How to Get a 1099 from eBay: The Definitive Guide for Sellers

Let’s cut to the chase. How do you get a 1099 from eBay? eBay issues a Form 1099-K to sellers who meet certain thresholds for sales volume and payment processing. If, during the calendar year, you exceeded $20,000 in gross payment volume AND had more than 200 transactions, eBay is legally obligated to send you a 1099-K form. You’ll typically find this form available electronically in your eBay account by January 31st of the following year. If you haven’t met these criteria, you generally won’t receive one, though it’s always wise to meticulously track your sales independently for tax purposes.

Understanding the eBay 1099-K Form

Think of the 1099-K as a financial report card from eBay, summarizing your sales activity through their platform. This form isn’t just a formality; it’s a critical document that the IRS also receives, meaning it’s essential to ensure your tax return accurately reflects the information reported on it. Failing to do so can raise red flags and potentially trigger an audit.

What Information Does the 1099-K Contain?

The 1099-K form includes several key pieces of information:

• Your Taxpayer Identification Number (TIN): This is typically your Social Security Number (SSN) if you operate as an individual, or your Employer Identification Number (EIN) if you run a business.
• Gross Payment Volume: The total amount of all reportable payment transactions for the year, before deductions for fees, refunds, or shipping costs.
• Number of Payment Transactions: The total count of transactions processed through eBay’s payment system.
• eBay’s Contact Information: Including their address and phone number.
• Payment Settlement Entity’s Name and TIN: Information about the entity processing the payments (e.g., eBay Managed Payments).
• Months with Payment Activity: This indicates the months in which you had payment transactions processed through eBay.

Accessing Your 1099-K on eBay

eBay has streamlined the process for accessing your 1099-K. Here’s how you can find it:

1. Log in to your eBay account. Use the same credentials you use for selling.
2. Navigate to your Seller Hub. This is your central command center for managing your eBay business.
3. Look for the “Payments” or “Financials” section. The exact wording may vary slightly depending on eBay’s updates.
4. Find the “Tax Documents” or “1099-K” section. This is where eBay stores your tax forms.
5. Download your 1099-K form. The form is typically available in PDF format.

If you are having trouble finding the 1099-K form, look for a banner at the top of the Seller Hub that will easily direct you to the Tax Documents page.

What to Do if You Don’t Receive a 1099-K

If you believe you should have received a 1099-K but haven’t, here’s what to do:

1. Double-check your sales records. Confirm that you met both the $20,000 gross payment volume AND 200 transaction threshold.
2. Verify your tax information on eBay. Ensure your SSN or EIN is accurate and up-to-date. Incorrect information can prevent eBay from issuing the form.
3. Contact eBay customer support. They can investigate why you haven’t received the form and provide guidance.
4. Consider requesting a transcript from the IRS. As a last resort, you can request a Wage and Income Transcript from the IRS, which may contain information reported to them by eBay.

Frequently Asked Questions (FAQs)

Here are some frequently asked questions that should clear any remaining doubts:

1. What happens if I don’t report the income from my eBay 1099-K on my tax return?

   The IRS receives a copy of every 1099-K issued. Failing to report the income can trigger an audit or a notice from the IRS requesting clarification. It’s crucial to accurately report all income.

2. Can I deduct business expenses related to my eBay sales?

   Absolutely! You can deduct legitimate business expenses, such as the cost of goods sold, shipping supplies, eBay fees, and advertising. Maintaining detailed records is crucial for substantiating these deductions.

3. What if the amount on my 1099-K is incorrect?

   First, carefully review your own sales records to identify any discrepancies. If you find an error, contact eBay immediately. They may issue a corrected 1099-K. Document all communication with eBay.

4. Do I need to file a 1099-K even if my eBay sales are just a side hustle?

   Yes, if you meet the threshold criteria. Whether it’s a full-time business or a side hustle, the IRS treats the income the same.

5. Does the 1099-K include sales tax I collected?

   The 1099-K reports gross payment volume, which includes sales tax. However, you should not be taxed on the sales tax collected, as you are merely holding it in trust for the government. You will report the tax amount in a different line when you file your sales tax returns with the state/local government. Consult a tax professional on how to handle this correctly.

6. What if I sell on multiple platforms besides eBay?

   Each platform that meets the 1099-K threshold will issue a separate 1099-K. You must report all income from all platforms on your tax return.

7. How long should I keep my eBay sales records?

   The IRS generally recommends keeping tax records for at least three years from the date you filed your return, or two years from the date you paid the tax, whichever is later. However, in complex situations, retaining records for longer may be advisable.

8. What if I only sold used items on eBay? Is that still taxable?

   Generally, yes. The proceeds from selling used items are still considered taxable income, especially if you are consistently selling items. If you are selling personal items at a loss (selling for less than you originally purchased them for), it may be considered a personal sale, but this can be tricky. Consult with a tax professional.

9. Does eBay report sales to my state as well as the IRS?

   Yes, in most cases. eBay typically reports sales information to both the IRS and the relevant state tax authorities.

10. I received a 1099-K, but I think it includes payments that were actually refunds. What do I do?

    This is a critical issue. You need to reconcile your records with the 1099-K and identify the specific transactions that were refunds. You can then deduct the amount of the refunds on Schedule C (Profit or Loss From Business) of your tax return. Make sure to keep thorough documentation.

11. What is the new 1099-K threshold for 2024 and beyond?

    Although the American Rescue Plan Act of 2021 reduced the 1099-K threshold to $600, the IRS has delayed implementation of the lower threshold. For the 2023 tax year, the threshold remained at $20,000 and 200 transactions. The IRS is planning for a $5,000 threshold for 2024, however it is subject to change and the lower threshold is not in effect currently. Always check the latest IRS guidance to confirm the current reporting thresholds for the tax year.

12. Should I consult with a tax professional regarding my eBay sales?

    Absolutely! Given the complexities of tax laws and the potential for deductions, consulting with a qualified tax professional is always a wise investment. They can provide personalized advice tailored to your specific situation and help you optimize your tax strategy.

Navigating the world of eBay taxes doesn’t have to be daunting. By understanding the 1099-K form, keeping accurate records, and seeking professional advice when needed, you can confidently manage your tax obligations and focus on growing your eBay business.