Your Form 1099-K isn't a sales report. According to eBay's own Form 1099-K help page, it reports the gross payments eBay processed for you in the calendar year. It excludes sales tax and canceled transactions, makes no deduction for refunds or fees, and dates each payment by when eBay processed it, not when the order was placed.
Your books work differently. They record sales when orders happen, and they record refunds and fees separately. So the two numbers are expected to differ, and a difference on its own doesn't mean anything is wrong. What matters is that you can explain it, line by line. Below is every documented reason for the gap, then a worked reconciliation you can copy for your own year.
What does eBay's 1099-K actually include?
Here's what eBay's help page and the IRS Instructions for Form 1099-K say about the gross amount, and what each point does to the comparison with your books:
| # | What the form does | Source | Effect compared with your sales |
|---|---|---|---|
| 1 | Doesn't subtract refunds | eBay: no adjustments for "credits, discounts, fees, refunds" | Form is higher than your net sales |
| 2 | Doesn't subtract fees | Same eBay sentence | Form is higher than your payouts |
| 3 | Includes shipping the buyer paid | IRS: gross amount is without regard to adjustments for "shipping amounts" | Form includes shipping income |
| 4 | Excludes sales tax | eBay: "sales tax and canceled transactions are excluded" | Form is lower than what buyers paid |
| 5 | Excludes canceled transactions | Same eBay sentence | Canceled orders aren't in it |
| 6 | Dates payments by when eBay processed them | eBay: "based on when gross funds are processed by eBay" | Orders at the year edges can land in the other year |
On the IRS side, the Instructions for Form 1099-K call the gross amount Box 1a and describe it as the total "without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, shipping amounts, or any other amounts."
If you're comparing against a report you downloaded from eBay instead of your own books, check what dates and amounts that report uses first. The Payments tab in Seller Hub offers several reports, including a transaction report, a payout report and a financial statement, and each is a different view of the same activity.
How do you reconcile the 1099-K to your own sales?
Here's an illustration. One seller, tax year 2026, 320 orders. The numbers are made up but realistic.
What the seller's books show for 2026, by order date:
| Amount | |
|---|---|
| Gross sales (item plus shipping) | $24,800.00 |
| Refunds | ($900.00) |
| Net sales | $23,900.00 |
| eBay fees (an expense, recorded separately) | $3,600.00 |
| Sales tax buyers paid (collected and remitted by eBay, not in the books) | $1,984.00 |
Timing at the edges of the year:
- Orders placed December 30 and 31, 2025, whose payments eBay processed in January 2026: $180.00. They're in the seller's 2025 books but on the 2026 form.
- Orders placed December 31, 2026, whose payments eBay processed in January 2027: $210.00. They're in the 2026 books but will be on the 2027 form.
What the 2026 Form 1099-K reports: $24,800.00 + $180.00 − $210.00 = $24,770.00. Shipping is in it. Refunds and fees aren't taken off. Sales tax isn't in it at all.
Now walk from the form to the books, one line per difference:
| Amount | |
|---|---|
| Form 1099-K gross amount | $24,770.00 |
| Add: December 2026 orders eBay processed in January 2027 | +$210.00 |
| Less: December 2025 orders eBay processed in January 2026 | −$180.00 |
| Gross sales in your books | $24,800.00 |
| Less: refunds (your books deduct them; the form doesn't) | −$900.00 |
| Net sales in your books | $23,900.00 |
Every line has a reason you can point to, and the table lands exactly on the figures in the books. That table is the explanation. Keep it with your tax records.
What it doesn't do is tell you which number goes on your return, or how to treat the year-edge orders there. That depends on your accounting method and your situation, and it's the question to take to whoever prepares your return, with this table in hand. Cash vs accrual accounting explains why dates at the edge of the year move numbers between years. This is general information, not tax advice. Check with your accountant.
Two comparisons that look like they should work, and don't:
- If you added up what buyers paid, you'd get $24,800.00 + $1,984.00 = $26,784.00. That $1,984.00 gap is sales tax, which eBay says it excludes from the form. It was never your income; eBay collected it from buyers.
- If you compared the form with your sales after fees, you'd be $3,600.00 further apart. Fees were never taken off the form. They're an expense you record separately, and you can only report them if you recorded them in the first place; see where marketplace fees belong.
Why doesn't it match my bank deposits either?
Because your deposits have had even more taken out. Fees, shipping labels bought through eBay and refunds all come out before eBay pays you, and sales still processing at year end hadn't been paid out yet. So your deposits will usually be lower than the form, and not by any fixed amount. Why your eBay payout is less than your sales works through a week of that to the cent. Deposits are the wrong thing to compare with a 1099-K. Your gross sales are the right thing.
Will I get a 1099-K for 2026?
Under current IRS rules, a payment platform or online marketplace such as eBay has to file a Form 1099-K when your gross payments for the year exceed $20,000 and you have more than 200 transactions. Both conditions must be met. The IRS Instructions for Form 1099-K set out this threshold, and the IRS explains the change: the One, Big, Beautiful Bill reinstated the $20,000 and 200-transaction threshold that was in effect before the American Rescue Plan Act of 2021. eBay's help page lists the same figures.
The seller in the example above crosses both, with $24,770.00 across 320 orders.
Two points from the IRS Understanding your Form 1099-K page are worth knowing:
- You may receive a Form 1099-K even when your payments or transactions are below the threshold.
- Whether or not you receive one, if you sold goods you must still report the income on your tax return.
If the form itself is wrong, for example an amount appears twice, the IRS says to contact the filer named on the form, not the IRS. For eBay, its help page asks sellers to raise concerns about a Form 1099-K no later than March 30, so there's time to review and correct it by April 15.
What records make this easy next year?
The reconciliation above took six lines because the seller's books kept the right things apart. Keep these separately all year:
- Gross sales, including shipping, recorded when orders happen.
- Refunds, as their own line, not netted into sales.
- eBay fees, as expenses, not taken off sales.
- Sales tax that eBay collected, kept out of your sales.
- A note of orders from the last few days of December, with their order dates. Those are your year-edge lines.
With those, the walk from the form to your books is a few minutes' work. Without them, you're trying to rebuild a year from bank deposits, which, as above, can't get you there. Reading your income statement shows where gross sales and refunds sit, and why your payout doesn't match your sales covers the deposit side.
How SalesImporter handles this
SalesImporter connects to eBay today. It records eBay sales gross in an eBay Sales account, refunds in a separate eBay Refunds account, and eBay's fees by type in separate expense accounts, so your Income Statement shows gross sales and refunds on their own lines. Those are the figures a reconciliation like the one above is built from. It doesn't produce a 1099-K reconciliation or prepare tax forms. You, or your preparer, still build the walk from the form to your books, but you start from the right numbers.