1099K PSE WITH AMZ ONLINE SALES-PERSON

[Jiong_jiong]

HELLO, 

MY CLIENT BROUGHT IN FORM 1099K WITH PSE, 3RD PARTY CHECKED.  THE GROSS SALE ($) IS UNADJUSTED WITH CALCULATED ON THE BACK PAGE OF THE FORM 1099K. TO CONSIDERATION TO  CALCULATE THE COST OF GOOD SOLD ON SCHDULE. C, PROFIT OR LOSS FROM BUSINESS; AND/OR CAN BE CALCULATE THE SCHEDULE. D CAPITAL GAIN OR LOSSES.

MY QUESTIONS:

1- HOW TO IDENTIFY THESE CATEGORIES TO CALCULATE THE COGS OF THE PRODUCT SALES,  SHIPPING CREDIT,  GIFT WRAP CREDIT, PROMOTION REBATES, SALES TAX COLLECTED?                     

2- THE CLIENT HAD PAID ATTORNEY FEES IN ORDER TO BECOME LEGAL US CITIZEN,  THE PAID FEES CAN BE ELIGIBLE TO EXPENSE DEDUCT OR NOT?

I LOOK FORWARD TO HAVE SOME REFERENCES, THANK YOU!

[qbteachmt · Accepted solution]

First, please STOP SHOUTING on the internet by using Mixed Case text, so that this is easier to read. It's a Discussion, not a DEMAND.

Next, a 1099-K is an Activity report. It is a result of enough financial activity run through a Payment Settlement Entity (PSE) that it meets a reporting requirement. Example: your client had over $20,000 in sales through eBay or PayPal, but for PayPal, it doesn't even mean it was all Sales. It was Activity that met the reporting threshold (minimums).

So, you review if this client is in business. If this client is in business, you are going to prepare a business income tax return based on their business entity type.

You are going to use their business records for Cost of Goods Sold and for other expenses. Schedules such as D and other tax forms will be required based on the types of activities, assets, liabilities, etc, that they have, in addition to regular operating expenses.

The 1099-K is for NONE of this. For instance, Sales Tax Collected results in more financial activity, but that is not Income to your client and it is not Expense for your client. We collect sales taxes from customers as a liability to forward taxes to the taxing authority.

Citizenship is Personal, not tax deductible and not business expense, unless legal fees are incurred to get workers for the business. Example:

https://ttlc.intuit.com/community/taxes/discussion/is-uscis-employment-authorization-fees-are-deduct...

It seems you might be a bit over your head for tax preparation. Do you have someone that can mentor you?