Are you a professional seller on Amazon? Or maybe you sold off a few personal items last year? Either way, you may be wondering if you need to report those earnings to the IRS this tax season.
We’re here to answer those questions for you as you get busy with those tax forms. Below are some tips for making sure your forms are in order with all qualifying deductibles in place.
1. The 1099-K Form Is Your Best Friend.
The 1099-K is a sales reporting form that provides the IRS with your monthly and annual gross sales information. This includes things like sales tax and shipping fees. Individual online sellers are not responsible for filling out a 1099-K; the form will be filled out by Amazon, who is required to provide the 1099-K to both the IRS and sellers if they meet certain criteria.
Who Gets a 1099-K from Amazon?
According to Amazon, all sellers who meet both of the following conditions will get their 1099-K form in the mail (or by email, depending on your preferences) by January 31:
- More than $20,000 in unadjusted gross sales, and
- More than 200 transactions.
If you don’t meet the above criteria but are a professional seller or an individual seller with more than 50 transactions in a year, you still need to provide your tax information to Amazon, or risk losing your seller status. Though this isn’t a requirement from the IRS, Amazon does this to ensure they have everyone’s tax information so that they can comply with all IRS regulations.
You can provide this information in your Seller Account under “Tax Information.”
How Do I Access My 1099-K on Amazon?
If you’d like to see the form on Amazon, you can go to Seller Central -> Reports -> Tax Document Library. You will only see the 1099-K if you have more than 200 transactions and at least $20,000 in gross sales for the year.
What If I Don’t Receive a 1099-K From Amazon?
If you think you meet the above conditions but did not receive a 1099-K form from Amazon, and cannot find it on Seller Central, contact Seller Support.
If you made a profit on Amazon, you will need to report the income whether you received a 1099 or not. One exception is if you used Amazon to sell of a few household items for less than the original purchase price.
If your online auction sales are the Internet equivalent of an occasional garage or yard sale, you generally do not have to report the sales. In a garage sale, you generally sell household items you purchased over the years and used personally. If you paid more for the items than you sell them for, the sales are not reportable. Losses on personal use property are not deductible, either.
You can read more about how the IRS determines income tax requirements for online selling here.
What If My 1099-K Is Inaccurate?
First, make sure that you are comparing unadjusted total gross sales for the year, based on shipping dates rather than sale dates. For example, if you sold the item on December 31, but shipped it on January 1, the amount will show up in January and not December.
If you want to double check the amount shown on the 1099-K, you can go to the “Data Range Reports” page on Seller Central and follow these steps: