SELLERS NEW 2022 LAW EVERYONE will most likely get a 1099

[spirit-n-history]

Starting on Jan 1, 2022, eBay and other marketplaces are required by the IRS to issue a Form 1099-K for all sellers who receive $600 or more in sales.  For the People who are saying it's no different you are INCORRECT, the law now will require people to 1.  track every sale  2.  determine if the sale was profitable,  3. or prove if they sold the item for less than it's purchase price, 4. or prove the item was an inheritance and the value at the time of death is the same or higher at the time of sale, 5.  track any expenses (fees, mileage to/from Post Office, receipts for Packing Supplies, internet expenses etc etc to offset the FEW items sold that might have been profitable, WHEREAS sellers didn't have to do this under $20k IF they knew that their sales were from items that were sold less than purchase price or an inheritance whose value hasn't increased since the time of death - this is a ludicrous waste of time for eBay sellers who aren't a business to have to track and report each item and expense at such a LOW threshold.  Mothers, housewives, senior citizens sell household items and things they inherited to make ends meet, they have a right to get a RETURN on these items without profiting more than the items worth and not be taxed and they still will under the new law EXCEPT NOW they have to be a junior ACCOUNTANT and create spreadsheets, calculations and reports, consult and pay an accountant for accuracy on reporting sales  to prove to the IRS that their household items and inherited items aren't selling for more than their original value and aren't taxable - MOST PEOPLE will NOT know how to itemize all the required information on a spreadsheet and won't take the time to do this so they will get charged the full 28% capital gains tax on the amount reported on their 2022 1099!!!  PEOPLE PLEASE WAKE UP and stop saying this law is NO DIFFERENT! It's just another way to stick it to low-income people or senior citizens trying to make ends meet by selling their used/unwanted items as the IRS will profit from the people who don't track all that is required!!!  BTW eBay is lobbying Congress to fight to get the limit raised to something acceptable, it used to be $20,000 and to go down to $600 to keep track of every item sold and FMV, expenses associated with each item (whether that item is profitable/taxable or NOT!) is a complete HARDSHIP on the people selling their used items.  I agree that $20,000 there were probably 'some' people not reporting 'some' items that were profitable but to drop that limit to $600 is LUDICROUS, maybe $12,000 or $10,000 makes more since but certainly NOT $600 as the housewives, mothers, fathers and the senior citizens selling their household and inherited items will LEAVE in DROVES after they get that first 1099 because NO ONE has the TIME to create a spreadsheet with calculations to report that their items made NO PROFIT and weren't taxable in the first place!!!!!  Mothers just need the extra money to feed their kids or buy them a new backpack or senior citizens to pay for food or prescriptions.  Here is ebay's link to HELP lower the threshold and I suggest ALL SELLERS get involved and Send an email to your Members of Congress! https://www.ebaymainstreet.com/campaign/2021-federal-1099-campaign 

[randyshotrods]

Kind of hard to pay taxes as an undocumented (illegal Alien) worker.  With no Documents and no social security number how do you pay employment taxes?  Green card workers are a totally different thing.  

I would also say you can always find exceptions to the general group.  I would like to see the percent of Undocumented (Illegal Aliens) in this country (which we can't even fathom as there is no way to count them since they are undocumented) that pay income tax. 

I would bet you it's somewhere in the bottom single percent. 

[spirit-n-history]

You are spreading false information when you say it is NO DIFFERENT!  See screenshot, that was last year 2021, in 2021 a seller did NOT need to report every sale ONLY if you sold something for more than the purchase price or inherited value at the time of death (when you inherited it).  NOW with the new 2022 law you will get a 1099 for ANY sale when you reach $600 in sales even if it's NOT taxable (last year you'd get a 1099 when you reached $20,000) AND this year you will have to keep track of WHICH of your sales are NOT taxable and prove that you paid more than you sold the item for in order to NOT to be taxed on those sales!

 

[spirit-n-history · Accepted solution]

Last year many sellers did NOT have to report sales for items they sold for LESS than they purchased them up to $20,000 this year those sellers WILL have to report the sales AND itemize each one to prove the item was sold for less than they purchased it in order NOT to get taxed on those sales, so what do you mean maybe it's time to learn to do their taxes like the rest of you? Those sales were NOT reportable before 2022!

[spirit-n-history]

Sorry I didn't realize that some people can't read text without spacing, and the subject although has been discussed before, many people in those threads have the facts incorrect, just like comments in this post.  That was the purpose of this post to finally set the facts straight.

[spirit-n-history]

Large text with FALSE information doesn't make you right!  

 

You are spreading false information when you say it is NO DIFFERENT!  This was the law last year in 2021 (see screenshot), you did NOT need to report every sale ONLY if you sold something for more than the purchase price or inherited value at the time of death (if you inherited it).  NOW with the new 2022 law you will get a 1099 for ANY sale when you reach $600 in sales instead of last year's $20,000 AND you will have to keep track of WHICH of those sales are NOT taxable and prove that you paid more than you sold the item for in order NOT to be taxed on those sales.

[spirit-n-history]

Yes it is you are wrong.

[spirit-n-history]

It is a new law and people weren't getting a free-ride, get your facts straight, this post is about FACTS and in 2021 (see screenshot) sellers did NOT have to report sales IF they sold something for LESS than they purchased it up to 20,000!  Now in 2022 they will get a 1099 for ANY sale when they reach $600 AND they have to keep a log/track the sale and prove which ones are NOT taxable (the ones that they sold for LESS than the purchase price).

[stainlessenginecovers]

The information that 'income' over $600 is to be reported is EXACTLY the same as the law has been regarding 'having to report' for decades. 

Therefore, there is NO misinformation here.

That 'turbo tax' bite is not only outdated, but last I looked, $350 was less than $600. Turbo Tax is NOT stating that 'if you sell 50 things for $10k as long as you don't get a 1099, you don't need to report'.

[wildpitchsports]

Friend of mine had a client come in to the H&R Block office she works at today, 1/5/22. She came to do her taxes. She was a gig driver for a company called "Favor." Kinda like an Instacart/Doordash hybrid. 

They have to place all of their orders and pay with a card. So they treat them as payment processors on behalf of Favor. Favor does not issue them 1099K's unless they hit the 200 transaction/$20,000 threshold for 2021 tax year and prior. She made $13,000 in income therefore she won't get one in 2022 (1099K.)

Based on the logic above are you saying she didn't have to report $13,000 in income? Because...

While I agree the threshold is too low for 2022 tax year and with more than a few of your points I will say that you are lucky that you even realized it. Most won't until they actually receive the 1099K's with the new "trigger" in January of 2023.

[spirit-n-history]

@wildpitchsports  Providing a service in exchange for $ is  different than selling an item on ebay for LESS than you purchased it.  Items sold on ebay for less than their purchase price was NOT reportable prior to 2022 and still won't be taxed but now is reportable to prove the original purchase price. The example you give of a gig driver is very different it is a SERVICE provided in exchange for $ and was always reportable and taxable.  It's interesting how many people don't know what is reportable and/or what is taxable, hence the post to educate people.

[cordell1]

I really don't have trouble with keeping receipts and processing a sheet of paper for each of my sales.  Once processed at the end of the year it gives nice specific numbers for tax reports.  So this is the nothing new.... not everyone does the paperwork and that who this really applies.

[mr_lincoln]

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@cordell1 wrote:

I really don't have trouble with keeping receipts and processing a sheet of paper for each of my sales.  Once processed at the end of the year it gives nice specific numbers for tax reports.  So this is the nothing new.... not everyone does the paperwork and that who this really applies.

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@cordell1   I find a lot of this interesting ... since I acquire my items from auctions I get an itemized list of purchases ... when I do my tax return I simply create a spreadsheet of all purchases but do not submit the receipts with the return ... they are available upon request of course so just the spreadsheet goes.

[ljsj2757]

try explaining that to the IRS..this is going to open people up for audits and when they do that they will go back in the years past when the threshold was higher and if you didn't claim that income you are gonna have a problem..

[wildpitchsports]

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@spirit-n-history wrote:

@wildpitchsports  Providing a service in exchange for $ is  different than selling an item on ebay for LESS than you purchased it. 

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The $600 threshold now lumps online selling in with gig economy work so in the eyes of the IRS they are one and the same.

This whole "if you don't make a profit - don't report it" logic will hurt so many people if that narrative continues to be pushed.

You get a 1099K in 2023 for 2022 sales in any way, shape or form. You better report it on your 2023 return. 

How everyone handles that is between them and the tool of choice they use to prepare your taxes.

[Anonymous]

New level on sending out 1099 from eBay for 2022 ($600.00)

i am from japan so how i handle this or its only for USA seller?