Dear Valued Customer:
This message is to inform you that you may receive an IRS Form 1099-K from High Road Holdings, LLC (dba EBTH) (“EBTH”) depending on the volume of your sales on EBTH.com. This message is to provide you information and help you comply with your tax obligations. Form 1099-K is an IRS form for taxpayers to report applicable payment transactions received within a calendar year. Online marketplaces like EBTH are required by federal law to issue a 1099-K to U.S. customers who have received income from online sales over the minimum threshold set by the IRS.
For 2022, the IRS lowered the Form 1099-K reporting threshold so you may receive a Form 1099-K even though your income from online sales is less than previous years. Starting on January 1, 2022, IRS regulations require all businesses that process payments, including online marketplaces like EBTH, to issue a Form 1099-K to customers who receive $600 or more in gross payouts. If you receive $600 or more in gross payouts over the course of the 2022 calendar year, we will have a Form 1099-K available for you digitally and/or postmarked by January 31, 2023. Your 2021 tax obligations are not affected by this change.
We have partnered with a Third Party provider to securely and electronically complete the W-9 form which is used to file the Form 1099-K. A separate communication will be sent that includes the instruction for completing the necessary information. After you provide your tax identification, EBTH will verify it. In order for us to issue your Form 1099-K in time, we will need the W-9 form completed and verified by December 31, 2022.
Although you may receive a 1099-K reporting your gross payouts from EBTH — you only pay taxes on profits. The 1099-K shows your gross receipts, but you are taxed on your net income. You won’t owe any taxes on something you sell for less than what you paid for it. Please consult a tax professional if you have any questions about any tax filing or regulations.
If you have multiple EBTH accounts associated with the same tax identification, your thresholds are calculated by combining all payment transactions. If your combined sales exceed the above thresholds, you will receive a Form 1099-K for each account, even if one or more of the individual accounts do not exceed the IRS reporting thresholds.
For example, you may have two EBTH seller accounts associated with the same tax identification. If you received $400 in payments on one account and $300 on the other, you will receive a separate Form 1099-K for each account.
As Form 1099-K is an IRS information return, it includes the gross amount of all reportable payment transactions within a calendar year, based on when funds settle to EBTH, not necessarily when funds are received by customers. This amount does not include any adjustments, for example, credits, discounts, fees, refunds, or any other adjustable amounts. This means that the gross amount on your Form 1099-K may not be the final reportable amount on your tax return. In addition, Form 1099-K does not include any potential deductions you may have related to the items sold on EBTH, such as the amount you paid for the item. You should consult your tax advisor to determine how best to use the information on your Form 1099-K when filing your personal and/or business income tax return.
Additionally, Form 1099-K does not include sales tax that is collected and remitted by EBTH.
While EBTH is unable to give tax advice to our sellers and customers, we want to help make dealing with taxes as easy as possible. Our goal is to help all sellers, casual or those selling as a business, with these new requirements.
If there is an issue with any information on your Form 1099-K, do not hesitate to contact us at [email protected].
Sincerely,
Your EBTH Family
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