The 1099K shows more than what the deposits in the bank are. The reason is because the 1099K shows the credit card charges that the customer pays.. Ebay withholds funds from the seller for various fees and deposits into the seller's bank account the customer charges minus fees. The deposit into the bank is much less because of the fees withheld. If the IRS matches the 1099K to the S corp income, the income is much lower than the 1099K. Does the IRS match for S corps or only for Sch C filer? And should Gross Receipts on the 1120S be the same as the 1099K ( meaning I gross up the deposits) or can Gross Receipts equal bank deposits ( customer sales-fees)?

George4Tacks

Level 15

Yes. No. Yes.

Gross Income is income before any expenses, which would include fees charged by whoever. Generally speaking Gross Income is more than that reported on 1099s, because most businesses receive income from sources that are not reported on 1099, e.g. cash or check from personal or business accounts.

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