got $87.  

 

 

This is not accurate.  The 1099-K has nothing to do with any of the expense side.  And as mentioned, nothing to do with sales tax.

 

If you sold a book on eBay for $100 with $10 shipping, it will show on your 1099-k (as part of all your other sales) as $110.  The 1099-K always shows what came in for product sale and shipping charged only.  It is up to you to provide data on your tax form to explain why you made less than the $110, if that is the true case.

Against the $110, you can deduct the Managed Payment fee (or eBay fee and PP fee if not on MP), the shipping you actually paid, what you paid for the comic, other related costs to that comic (such as grading, shipping to/from the grading company, pressing, admin charge).

If you are selling as a business, you can also deduct storage fees if you have a locker, mileage allotment deduction to and from the post office and storage locker, to and from destinations where you purchased comics, to and from live comic events, etc.

If you have a home office or actual commercial space (office/store), you can deduct that too.  Including office supplies, shipping supplies, possibly your phone bill to run your business, internet fees if not already part of your home office deduction.

This information is just meant to serve as a general example.  Everyone's tax situation will be different.  It is in your interest to consult a qualified tax professional.

[revat]

On 2/14/2022 at 10:40 PM, Lightning55 said:

This is not accurate.  The 1099-K has nothing to do with any of the expense side.  And as mentioned, nothing to do with sales tax.

 

If you sold a book on eBay for $100 with $10 shipping, it will show on your 1099-k (as part of all your other sales) as $110.  The 1099-K always shows what came in for product sale and shipping charged only.  It is up to you to provide data on your tax form to explain why you made less than the $110, if that is the true case.

Against the $110, you can deduct the Managed Payment fee (or eBay fee and PP fee if not on MP), the shipping you actually paid, what you paid for the comic, other related costs to that comic (such as grading, shipping to/from the grading company, pressing, admin charge).

If you are selling as a business, you can also deduct storage fees if you have a locker, mileage allotment deduction to and from the post office and storage locker, to and from destinations where you purchased comics, to and from live comic events, etc.

If you have a home office or actual commercial space (office/store), you can deduct that too.  Including office supplies, shipping supplies, possibly your phone bill to run your business, internet fees if not already part of your home office deduction.

This information is just meant to serve as a general example.  Everyone's tax situation will be different.  It is in your interest to consult a qualified tax professional.

Yah you’re right I was wrong.  I got hung up on the $600 PAYOUT reporting language, and assumed they were using PAYOUT as a base for the rest of it, but it’s gross sales, then do your own math after that.

[Lightning55]

On 2/15/2022 at 2:27 AM, revat said:

Yah you’re right I was wrong.  I got hung up on the $600 PAYOUT reporting language, and assumed they were using PAYOUT as a base for the rest of it, but it’s gross sales, then do your own math after that.

Yes, it's a mess.  The terminology is very confusing, and sometimes almost seems contradictory.  Hopefully everyone will make their way safely through it.

[theCapraAegagrus]

Gross.