Now that eBay is processing funds (reasonably than permitting patrons to pay sellers instantly), it’s required to file Kind 1099Okay to sellers and to tax authorities within the US.
A reader who’s now enrolled in this system reached out and requested how eBay was dealing with 1099Ks with regard to gross sales tax that it is required to gather and remit to states.
“I’ve contacted “Charles” on eBay’s Managed Funds neighborhood board and posted the query under however haven’t obtained a solution:
“”Is eBay reporting gross revenue together with the taxes that had been taken out to the IRS on our 1099’s?”
“My intestine feeling is that they should not as sellers by no means are in possession of this tax cash however nobody will reply my query. Does anybody have any information on this for eBay sellers?”
How you can use a Kind 1099-Okay
Kind 1099-Okay consists of the gross quantity of funds made to you inside a calendar yr, so refunds, transport prices, gross sales tax, and so on. aren’t subtracted from the overall quantity. Which means that the quantity reported in your Kind 1099-Okay will not be totally reportable in your tax return. It’s best to seek the advice of along with your tax advisor to find out how finest to make use of the knowledge in your Kind 1099-Okay.
Beginning in 2019, any gross sales tax collected by eBay on gross sales made by you within the varied market states won’t be in your Kind 1099-Okay. It’s because eBay mechanically collects and remits such gross sales tax on to the state (i.e. the gross sales tax for these states is not paid to you).
Please see 1099 varieties and revenue tax on eBay gross sales for extra data.
“We cost one last worth payment when your merchandise sells, and you do not have to fret about third-party fee processing charges. This payment is calculated as a share of the overall quantity of the sale, plus $0.30 per order.
“The entire quantity of the sale consists of the merchandise worth, any dealing with expenses, the transport service the client selects, gross sales tax, and another relevant charges.”
It seems that eBay will not be updating assist pages when it makes adjustments in the best way it handles sales-tax assortment and charges, resulting in seemingly contradictory data.