Email a copy of 'Holy Grail of Information about eBay 1099Ks' to a friend
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Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.
ONE question ebay can’t answer is why they made available 1099K’s for 2020, they didn’t mail them but are down loadable. Can’t/won’t say if they will mail them or if they’ll be sent to the IRS, going on 3 weeks with out any supervisors being able to answer the question.
The best way to see what is going on with your 1099-K is to do some checking for yourself. Don’t take anyone’s word as to how it is calculated. Take one of your least busy months and see if the total for that month reported on your 1099-K matches your total in your personal accounting. It should be exactly the same to the penny if you and ebay are doing it the same way. If not, dig deeper to find out why.
Check the individual sales you had against the 1099-K Detail for that month (downloadable). Like if you chose February, did the first sale you had listed show up as the first in the detail? Did the last one you had show up as the last in the detail? If not, you are already misaligned with eBay. You should find out why. It probably pertains to when each of you counted the sale.
Picking random sales during the month, did they match up with the 1099 Detail? What did the 1099 value for that transaction include? Mine has product sales and shipping charges collected on eBay (not the amount of the shipping PAID for the label). That’s all I have for each item. No Sales Tax, no fees, no conversion costs, or any other numeric values. Just 2 parts.
The date when sales attach themselves to the 1099-K can be important. Especially suspect is when payments cross the end of one month and the beginning of the next. The same for the end of the year. If you had a large auction sale of several thousand dollars on Dec. 31, 2020 and counted it for 2020, and eBay counted it in 2021 because that was when it was paid, you might be counting that same big sale twice.
Get a firm grip on how the 1099 is constructed, and you will either feel more confident that it is correct, or at least have some data to argue.
I found that the 2020 1099-K amount exactly matched the gross amounts in 2020 payments captured in the accounting system by entering the gross amount, fees and the amount received for each payout. Unfortunately, eBay does not sum gross amounts or fees if multiple orders are rolled up into a payout. Also, postage fees are entered in the gross amount received column instead of a fee column. Business velocity picked up in 2021 making it almost impractical to calculate and enter rolled up payout amounts for each payout. Some payouts were changed to weekly to reduce the number of deposits in 2022. Will this cause a problem at the end of 2022? In 2021, eBay posted some payments and fees in Euros or British pounds. Are foreign site sales included in the 1099-K? While eBay claims that payments transaction downloads are the answer, they are not.
In addition to taking time to import and format in Excel, the amount of skill required to extract information from the data is likely beyond the capabilities of many sellers. Responses by eBay representatives including “payments specialists” on the phone and in community forums suggest that few, if any, have ever attempted to extract payments data and use it to prepare a Schedule C in a US income tax return.
The remittance issues of last year’s return were something we contacted eBay about NINE TIMES. NOT ONCE did we get a reply from them by phone, email or letter. We DID get a letter from our state Department of Revenue sales tax collection group asking where our usual remittance was.
When we called them we told them that eBay supposed to remit the sales tax for us, and they asked how much we’d collected, which we provided based on OUR records. We were told they may be investigating eBay, but we never heard anything after that.
We’d probably prefer to collect and remit our own sales tax to A) know it’s correct, B) ensure it’s on-time, and C) because there is no reason we should allow eBay to hold and use all that money for free just because our state only collected it annually now rather than quarterly.
We don’t trust eBay’s figures at all. Considering they can’t keep basic functions of their system running reliably (messaging, feedback, labels, losing listing photos or entire listings, etc.), we have little faith that they’ll be able to handle the mountain pf transaction data generated by millions of sellers. Of course, they’re losing sellers quite rapidly now.
We’ve rapidly scaled down online sales in favor of local auctions & flea markets [we now wholesale to other flea market vendors on a cash-only basis]…the leftists in government are nothing less than greedy Marxists.