Your payouts are on hold!

[jn099]

I received an email after an item I had listed sold. the email states as follows:

As of Jan 1, 2022, the IRS now requires us to file and send a Form 1099-K to everyone who sells $600 or more.

Since you’ve made $600 or more in sales this year, we’ll need your full 9-digit Social Security number (SSN) or Individual Tax Identification Number (ITIN) to send you your 1099-K.

Please update your information so we can start sending your payouts and avoid other account restrictions.

I researched this and see it is indeed a new policy implemented by the IRS. I think it's ridiculous to target small potatoes sellers when huge corporations pay little to no taxes but the taxman is obviously going after every dollar they can. 

$600 in sales is a very low amount but eBay is telling me I have to supply my SS number even though I have not reached that lowly threshold. And to add insult to injury, eBay is holding my payout of the item I recently sold until I relinquish my personal data. 

I guess eBay has decided to lower the gross sales threshold even lower than the lowly $600 for certain sellers, like myself. 

Beyond Frustrated 

[shado-x]

I researched this and see it is indeed a new policy implemented by the IRS

Apparently, not enough.  It was legislated by Congress and signed by the President, authorizing it as tax adherence.  Would you like to pick which Party did that to you?  Why did you vote for them?  LOL.

Just add your SS number and get your funds.  Then report the dough on your tax return, why is making more money so difficult by filling in a few blank lines on a tax form, gee wiz.

[jn099]

Don't know where I stated anything about Party preference nor am I interested in discussing politics.

Thank you for weighing in 

[shado-x]

You did by blaming the IRS for "implementing" a policy, when it is Congress that legislates tax policy.  You'll figure it out.

[monica-sells]

"...I researched this and see it is indeed a new policy implemented by the IRS..."

You didn't quite do enough research to see 'why' they need these documents. It is called the Know Your Client Law........

 

What Are KYC Documents?

Account owners generally must provide a government-issued ID as proof of identity. Some institutions require two forms of ID, such as a driver's license, birth certificate, social security card, or passport. In addition to confirming identity, the address must be confirmed. This can be done with proof of ID or with an accompanying document confirming the address of the client.

[reallynicestamps]

How did the OP get a Managed Payments account  without giving his SSN ? I thought all US-based sellers had to supply that or if they are residents their IFIN(?) number.

It's more complicated here in Canada, because our Social Insurance Number is rarely used and tightly controlled. The Canadian government discourages its use if anything else is available.

And it should be mentioned, first that income tax is on our entire income, although the first tranche is pretty well tax-free. Whether you earn $60 online or $60,000 it is supposed to be reported.

And second, there are also tax deductions.

EBay will report the money you received, but you can reduce it by showing your postage costs, fees, and procurement costs.

A lot of small sellers are going to be shocked that their money-earning side hustle is actually a money -losing hobby.

[jn099]

It just didn't seem right for eBay to ask for my SS # when I have not reached the threshold they stated I reached.

Since you’ve made $600 or more in sales this year, we’ll need your full 9-digit Social Security number (SSN) 

I've only sold a handful of items and I checked, my sales this year has not reached $600. 

I don't come in here very often and was unaware I had to choose my words so wisely or risk being confronted on political viewpoints, but thanks anyway for your helpful reply. 

[reallynicestamps]

Have you been getting payments at all without a Managed Payments account? It's going on two years the new in-house processing has been put in place.

[slippinjimmy]

---

@jn099 wrote:

It just didn't seem right for eBay to ask for my SS # when I have not reached the threshold they stated I reached.

Since you’ve made $600 or more in sales this year, we’ll need your full 9-digit Social Security number (SSN) 

I've only sold a handful of items and I checked, my sales this year has not reached $600. 

I don't come in here very often and was unaware I had to choose my words so wisely or risk being confronted on political viewpoints, but thanks anyway for your helpful reply. 

---

Looking at your feedback you must be very close to $600 if not over that amount. Are you including shipping in your total?

[jn099]

I have had a managed payments account since 10/19/21

[monica-sells]

don't forget, the 1099K threshold INCLUDES item sale, shipping, refunds,...in other words it not just the payouts or the 'net'

it is the totality of the funds processed on your behalf (less sales tax)

[jn099]

Yes, I am close. When I add up my sales the total is $597.82 but that is still under the $600 or more in sales this year. And BTW, I only charged shipping on my last sale and yes I included it.

However, when I look at my transaction list, there was on transaction where eBay did not deduct the shipping label I bought from the proceeds of the sale. Instead, they deducted it from my checking account a couple weeks later and it's listed twice. Once as a debit and once as a payout (see below) and if you add the $11.12 to my transactions then it's over $600.  But if they're calling the purchase of a UPS shipping label a "sale" I guess I shouldn't be surprised. But the reality is it's a deduction from my account for the shipping label, not an item I sold. 

Transfer #####

From PNC Bank ending in ####

Nov 25

$11.12

Shipping label for order no. ####

UPS® Ground

Nov 16

-$11.12

[buyselljack2016]

so, you feel that eBay should wait until you sell another, by your calculation, $13.31, and the seek the info that they need to comply with federal law?

Would it be ok then?

[jn099]

I guess I'm not sure how I feel they should handle it. 

When I looked at the 1099-K and Tax Withholding FAQs it states:

• If you haven’t already given us your Social Security number (SSN) or Individual Tax Identification Number (ITIN), we’ll ask you to provide it once you reach $600 in sales.

To me that seems to indicate they won't ask until I've reached $600 in sales. 

[duffy4444]

   By your own calculations, you're so close to the $600 threshold, that you may have not added some funds that are to be included, and they put you over $600.

    The bottom line and the white elephant in the room is that for years, by law, it has been a requirement to report ALL online income over $1, so why are you balking at even a few bucks under $600? So stop splitting hairs over a few bucks. 

    Time to get a grip and stop sidestepping your tax responsibilities. That was the purpose of the recent lowering of the threshold in the first place. Get your feet wet, give eBay your full 9-digit SS#, and join the club. The smart sellers here, whether a business or "hobby seller", have been reporting their online income all along, less generous deductions, even when their sales were well under the previous $20k threshold.

     Frankly, I'm glad the playing field is finally being leveled by corralling those who have been whistling in the graveyard and getting away with it all these years.

Cheers, Duffy