What is Form 1099-K?
The Form 1099-K is basically an IRS (Internal Revenue Service) tax form. It has all of your card payments and payments received from other third-party channels in a calendar year. This form will be submitted to IRS to keep a check on your income and your returns. But any sales tax collected by eBay on your sales will not be reported in the Form 1099-K because eBay automatically transfers that tax to the State. This form will include all the gross payments received in a calendar year including shipping, refunds, etc.
When will you receive the Form 1099-K?
Not all the eBay sellers will receive a Form 1099-K. If you are just running your eBay store to get rid of your waste items or just clearing your garage, then you may be entitled as occasional garage seller. But if you are running the eBay store as a business, then you will have to submit the Form 1099-K. And another thing is that your loss or refunds payments are not considered your business income.
According to eBay support, if you meet these limits you will receive a Form 1099-K
- You get more than $20,000 gross payments from the sales
- You had more than 200 transactions
For eBay sellers running their business in Massachusetts and Vermont:
- You will receive the Form 1099-K if your gross payments increase more than $600
- No transaction limit
So, no matter how many number of payments you receive but as they exceed the $600 value, you will receive Form.
Having multiple accounts?
You must be thinking will you receive a separate Form for each store if each of your store meets the above limits? The answer is No. Ebay will basically combine all the sales with the same Tax ID. So, if the combined sales exceeds the above limit of $20000 and 200 transactions, then you will receive a Form for all of your stores separately.
For example, if one of your store make payments of $10000 and the other one also makes a $10000, then you will receive a Form 1099-K for both of your stores separately.
So after analyzing all of the above information, this form is basically for eBay business sellers. Not all of the eBay sellers will receive this form. Only the eBay sellers that have exceeded the above mentioned limits will have to report this form to the IRS. This form is only used to send the information to the IRS about your total income through eBay.
For more information visit our website https://www.estoreseller.com/ or contact us using this form.