Reseller Tax Law change for 1099s in new Fed Relief Bill

[coastaltechsolution]

Looks like the law will change on the Federal level that next year (Jan 2022) $600 is the 1099 limit 

No biggie to me as I report all income but get ready for the influx of postings coming  

congress.gov/bill/117th-congress/house-bill/1319 

[releasethekraken_1]

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@shellhut wrote:

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Somewhere along the line there will be more money for the IRS in some budget.

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It is still going to be a problem for the IRS.  They still will have to add servers, computers and people.  As will eBay and Pay Pal.  Fees going up!

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Why would PayPal have to add servers to send more 1099k data? Aside from transmitting a larger file, what changes? Even if they're storing 1099k images, that's a storage issue, not a server issue.

[readabouthorses]

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@releasethekraken_1 wrote:

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@readabouthorses wrote:

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@shellhut wrote:

Can you imagine the MILLIONS of 1099's eBay is going to have to produce and send out? (Not sure if they can send them digitally).  Bet they are rethinking Managed Payments now!  The burden would have been left to Pay Pal.  But of course eBay never back peddles.  When they had to collect taxes for the states and sending them to the states, fees went up because of that.  And watch those eBay fees go up even more because  of this new law.

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And think of all the extra 1099's the IRS will receive. Will they have to hire extra workers to process all the data? What if everyone who received a 1099 for a small amount, say $600 to $1000, decides to file a paper tax return?  Would the extra amount of workers needed to process all that be worth the little bit of tax dollars they might collect? Did they even consider all that?

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All that data is processed with minimal human intervention. The data is sent electronically by Adyen, PayPal, etc. to the IRS, and 73% of tax returns are filed electronically, probably more like 90%+ for returns with a Schedule C. Identifying returns for audit is also done electronically. The only labor-intensive part is performing the audit, and that's a money-maker for the IRS.

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But what if all the people who are upset getting this 1099 decide to file their taxes as a paper return? I don't think there is any requirement that your return be filed electronically. Maybe they are not doing it as a paper return now but I'm talking what if they do it as a revolt. Could the IRS suddenly handle millions of paper returns with the same staff they have now?

And let's talk audits ... is there not an amount that just isn't worth chasing? They certainly must do a cost analysis to see if it is worth it. 

[releasethekraken_1]

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@readabouthorses wrote:

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But what if all the people who are upset getting this 1099 decide to file their taxes as a paper return? I don't think there is any requirement that your return be filed electronically. Maybe they are not doing it as a paper return now but I'm talking what if they do it as a revolt. Could the IRS suddenly handle millions of paper returns with the same staff they have now?

And let's talk audits ... is there not an amount that just isn't worth chasing? They certainly must do a cost analysis to see if it is worth it. 

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If there's a revolt, it won't be people inconveniencing themselves by switching to paper. That would be bizarre. If people want to revolt, they'll do it by not filing the Schedule C at all. That will be an even bigger money maker for the IRS when they apply penalties.

Yes, I'm sure they do cost analysis, and just because Congress picked $600 doesn't mean the IRS is going to enforce $600.

[postingid7659]

Dude how about you take your own advice, like I said already?  If you don't like appropriate responses to your posts, don't post.  It's a public forum and so long as I don't violate the rules I can express my opinion of you and your blatant hypocrisy all I want.  

[postingid7659]

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@iart wrote:

The way we look at it, people not paying taxes on ebay sales have been stealing from us! We have to compete with them and they have granted themselves an unfair and dishonest advantage.

And it's not just the money. It's all the record keeping, quarterly payments, Accountant costs...

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Explain how a seller paying or not paying taxes affects the price the items sell for please.  In detail.  Because the buyers have no way to know who does or doesn't pay.  They just pick the cheapest price.   Nobody is out there selling things for less than they'll bring unless they have a bill they need to pay right away and have to have some turnover.  

[powell-memorabilia]

@postingid7659 
It is a long term effect.  Everyone has a formal or informal $x for y work equation.  If two sellers each have a $20 profit opportunity, tax paying seller might not take that opportunity if he’s going to clear $14 after taxes, whilst the tax avoider is happy to take that $20 opportunity, because he keeps the entire $20.

[postingid7659]

Sounds like personal choices and what seller A does is utterly irrelevant to what seller B does since neither one has any idea each other even exists.   The idea that one is somehow stealing from the other by the choices of what they pay or not pay, or take a risk over, is downright wacko.  

[powell-memorabilia]

@postingid7659 

They don’t have to know about each other.  How many “I don’t know if it is worth it anymore” stories do we need to hear to understand that the eBay equation isn’t working out well for some sellers?  

When these sellers go from an effective $20 and hour gig to $14, some will stay and have less money at the end of the year, some will raise their prices to get the same net pay per work unit, and some will stop selling.  

Overall, it is a loss of sellers, a lifting of prices, and an even playing field for nearly all of us.  

[jajad2008]

Put the blame on the correct party.

Republicans get us in the mess and Dems have to solve the problems

The 1% still will have thier loopholes

[jajad2008]

Thanks Republicans you got us in this mess

[auctionpet]

They need the money to support all the illegals Biden let cross the border and the American taxpayer is now supporting. Free food, lodging and health care for them coming right out of our pockets!! Basically coming up with anything they can to support the masses coming to the US illegally, if it's supposed to be free to live here, then they owe their citizens a heck of alot of $$$!!

[divwido]

Its  creating equality between the business owner in retail and the online seller.

And anyone who does declare their sales under schedule C is in for a rude (and overdue) awakening.

[bearswatching]

Late to the party on this, but that’s EXACTLY why EBay fought this tax change tooth and nail.  I don’t think it will be “some” small sellers who leave but tens of thousands. I could be wrong but guess we will never know the exact numbers. The thought of a long form and a schedule C probably strikes terror in the heart of many.

[dbfolks166mt]

     You may also want to check your state laws to see if they have passed anything that will supersede the federal requirement in 2022. A lot of states have passed their own 1099 reporting laws that are already in effect. I am in Virginia and received several 1099's last year because I was over the state limit of $600 and 0 transactions. 

     I had some difficulty sorting out the 1099 numbers between receipts from friends and family and revenue from sales but finally got the numbers in balance. 

[releasethekraken_1]

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@bearswatching wrote:

Late to the party on this, but that’s EXACTLY why EBay fought this tax change tooth and nail.  I don’t think it will be “some” small sellers who leave but tens of thousands. I could be wrong but guess we will never know the exact numbers. The thought of a long form and a schedule C probably strikes terror in the heart of many.

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eBay fought the sales tax change, not the 1099 change. That happened almost overnight.