1099K and Sales Tax
I do my own taxes and started Amazon selling in 2021. I didn't receive 1099K for 2021 because I didn't meet the threshold in 2021. I did however receive the it for 2022. I filed an extension in April and the new deadline is now approaching. I have a quick question and hoping to get an easy answer.
Amazon reported Sales tax collected from my customers on 1099-K even though they withheld all of it. When I do my taxes and fill out amazon's 1099-K on my taxes, how do I account for the sales tax? Should I just report as an expense like all the other expenses against my sales?
3 replies
Seller_piroZBunu5OkN
I think I found the answer to my own question. Hope someone can benefit from this:
"Sales Tax Collected
There is another column that Amazon includes in the 1099-K, and that is sales tax collected. Most states require Amazon to collect and remit sales tax for each and every sale made to their state. (As of this writing, this applies to every state but MO.)
Amazon most likely has not remitted any sales tax to you throughout the year (unless you live in MO or have economic nexus there). You never received the sales tax that Amazon collected from your customers, and that amount isn’t income to you.
If you had received sales tax, we would have recorded it as a positive amount on your Balance Sheet. Then when you paid your sales tax, that amount on your Balance Sheet would have been reduced. Sales tax is never income to you.
Sales tax is often included in 1099 figures, but it needs to be adjusted for on your taxes (Schedule C) because you did not actually receive that amount as income.
That’s why it’s important that you understand your numbers. If you report the entire Amazon 1099-K figure from page one as sales income on your Schedule C, you will pay taxes on money that isn’t income and that you never received.
You still have to agree to the 1099-K on Schedule C when you file your taxes, but you must make an adjustment for the sales tax collected amount so that you don’t pay taxes you don’t owe."
Micah_Amazon
Hello @Seller_piroZBunu5OkN,
Thank you for reaching out. Very happy to see you able to find the right resources for tax purposes and answer your own question. Sellers who participate in the Subscribe with Amazon Program are responsible for the collection and payment of any and all Taxes, and agree to comply with the specific terms below.
You are responsible for the documentation and payment of any and all Taxes to the appropriate tax authorities and represent and warrant that you are, and will continue to be, registered to collect, and pay, or will pay, Taxes in those jurisdictions in which you are required to do so and you will provide, upon our request, documents proving such registration or authorization. You hereby acknowledge and agree that we are not responsible for the collection, calculation, payment or remittance of any Taxes to any governmental authority that are or may become payable with respect to any sale of Products by you, and no communications of any kind at any time between you and us or our respective affiliates in connection with this Program Policy will affect your responsibility. All fees, commissions or other amounts payable to us are exclusive of any applicable Taxes and to the extent Taxes are required to be collected or withheld, you will pay such Taxes in addition to the amounts otherwise payable.
You will provide us with all tax collection settings necessary for Amazon to calculate and collect all U.S. sales and use taxes ("Sales Taxes") with respect to sales for which customer purchases are made through a payment mechanism provided by Amazon, including your tax nexus and product tax code assignments, and any other information we request ("Tax Settings") in the format required by Amazon's tax calculation services. We will collect from customers and remit the amounts of Sales Taxes to you, based on your Tax Settings. The tax calculation services are limited to the calculation of all Sales Taxes and do not apply to any other Taxes. We hereby specifically disclaim any responsibility for or obligation to verify, and make and give no representation, warranty, guarantee, advice or guidance regarding, and you hereby acknowledge and agree that no communications of any kind at any time between you and us or our respective affiliates, will be or will be considered or deemed to be representations, warranties, guarantees, advice or guidance of any kind regarding: (a) the accuracy of the tax rules or tax methodology used to collect Sales Taxes, (b) the application of Taxes to your Transactions or Products or of the tax jurisdiction assignment functionality or sales and use tax rates, or (c) whether or not the amounts we collect pursuant to the Subscribe with Amazon Program Agreement will fulfill your obligations to collect Sales Taxes.
Please let me know if you have any additional questions. Please also note that you can reach out to seller support anytime for additional support.
Cheers,
Micah
1099K and Sales Tax
I do my own taxes and started Amazon selling in 2021. I didn't receive 1099K for 2021 because I didn't meet the threshold in 2021. I did however receive the it for 2022. I filed an extension in April and the new deadline is now approaching. I have a quick question and hoping to get an easy answer.
Amazon reported Sales tax collected from my customers on 1099-K even though they withheld all of it. When I do my taxes and fill out amazon's 1099-K on my taxes, how do I account for the sales tax? Should I just report as an expense like all the other expenses against my sales?
1099K and Sales Tax
I do my own taxes and started Amazon selling in 2021. I didn't receive 1099K for 2021 because I didn't meet the threshold in 2021. I did however receive the it for 2022. I filed an extension in April and the new deadline is now approaching. I have a quick question and hoping to get an easy answer.
Amazon reported Sales tax collected from my customers on 1099-K even though they withheld all of it. When I do my taxes and fill out amazon's 1099-K on my taxes, how do I account for the sales tax? Should I just report as an expense like all the other expenses against my sales?
3 replies
3 replies
Seller_piroZBunu5OkN
I think I found the answer to my own question. Hope someone can benefit from this:
"Sales Tax Collected
There is another column that Amazon includes in the 1099-K, and that is sales tax collected. Most states require Amazon to collect and remit sales tax for each and every sale made to their state. (As of this writing, this applies to every state but MO.)
Amazon most likely has not remitted any sales tax to you throughout the year (unless you live in MO or have economic nexus there). You never received the sales tax that Amazon collected from your customers, and that amount isn’t income to you.
If you had received sales tax, we would have recorded it as a positive amount on your Balance Sheet. Then when you paid your sales tax, that amount on your Balance Sheet would have been reduced. Sales tax is never income to you.
Sales tax is often included in 1099 figures, but it needs to be adjusted for on your taxes (Schedule C) because you did not actually receive that amount as income.
That’s why it’s important that you understand your numbers. If you report the entire Amazon 1099-K figure from page one as sales income on your Schedule C, you will pay taxes on money that isn’t income and that you never received.
You still have to agree to the 1099-K on Schedule C when you file your taxes, but you must make an adjustment for the sales tax collected amount so that you don’t pay taxes you don’t owe."
Micah_Amazon
Hello @Seller_piroZBunu5OkN,
Thank you for reaching out. Very happy to see you able to find the right resources for tax purposes and answer your own question. Sellers who participate in the Subscribe with Amazon Program are responsible for the collection and payment of any and all Taxes, and agree to comply with the specific terms below.
You are responsible for the documentation and payment of any and all Taxes to the appropriate tax authorities and represent and warrant that you are, and will continue to be, registered to collect, and pay, or will pay, Taxes in those jurisdictions in which you are required to do so and you will provide, upon our request, documents proving such registration or authorization. You hereby acknowledge and agree that we are not responsible for the collection, calculation, payment or remittance of any Taxes to any governmental authority that are or may become payable with respect to any sale of Products by you, and no communications of any kind at any time between you and us or our respective affiliates in connection with this Program Policy will affect your responsibility. All fees, commissions or other amounts payable to us are exclusive of any applicable Taxes and to the extent Taxes are required to be collected or withheld, you will pay such Taxes in addition to the amounts otherwise payable.
You will provide us with all tax collection settings necessary for Amazon to calculate and collect all U.S. sales and use taxes ("Sales Taxes") with respect to sales for which customer purchases are made through a payment mechanism provided by Amazon, including your tax nexus and product tax code assignments, and any other information we request ("Tax Settings") in the format required by Amazon's tax calculation services. We will collect from customers and remit the amounts of Sales Taxes to you, based on your Tax Settings. The tax calculation services are limited to the calculation of all Sales Taxes and do not apply to any other Taxes. We hereby specifically disclaim any responsibility for or obligation to verify, and make and give no representation, warranty, guarantee, advice or guidance regarding, and you hereby acknowledge and agree that no communications of any kind at any time between you and us or our respective affiliates, will be or will be considered or deemed to be representations, warranties, guarantees, advice or guidance of any kind regarding: (a) the accuracy of the tax rules or tax methodology used to collect Sales Taxes, (b) the application of Taxes to your Transactions or Products or of the tax jurisdiction assignment functionality or sales and use tax rates, or (c) whether or not the amounts we collect pursuant to the Subscribe with Amazon Program Agreement will fulfill your obligations to collect Sales Taxes.
Please let me know if you have any additional questions. Please also note that you can reach out to seller support anytime for additional support.
Cheers,
Micah
Seller_piroZBunu5OkN
I think I found the answer to my own question. Hope someone can benefit from this:
"Sales Tax Collected
There is another column that Amazon includes in the 1099-K, and that is sales tax collected. Most states require Amazon to collect and remit sales tax for each and every sale made to their state. (As of this writing, this applies to every state but MO.)
Amazon most likely has not remitted any sales tax to you throughout the year (unless you live in MO or have economic nexus there). You never received the sales tax that Amazon collected from your customers, and that amount isn’t income to you.
If you had received sales tax, we would have recorded it as a positive amount on your Balance Sheet. Then when you paid your sales tax, that amount on your Balance Sheet would have been reduced. Sales tax is never income to you.
Sales tax is often included in 1099 figures, but it needs to be adjusted for on your taxes (Schedule C) because you did not actually receive that amount as income.
That’s why it’s important that you understand your numbers. If you report the entire Amazon 1099-K figure from page one as sales income on your Schedule C, you will pay taxes on money that isn’t income and that you never received.
You still have to agree to the 1099-K on Schedule C when you file your taxes, but you must make an adjustment for the sales tax collected amount so that you don’t pay taxes you don’t owe."
Seller_piroZBunu5OkN
I think I found the answer to my own question. Hope someone can benefit from this:
"Sales Tax Collected
There is another column that Amazon includes in the 1099-K, and that is sales tax collected. Most states require Amazon to collect and remit sales tax for each and every sale made to their state. (As of this writing, this applies to every state but MO.)
Amazon most likely has not remitted any sales tax to you throughout the year (unless you live in MO or have economic nexus there). You never received the sales tax that Amazon collected from your customers, and that amount isn’t income to you.
If you had received sales tax, we would have recorded it as a positive amount on your Balance Sheet. Then when you paid your sales tax, that amount on your Balance Sheet would have been reduced. Sales tax is never income to you.
Sales tax is often included in 1099 figures, but it needs to be adjusted for on your taxes (Schedule C) because you did not actually receive that amount as income.
That’s why it’s important that you understand your numbers. If you report the entire Amazon 1099-K figure from page one as sales income on your Schedule C, you will pay taxes on money that isn’t income and that you never received.
You still have to agree to the 1099-K on Schedule C when you file your taxes, but you must make an adjustment for the sales tax collected amount so that you don’t pay taxes you don’t owe."
Micah_Amazon
Hello @Seller_piroZBunu5OkN,
Thank you for reaching out. Very happy to see you able to find the right resources for tax purposes and answer your own question. Sellers who participate in the Subscribe with Amazon Program are responsible for the collection and payment of any and all Taxes, and agree to comply with the specific terms below.
You are responsible for the documentation and payment of any and all Taxes to the appropriate tax authorities and represent and warrant that you are, and will continue to be, registered to collect, and pay, or will pay, Taxes in those jurisdictions in which you are required to do so and you will provide, upon our request, documents proving such registration or authorization. You hereby acknowledge and agree that we are not responsible for the collection, calculation, payment or remittance of any Taxes to any governmental authority that are or may become payable with respect to any sale of Products by you, and no communications of any kind at any time between you and us or our respective affiliates in connection with this Program Policy will affect your responsibility. All fees, commissions or other amounts payable to us are exclusive of any applicable Taxes and to the extent Taxes are required to be collected or withheld, you will pay such Taxes in addition to the amounts otherwise payable.
You will provide us with all tax collection settings necessary for Amazon to calculate and collect all U.S. sales and use taxes ("Sales Taxes") with respect to sales for which customer purchases are made through a payment mechanism provided by Amazon, including your tax nexus and product tax code assignments, and any other information we request ("Tax Settings") in the format required by Amazon's tax calculation services. We will collect from customers and remit the amounts of Sales Taxes to you, based on your Tax Settings. The tax calculation services are limited to the calculation of all Sales Taxes and do not apply to any other Taxes. We hereby specifically disclaim any responsibility for or obligation to verify, and make and give no representation, warranty, guarantee, advice or guidance regarding, and you hereby acknowledge and agree that no communications of any kind at any time between you and us or our respective affiliates, will be or will be considered or deemed to be representations, warranties, guarantees, advice or guidance of any kind regarding: (a) the accuracy of the tax rules or tax methodology used to collect Sales Taxes, (b) the application of Taxes to your Transactions or Products or of the tax jurisdiction assignment functionality or sales and use tax rates, or (c) whether or not the amounts we collect pursuant to the Subscribe with Amazon Program Agreement will fulfill your obligations to collect Sales Taxes.
Please let me know if you have any additional questions. Please also note that you can reach out to seller support anytime for additional support.
Cheers,
Micah
Micah_Amazon
Hello @Seller_piroZBunu5OkN,
Thank you for reaching out. Very happy to see you able to find the right resources for tax purposes and answer your own question. Sellers who participate in the Subscribe with Amazon Program are responsible for the collection and payment of any and all Taxes, and agree to comply with the specific terms below.
You are responsible for the documentation and payment of any and all Taxes to the appropriate tax authorities and represent and warrant that you are, and will continue to be, registered to collect, and pay, or will pay, Taxes in those jurisdictions in which you are required to do so and you will provide, upon our request, documents proving such registration or authorization. You hereby acknowledge and agree that we are not responsible for the collection, calculation, payment or remittance of any Taxes to any governmental authority that are or may become payable with respect to any sale of Products by you, and no communications of any kind at any time between you and us or our respective affiliates in connection with this Program Policy will affect your responsibility. All fees, commissions or other amounts payable to us are exclusive of any applicable Taxes and to the extent Taxes are required to be collected or withheld, you will pay such Taxes in addition to the amounts otherwise payable.
You will provide us with all tax collection settings necessary for Amazon to calculate and collect all U.S. sales and use taxes ("Sales Taxes") with respect to sales for which customer purchases are made through a payment mechanism provided by Amazon, including your tax nexus and product tax code assignments, and any other information we request ("Tax Settings") in the format required by Amazon's tax calculation services. We will collect from customers and remit the amounts of Sales Taxes to you, based on your Tax Settings. The tax calculation services are limited to the calculation of all Sales Taxes and do not apply to any other Taxes. We hereby specifically disclaim any responsibility for or obligation to verify, and make and give no representation, warranty, guarantee, advice or guidance regarding, and you hereby acknowledge and agree that no communications of any kind at any time between you and us or our respective affiliates, will be or will be considered or deemed to be representations, warranties, guarantees, advice or guidance of any kind regarding: (a) the accuracy of the tax rules or tax methodology used to collect Sales Taxes, (b) the application of Taxes to your Transactions or Products or of the tax jurisdiction assignment functionality or sales and use tax rates, or (c) whether or not the amounts we collect pursuant to the Subscribe with Amazon Program Agreement will fulfill your obligations to collect Sales Taxes.
Please let me know if you have any additional questions. Please also note that you can reach out to seller support anytime for additional support.
Cheers,
Micah
