1099-K Reconciliation for Amazon Sellers
So you got the infamous 1099-K from Amazon, now what?
Well, the first thing to do is congratulate yourself on a job well done! That’s right. Your unadjusted gross sales were over $20,000 and you had over 200 transactions on Amazon Marketplace or their related services. The next thing you do is look at the total and immediately think, “That’s not right.” Maybe you go to Seller Central and start pulling numbers but soon realize there are no matching figures on any reports from Amazon. Uh, oh. Panic may set in but don’t fret just yet. Now, you may flip the form over and see instructions from Amazon on how to reconcile the total. The problem is the instructions are not very helpful for most people. Often the best Certified Public Accountants can’t sort out the numbers, so you are in good company. Even so, it’s enough to send many sellers into a tailspin of fretting over the implications with no clue how to sort it out.
Gain peace of mind that your annual tax reporting is correct.
We developed a system to reconcile the 1099-K for Amazon sellers and return results within 24 hours. Wow! That’s got to make you smile. With two pieces of information, we will reconcile the numbers and get them right back to you. You’ll receive a pdf copy of the reconciliation you can present to your CPA or file in your tax records. While the 1099-K is for reference only, there is a need to know the accounting is correct for tax purposes and to avoid receiving the IRS notice that your reported income does not match their records. They get a copy of the 1099-K too, so we need to make sure the information filed matches.
Here’s what we need to process your order.
A Date Range Summary Report and your 1099-K. Feel free to redact any personal information on these items. We only need the amounts.
Please email or share via Google Drive with: firstname.lastname@example.org
Please be sure to use your same email address for orders and documents so we can match them. Also, provide your best contact info in the body of your email in case we have questions.
- You can find the 1099-K form in Seller Central. From the Reports section, select Tax Document Library, then the appropriate year, and then Form 1099-K.
- You can find the Date Range Summary Report in Seller Central. From the Reports section, Choose Payments then select Date Range Reports tab, then click Generate Report button, choose Summary radio button, choose the Custom radio button, then choose the Date Range beginning with January 1st and ending with December 31st of the year for the 1099-K in question. Click Refresh on the document line. Once the Download button is visible click it. You will get a pdf of the Summary to send to us.
Bonus P&L with COGS – No Extra Charge
When you place an order for 1099-K Reconciliation and provide needed inventory figures, we will send the report with Cost of Goods Sold figured in to give a Profit and Loss statement for your Amazon Sales.
This statement will only include the sales and selling fees as shown on your Date Range Report provided. There will not be any other expenses listed, such as extensions, software, utilities, etc. It will only include sales less selling expenses and the cost of goods sold.
Here’s what we need to add Cost of Goods Sold to your order.
- Your beginning inventory total in dollars on January 1st or the first day you had inventory in the year in question.
- Your total purchases of inventory in dollars for the entire year
- Your ending inventory total in dollars on December 31st or the last day you did business with Amazon for the year
All three totals are costs, not retail value.
Please include these figures in the email or in a document shared via Google Drive (grant access to email@example.com) with your 1099-K and Date Range Summary Report. To email use firstname.lastname@example.org.
Inventory Lab (IL) users can get the COGS on the final report by providing the Profit & Loss report from IL using January 1st as the beginning date and December 31st as the ending date. Download and send the report with your other reports.
Your CPA will also want to know the Beginning Inventory Value, Ending Inventory Value, COGS, and total Purchases for the tax year.
Inventory Lab users can get all this information included on the report by running another report, along with the Profit & Loss on IL. The Inventory Valuation report on IL needs to be run twice. The first report needs to have the date of the very first day you had inventory on IL. If you had inventory on January 1st of the year in question but did not have Inventory Lab until later in the year, you’ll need the January 1st total for the Beginning Inventory. Otherwise, the IL report will suffice. The second report needs to have December 31st of the year in question for the date. This will give us the Ending Inventory.
Didn’t get a 1099-K, but still need help with your Amazon Sales totals?
Good news. We can use the same reports mentioned above. You will get the pdf report and show how close you came to receive a 1099-K. Your CPA will be so impressed!
Important: Information in this document does not constitute tax or legal advice and must not be used as such. If you have tax or legal questions, please contact your professional adviser.
The reconciliation service is based on instructions from Amazon found on the backside of the 1099K.
Most clients will balance to the penny, however, clients with sales overlapping between December and January will see a difference in their totals. Amazon is aware of this in their reporting and states so on the 1099-K. (see image) Our service can’t reconcile to the penny if Amazon is reporting two different amounts based on year-to-year overlap. There is no refund for this overlap. We will get as close as humanly possible using the two reports Amazon supplies.