TAXES 2024 & 2025 $5K then only $600 for Calendar YEAR

[rosemary6525]

The agency is also adding a transition year by setting a $5,000 threshold for transactions in 2024 and delaying the onset of the new $600 threshold until 2025, the IRS announced Tuesday afternoon.

what i is just goggled       As I understand that is in CALENDAR YEAR   someone talking about per month

5000 not so big.   Ain't sure if i have done.   My big question is PROFIT.   What if on the GROSS SALES of 6000

that your profit after cost of item, FEEBAY cut, shipping that you made only??????????? Half that??

In my case I usually LOSE money.   Just stuff I buy don't use, or try and do not like and resale.  Losing 25% on a $100 tennis racket better losing $100        How heck IRS gonna distinguish this????????       Only stuff GIVEN to me , do I make much of a profit          Heck  someone gave me printheads and we split and I sold about $1000  gave him $500   sure cannot do this looks like anymore.    Getting bit picky and looks to me impossible to separate sellers making money and other people just getting rid stuff

[12345jamesstamps]

We talked about this before.

Save all receipts for this year for deductions....wifi monthly fee...monthly eBay fees, shipping postage, tape, boxes. if you use a telephone...eBay app...that's deduction...and so on. Deductions will work.

Congress is having a tough time doing anything...and until I see a change from $2000. to $5000. to $600. for California...I see no changes like last year which I did post here.

[wastingtime101]

Those numbers @rosemary6525 are just the numbers at which eBay is required to issue a 1099-K. It has no bearing on a person's responsibility to report their earnings to the IRS. In other words, you may be required to report your earnings even if you don't receive a 1099-K.

By law, the 1099-K includes gross income. It's up to you to keep track of expenses and deductions to account for reporting your adjusted gross income.

With the limited knowledge in this area demonstrated by the questions you're asking, I strongly suggest meeting with a CPA to go over filing taxes for your eBay sales.

[caldreamer]

Different states have different requirements when 1099 is sent you.   Of course, IRS requires that you require "gross sales" for every dollar earned (even if you don't get a 1099).

EBAY has "easy to read" 1-page report that show YTD totals for (orders/gross sales, refunds, EBAY fees, shipping expense).  

$20,000 GROSS SALES (as shown on 1099 or EBAY report)

   -$500 EBAY fees

 - $200 Shipping expense

 -$1,000 your "cost of goods sold" plus other expenses (mileage, packing/office supplies, etc)

$18,300 NET SALES (taxable income)

[luckythewinner]

How heck IRS gonna distinguish this

By having you fill out a tax return and tell them whether you made money or lost money.

[fern*wood]

Why burden yourself with wondering what the 1099k threshold will be, because that doesn't matter as far as reporting sales goes.

[dbfolks166mt]

     You are assuming of course that this is going to make it through congress and get codified into law to overturn the current laws that are on the books. Also don't be surprised if more states do not pass their own threshold laws during the year and make the totals retroactive. 

     If after completing your taxes you are in the red with regards to your eBay sales that can offset other tax liabilities but there are distinct rules about how this can be applied and for how long. As  wastingtime101   suggested I would agree you should talk to a tax specialist. 

[lacemaker3]

@rosemary6525:

Reference for this? What's the link? Where did you see this?

I just googled trying to find the actual announcement, because, you know, I just like to read things and understand them for myself ... don't want to get fooled by fake news ... this kind of sounds like it ...

Google search -- nothing. Search of IRS.gov press releases and announcements -- nothing. Search for the first line (since it sounds like a quote, even though it's not in quotation marks) -- the only hit is for this thread.

Does anyone have a link to this announcement, because I can't find anything more recent than February, and that one DOES NOT support what the title of this thread says.

WAIT -- I FOUND IT!   (it's not fake news, it's just almost 5 months old)

But it wasn't announced today (Tuesday), it was announced Tuesday Nov 21, 2023. It's about the original announcement back in November. The first line in the original post was from a news article back in November. No new information, nothing about a different threshold for 2025. It does not support what the title of this thread says.

https://rollcall.com/2023/11/21/irs-delays-new-online-sellers-tax-reporting-threshold/

[nobody*s_perfect]

The only IRS announcement I've seen about $5000 is from last November, when they said, "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)."

https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-...

[wastingtime101]

For the OP's benefit, or anybody else with similar questions: The IRS is planning on a $5k threshold for 2024. It could easily change. Nothing has been formally announced for 2025.

State thresholds trump IRS thresholds.

FS-2023-27, Nov. 2023

Following feedback from taxpayers, tax professionals, and payment processors and to reduce taxpayer confusion, the Internal Revenue Service delayed the new $600 Form 1099-K reporting threshold requirement for third party payment organizations for tax year 2023 and is planning a threshold of $5,000 for 2024 to phase in the new law.

Third party payment organizations include many popular payment apps and online marketplaces.

The agency is making 2023 another transition year to implement the new requirements under the American Rescue Plan that changed the Form 1099-K reporting threshold for payments taxpayers get selling goods or providing a service over $600. The previous reporting thresholds will remain in place for 2023.

[Sorry for repeating info; got distracted before I submitted the post I wrote.]

[12345jamesstamps]

What if a 10 year old kid made $601. selling lemonade at a stand? Does he need to declare it? Just curious.

[wastingtime101]

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@12345jamesstamps wrote:

What if a 10 year old kid made $601. selling lemonade at a stand? Does he need to declare it? Just curious.

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What does $601 have to do with it? Or $600?

https://www.irs.gov/newsroom/heres-who-needs-to-file-a-tax-return-in-2024

For tax year 2023, self-employed individuals must file an annual return and pay estimated tax quarterly if they had net earnings from self-employment of $400 or more.

A person claimed as a dependent may still have to file a return. It depends on their gross income.

Any single individual under the age of 65 has to file if their gross income is at least $13,850.

Read the above IRS link for more info.

Individual states may have different thresholds for state filings.

[12345jamesstamps]

Reporting income.....if it be a 10 year old or a 60 year old I guess. Curious.

You always state all earned income should be reported by everyone.

[wastingtime101]

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@12345jamesstamps wrote:

Reporting income.....if it be a 10 year old or a 60 year old I guess. Curious.

You always state all earned income should be reported by everyone.

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By "you" do you mean me?

I don't always state that. See my first response on this discussion where I said:

you may be required to report your earnings even if you don't receive a 1099-K.

[monroe67]

"What if a 10 year old kid made $601. selling lemonade at a stand? Does he need to declare it? Just curious."

There is always a section in the 1040 Instructions that addresses the question of earnings by a minor child (or even an adult dependent, for that matter).   

The chart on page 10 of the 1040 Instructions for 2023 explains when a minor child or other dependent is supposed to file his/her own return:

Parents or legal guardians of minor children can choose to include their dependent's $601 lemonade sales income on their own tax return forms.  That tax scenario is discussed on page 8 of these instructions.  Makes kinda more sense to include those $601 in the parent/guardian's return, because it was probably the parents/guardians who purchased the lemons and sugar, the ice, the paper cups, printed the advertising posters, etc., etc.