How to report 1099-K when some of the money listed on the 1099-K was sales tax

flip37

I rent out a parking spot using SpotHero. They provided me a 1099-K, but part of the money that went into box 1a (i.e., Gross Amount of payment) is taxes that were paid to the city or state, and some of the money is fees that SpotHero collects. So I take home a little more than half of what is reported in the 1099-K. How do I report that properly such that I am not paying taxes on money I never received?

Henry

Hi flip37! Rental income is generally reported on Schedule E. If your 1099-K is reporting rental income, then you can skip entering that information on the 1099-K screens in the software and go directly to the Schedule E screens to account for your income and expenses (including the taxes and fees you paid).

To do that, go to Income > Business Income > Rental Income (Schedule E). Then answer the questions there as they apply to your situation.

flip37

I think my question may have to do with the FreeTaxUSA form. I don't see a place for entry for sales tax. Revisiting this just now, I do see a space for "Real Estate Taxes" that seems to map to the line 16 of form 1040 (Schedule E) which is simply labelled "Taxes".

So is that correct to assume that I should enter sales tax in the FreeTaxUSA's "Real Estate Taxes" box entry so that it gets mapped to "Taxes"?

Or is there a different place to enter the sales taxes?

Also, it seems that FreeTaxUSA is discounting some of those taxes based on the "Personal Use Days"….even if the sales tax shouldn't be discounted at all since it is paid based on sales

MatthewD

Hi flip37,

Sales tax is not a real estate tax. However you may add it on the Expense section of the Rental Income (Schedule E) as a "Miscellaneous Expenses". Enter a description and the amount. When you enter it as a Miscellaneous Expense it will not be prorated (discounted).