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Trying to Confirm Paypal Numbers on 1099-K


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So I had a question as I am trying to finish getting things together for Tax season.

 

I went through my sales and everything and calculated it up. Its a little bit lower than Paypals 1099K number.

 

However I know this is a gross amount which doesn't take out refunds, credits, etc. for all sorts of other stuff. How does everyone add these up? 

 

Is there a section in Paypal where you can see all the categories like How much you received in Chargebacks? Or Reversals etc.?

 

 

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I wondered the same thing. When I got a email say I got a refund last month I checked my balance and it was reflecting the refund but there was no activity for that day. If I remember right I went back to the initial date of the transaction that was refunded and it showed it there. I also carried the refund on my sales spreadsheet just so I knew it would be included in my end of year total into PayPal. I am also curious to see if there is a category for chargebacks ect

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I wondered the same thing. When I got a email say I got a refund last month I checked my balance and it was reflecting the refund but there was no activity for that day. If I remember right I went back to the initial date of the transaction that was refunded and it showed it there. I also carried the refund on my sales spreadsheet just so I knew it would be included in my end of year total into PayPal. I am also curious to see if there is a category for chargebacks ect

 

So in the Annual report it lists all these categories and Paypal says they don't net anything out.

 

The part that is confusing the crap out of me is that the columns don't add up (its a bit more) to what is on the 1099K. So there has to be some field or something not there that makes it add correctly. I got my sales numbers correct. But I can't find the rest of the info.

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Just use the paypal number for gross sales (because that's what's reported to irs) and use the difference as an expense (either refunds/discounts or another cost-of-goods-sold) to bring the revenue number down to what your records show.

---Keep it secret. Keep it safe.---

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Just use the paypal number for gross sales (because that's what's reported to irs) and use the difference as an expense (either refunds/discounts or another cost-of-goods-sold) to bring the revenue number down to what your records show.

---Keep it secret. Keep it safe.---

This. I Basically take everything out like refunds shipments etc. as expenses. And yes, without a doubt paypal DOES NOT give easy access to critical numbers for any of us who take payments through them

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Just use the paypal number for gross sales (because that's what's reported to irs) and use the difference as an expense (either refunds/discounts or another cost-of-goods-sold) to bring the revenue number down to what your records show.

---Keep it secret. Keep it safe.---

 

 

This. I Basically take everything out like refunds shipments etc. as expenses. And yes, without a doubt paypal DOES NOT give easy access to critical numbers for any of us who take payments through them

 

Sweet - I was gonna do this but I didn't want to just go - "Whatever the hell this is".

 

Uh I am learning that Parting minifigures out is a ***** at tax time. I don't know how Bricklink people who sell piece by piece can do it. Averages I guess. Uhhh.

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If you receive Cashback from certain unnamed websites, it is included in that 1099K total provided by Paypal.

 

If you have your data in excel, filter incoming payments for Payment Type = Payment Received to see incoming payments that were rec'd through means other than eBay checkout.

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DNIM, averages are it exactly. Figure out what your average cost per minifig is and your average price realized for a minifig is and use those numbers. Figure out what your average cost and price realized per "other hunk of set" is (piece count is a good way to do this) and use those numbers.

 

For my store, I average my minifig costs and prices realized, and then average the cost of all other pieces costs and prices realized.

 

If it's a fair system that isn't trying to wiggle out of taxes owed, the IRS will generally accept this kind of averaging.

 

For PayPal, yes, report their gross number and then make all your deductions. If you are off a few dollars you can't account for or make sense of, make it in the IRS' favor and you won't have a problem.

 

Edited to add: those averages are most helpful when valuing inventory left on hand after December 31, since that has to show up on the return, too, and reduces your cost of goods sold.

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DNIM, averages are it exactly. Figure out what your average cost per minifig is and your average price realized for a minifig is and use those numbers. Figure out what your average cost and price realized per "other hunk of set" is (piece count is a good way to do this) and use those numbers.

 

For my store, I average my minifig costs and prices realized, and then average the cost of all other pieces costs and prices realized.

 

If it's a fair system that isn't trying to wiggle out of taxes owed, the IRS will generally accept this kind of averaging.

 

For PayPal, yes, report their gross number and then make all your deductions. If you are off a few dollars you can't account for or make sense of, make it in the IRS' favor and you won't have a problem.

 

Edited to add: those averages are most helpful when valuing inventory left on hand after December 31, since that has to show up on the return, too, and reduces your cost of goods sold.

 

Yeah I am doing it right now per set so I can get a good idea of what sets do the best. Takes a little longer but it looks better to me. 

 

Next year is gonna be so much better because I will actually have an idea whats going on. lol.

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  • 7 years later...
On 3/8/2014 at 7:20 PM, justafrog said:

DNIM, averages are it exactly. Figure out what your average cost per minifig is and your average price realized for a minifig is and use those numbers. Figure out what your average cost and price realized per "other hunk of set" is (piece count is a good way to do this) and use those numbers.

 

For my store, I average my minifig costs and prices realized, and then average the cost of all other pieces costs and prices realized.

 

If it's a fair system that isn't trying to wiggle out of taxes owed, the IRS will generally accept this kind of averaging.

 

For PayPal, yes, report their gross number and then make all your deductions. If you are off a few dollars you can't account for or make sense of, make it in the IRS' favor and you won't have a problem.

 

Edited to add: those averages are most helpful when valuing inventory left on hand after December 31, since that has to show up on the return, too, and reduces your cost of goods sold.

DNIM, how do you figure out the average cost of a minifigure?  They are buried in sets.  If I assign the LEGO value of $4.99, and a set is heavy with minifigures and low on parts, this can cause the remaining part value to be very low.  Does that make sense?  New seller and trying to figure all of this out.  Thanks!

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On 10/9/2021 at 3:37 AM, LegoLover2029 said:

DNIM, how do you figure out the average cost of a minifigure?  They are buried in sets.  If I assign the LEGO value of $4.99, and a set is heavy with minifigures and low on parts, this can cause the remaining part value to be very low.  Does that make sense?  New seller and trying to figure all of this out.  Thanks!

If you have a reasonable knowledge of LEGO values, you can proportionately distribute the cost of a specific item within a lot. If you don't have that knowledge, it would be difficult.

It also helps if you brain works a little like this:

 

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