Why does eBay cut off sales at $600. Can we go back to Paypal?

[outofarea]

The IRS removed that $600 limit from Paypal and some other payment services, but I guess eBay payments was not included. Can we go back to using Paypal rather than eBay payments so we can keep selling after hitting the $600 eBay limit? We'd also have to go back to billing each month they way it was before. I am not giving eBay a social security number so that they can send out a 1099-K form.

[toomuchstuffagain35]

FWIW it's the GOVERNMENT that dictates the threshold for issuance of a 1099K form, not ebay. And EVERY payment processor has to follow those rules/laws, not just ebay.

Also the GOVERNMENT who mandates the marketplace/processor obtains the SSN and bank account for payment.

[outofarea]

Here is some text from an article on the IRS website:

IRS announces delay in Form 1099-K reporting threshold for third party platform payments in 2023; plans for a threshold of $5,000 for 2024 to phase in implementation

IR-2023-221, Nov. 21, 2023

IR-2023-221, Nov. 21, 2023

WASHINGTON — Following feedback from taxpayers, tax professionals and payment processors and to reduce taxpayer confusion, the Internal Revenue Service today released Notice 2023-74PDF announcing a delay of the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023.

As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year. This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn't expect one and may not have a tax obligation. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.

[toomuchstuffagain35]

Yes, I'm aware, as are most other posters here.

Try doing a search on the board for 1099K. It's been discussed to death already.

Moving back to PayPal (ain't gonna happen btw) would make no difference at all.

[outofarea]

Well, since I mostly sell music and movies I guess I can switch over to discogs. Sure will hate learning a new platform.

[itsjustasprain]

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@outofarea wrote:

Well, since I mostly sell music and movies I guess I can switch over to discogs. Sure will hate learning a new platform.

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Discogs is based in Oregon from what I read. Wont they have the same reporting requirements as any other online marketplace?

[dbfolks166mt]

     I am not sure what you mean by eBay cutting off sales at $600. Have they suspended your account because you have sold $600 worth of items in 2023 and are refusing to give them your SSN? FYI PayPal also requires your SSN these days and always has. I am in a state that has a $600 1099 reporting/issuance requirement and while I have never exceeded the $20K limit I have gotten 1099's from multiple financial processors since 2020. 

[evry1nositswindy]

You don't provide your social security number, you don't get paid.  Easy as that.  The funds will eventually go to your state.  To claim them, you will have to provide your social security number.

[downunder-61]

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@outofarea wrote:

The IRS removed that $600 limit from Paypal and some other payment services, but I guess eBay payments was not included. Can we go back to using Paypal rather than eBay payments so we can keep selling after hitting the $600 eBay limit? We'd also have to go back to billing each month they way it was before. I am not giving eBay a social security number so that they can send out a 1099-K form.

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Then you need to stop selling on eBay - without the SSN you are not going to be paid because eBay is not going to break IRS and Federal Government Laws, even if you are happy to by not declaring income.

[outofarea]

Where does the $600 limit come from? Certainly not the IRS. Their limits are $20,000 for 2023 and $5,000 beginning in 2024. Here is some text from the IRS site:

WASHINGTON — Following feedback from taxpayers, tax professionals and payment processors and to reduce taxpayer confusion, the Internal Revenue Service today released Notice 2023-74PDF announcing a delay of the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023.

As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year. This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn't expect one and may not have a tax obligation. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.

Given the complexity of the new provision, the large number of individual taxpayers affected and the need for stakeholders to have certainty with enough lead time, the IRS is planning for a threshold of $5,000 for tax year 2024 as part of a phase-in to implement the $600 reporting threshold enacted under the American Rescue Plan (ARP).

[ajs_coins_and_alchemy]

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@outofarea wrote:

Where does the $600 limit come from? Certainly not the IRS. Their limits are $20,000 for 2023 and $5,000 beginning in 2024. Here is some text from the IRS site:

 Purely guessing here, the $600 limit for obtaining your SSN may have to do with the fact that the $600 threshhold was in place for 1099 and only recently got delayed? Same thing happened last year? I think? Was $600 SSN a thing prior to $600 1099 threshhold?

OR could it possibly be related to PATRIOT Act (anti terrorism, anti money laundering, etc) type stuff??? 

[outofarea]

Looks like eBay is incompetent or looking to get your SSN for some other reason other than sending out 1099K forms.

Here some more text from the IRS site:

This means that for 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions. For tax year 2024, the IRS plans for a threshold of $5,000 to phase in reporting requirements.

[albertabrightalberta]

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@outofarea wrote:

 I am not giving eBay a social security number so that they can send out a 1099-K form.

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If you don't give ebay your SSN, you cannot and will not get your money. Eventually, the money will go to your state treasurer's unclaimed funds and you'll have to claim it from them. (It'll involve disclosing your SSN so you might as well do it now!)

[eburtonlab]

Where does the $600 limit come from? Certainly not the IRS.

Many states have their own limits for state income tax purposes.

At least five states have their limits set at $600. Sellers filing in those states will trigger the requirement to receive 1099K forms when they reach that limit.

https://support.waveapps.com/hc/en-us/articles/12277365763220-Form-1099-K-Federal-state-thresholds

[inhawaii]

I told my employer the same thing. I'll be damned if I'm going to give him my SSN. That'll show him.