Amazon 1099-K reconciliation

Summary of research steps taken and analysis: 1) Performed targeted web searches (IRS, Amazon Seller Central, state DOR resources, major tax/commerce services) to gather official guidance and reputable practical guidance covering: federal Form 1099-K reporting thresholds and recent legislative/regulatory changes; Amazon’s documentation on 1099-K and settlement/transaction reports; reconciliation methods used by sellers and accounting firms; and state-level marketplace facilitator / sales tax rules that affect Amazon sellers. 2) Prioritized sources: IRS newsroom & FAQs and IRS Fact Sheet (official federal guidance); Amazon help pages and Seller Central forum posts (practical steps and which Seller Central reports map to box 1a); state guidance compilations (Avalara and Streamlined Sales Tax) and relevant tax professional guides for marketplace facilitator rules and economic nexus thresholds.

Key findings (condensed): - Who gets a Form 1099-K from Amazon: Historically the reporting threshold for third-party settlement organizations was more-than-$20,000 AND more-than-200 transactions. The American Rescue Plan Act (ARPA) originally changed statutory reporting to $600 with no minimum transactions, but IRS implementation and subsequent legislation/regulatory action have evolved.

The IRS issued FAQs and fact sheet reflecting that the dollar limit reverted to $20,000 and the 200-transaction rule following the One Big Beautiful Bill (IRS announcement IR-2025-107). Sellers should rely on current IRS guidance for the applicable tax year and check Seller Central for which sellers receive a 1099-K. - How Amazon’s 1099-K amount (box 1a) is built and how to reconcile it: Amazon’s 1099-K box 1a (Gross amount of payment card/third party network transactions) generally equals the sum of specific entries on Amazon’s 12-month Summary or Date Range Transaction Reports.

Practical, commonly cited reconciliation components to add/subtract to reach box 1a are:

Product sales (non‑FBA)

FBA product sales

Shipping credits

Gift wrap credits

Product, shipping, and gift‑wrap taxes & regulatory fees collected

Promotional rebates/refunds (usually a negative number) Sellers (and many CPAs) generate a full-year Date Range Transaction Report (or Summary Report) from Seller Central and total the above line items; that total normally matches box 1a or is very close. Small discrepancies commonly arise from differences in time windows between reports or rounding. Report income based on your books and supporting Amazon transaction reports; keep copies of the Date Range/Settlement reports as supporting documentation. - Common causes of discrepancies and practical resolution steps

* Timing mismatches between Amazon report date windows and the IRS’s calendar-year aggregation. Use Amazon’s 12-month Date Range Transaction Report covering the same calendar-year period as the 1099-K to minimize timing differences. * Sales tax appears in box 1a (because Amazon processed the payment) but you never received those funds (Amazon remitted tax to the state). Treat sales tax collected and remitted by Amazon as a liability/expense in your books (i.e., exclude it from net revenue for taxable income calculations) and record the corresponding tax collection/ remittance entries. * Refunds, chargebacks, reimbursements, and promotional rebates: ensure refunds are subtracted (promotional rebates often listed as negative) when reconciling. Amazon’s Date Range/Settlement reports label these items; include them correctly. * Marketplace/fee offsets: Amazon fees are not part of box 1a; fees reduce your net proceeds but do not change gross receipts reported on 1099-K. If the 1099-K materially differs from your calculations: - Re-check your Date Range Transaction Report totals and the specific line items listed above. - Collect monthly Date Range reports (12 monthly reports or a full-year summary) to demonstrate the composition of box 1a. - Open a Seller Central support case to request clarification or a corrected tax document from Amazon if you believe Amazon’s reporting is in error. - Work with a qualified CPA/tax advisor before amending federal returns or responding to IRS correspondence. - State-specific compliance (marketplace facilitator and sales tax): * Nearly all U.S. states have enacted marketplace facilitator laws that require marketplace platforms (like Amazon) to collect and remit sales tax on marketplace sales (Avalara and Streamlined Sales Tax maintain state-by-state guidance). These laws shift the sales-tax collection duty to Amazon for sales made through the marketplace in jurisdictions where facilitator rules apply. * Even where Amazon collects and remits sales tax, sellers should verify whether they still have state obligations (for example: registration, filing zero returns, reporting non‑collecting seller use tax historically, or sales made outside the marketplace). Economic nexus thresholds still matter for sales you make outside Amazon and for marketplace sellers in some states that require registration or reporting. - Practical workflow and bookkeeping recommendations: 1. Verify your tax identity interview settings in Seller Central (W‑9/W‑8 and primary user) so Amazon has correct TIN/name when issuing 1099-K. 2. Download: (a) the Form 1099‑K from Seller Central (Tax Document Library) and (b) full-year Date Range Transaction/Summary Report(s) covering the same calendar year. 3. Reconcile by summing the Date Range line items listed above to match box 1a. Note and document timing differences if any.

Adjust your accounting records

record gross sales, separately record sales tax collected (and Amazon’s remittance), record Amazon fees and reimbursements/refunds.

Keep detailed records (monthly Date Range reports, settlement reports, refund/adjustment records, and bank deposits) for audit support.

Use accounting software (QuickBooks, Xero) or marketplace accounting tools that can import Amazon settlement reports and map line items properly to ledger accounts.

If the 1099‑K is incorrect, open a Seller Central support case to request a corrected form; consult a CPA before contacting the IRS. Actionable checklist for Amazon sellers (LLC owners / US business owners)

- Verify whether you meet the reporting thresholds for the tax year in question (consult current IRS guidance and Seller Central notices). - Complete/verify Seller Central tax interview and TIN on file. - Download the 12‑month Date Range Transaction Report / Summary Report and the 1099‑K. - Reconcile: sum the listed line items to match box 1a; identify and document any timing differences. - Record sales tax separately in your books (sales tax collected and remitted by Amazon is not taxable income for you). - Keep all Amazon reports and bank records; retain supporting documentation for at least 3–7 years. - If discrepancies remain, open Seller Central support case and engage a CPA. Limitations and governor notes: - State sales tax rules and marketplace facilitator details vary by state and change frequently. Sellers should confirm current state DOR guidance where they have nexus or sales. - Federal 1099‑K statutory/reporting thresholds have changed several times in recent years (ARPA, IRS guidance, subsequent legislation/regulatory updates). Rely on the IRS website and your tax advisor for the correct threshold that applies to the tax year you are filing.