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1099 form
I received an email saying that the 599.00 limit was put on hold and in 2024 the limit may be $5000.00.
is this true?
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I received an email saying that the 599.00 limit was put on hold and in 2024 the limit may be $5000.00.
is this true?
kh-vince
·2 years agoHi everyone,
Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.
Thank you for understanding.
sophies_corner
·2 years agoHas anyone received their 1099k yet?
dbfolks166mt
·2 years agoHas anyone received their 1099k yet?
Not yet but I have only received about 1/2 of my tax forms. The deadline is not till 31 January but with some of the postal issues, if you are getting paper forms, I am wondering how the IRS is going to address that. There are penalties for not meeting the deadline but this could come down to a battle between the issuing entity, the IRS and USPS and there is generally no tracking on sent forms.
mam98031
·2 years agoIRS doesn't require it to be released until the end of the month. Remember t check your tax reports in the Seller Hub.
kensgiftshop
·2 years agoYes, it has been put on hold for another year so all the tax cheats can relax.
Hopefully they'll change it to no limit and send a 1099K for any amount.
hiiragi_tsukasa
·2 years agoHow is selling a used item cheating on your taxes? Assuming you are a small seller clearing out your garage, naturally - if you have an ebay business making significant money per year, or selling brand new/unused stuff and making good money then yeah I'd agree with you 😅
The thing is $600 limit is way too low, that creates so much extra workload for the IRS as is so you really want to wait longer...and longer for your returns? $2000 sounds abit more realistic as the minimum imho
kensgiftshop
·2 years agoWhats the difference $1, $600 or $2000, you're still supposed to be reporting your income.
Some people think just because they didn't make $20,000 and didn't receive a 1099K, they don't have to report their income.
Issuing a 1099K for any income would make it fair for those of us that already report our income, even without a 1099K.
mam98031
·2 years agoI think you misunderstand what the 1099K is. It is merely a form and nothing more than a form. It does NOT set what is our responsibility for reporting our income to the IRS. It is merely a FORM.
Some seem to think it sets the threshold for reporting income and it absolutely does NOT. IRS doesn't have a minimum. So even though this year it is $20,000 and 200 transactions, you still have to or are suppose to report your income of a lesser amount.
A further misunderstanding is how it will impact taxes owed. Someone just making a few hundred $$$ will likely see no impact at all for the taxes they owe, but they still have to report ALL income.
@hiiragi_tsukasa
mam98031
·2 years ago@baxterstuff526
Yes, IRS did make the change for the 2023 tax year. The expected change for 2024 to $5,000 is not yet firm. It is what they are considering doing. IMHO it is a likely change.
With that said, keep in mind this is JUST A FORM and nothing more than that. It does not mean you don't have to claim your income if you don't qualify to get this form. IRS requires us to report ALL income.
The 1099K form was born because of people selling on the internet and not claiming their income. It was a form create to help stop that. But again it is only a form and it does NOT set the threshold for reporting your income to the IRS.
For many that are only making a few hundred dollars here, the money needs to be claimed, but it isn't likely to create a big tax debt for you or anyone else after you take your expenses away. For the most part it is most likely to be a modest bottom line affect and some will find it has no affect at all due to their income bracket.
But claim you income with or without the form. IRS is moving in the direction of being much more serious about getting people to claim all their income.
baxterstuff526
OP2 years agoThank you!
boelusqueen
·2 years agois there an actual 1099k form to download. and where is it.
monica-sells
·2 years agoIf you have one issued, it will be here....
https://www.ebay.com/sh/fin/taxforms
baxterstuff526
OP2 years agoThanks for your responses!
caldreamer
·2 years agoFor tax year 2023, only eBay sellers who exceed the current reporting threshold of $20,000 and 200 transactions, had backup withholding applied in 2023, or are ****residents of states that have a lower reporting threshold will receive a Form 1099-K****. For tax year 2024, the IRS announced plans for a $5,000 reporting threshold. We expect further guidance on the tax year 2024 and beyond in the coming months and will keep you in the loop.
Even though Federal govt. may not require 1099 (your state may have a lower threshold which would require EBAY to send 1099).
Also be aware that IRS requires that you report all income on your Federal income tax form (whether you get a 1099 or not). 1099 just makes it easier to know what your "gross sales" amount is.
albertabrightalberta
·2 years ago@baxterstuff526
Just because the issuance of 1099K forms has been postponed doesn't mean that we don't have to claim our income.
tobaccocardyahoo
·2 years agoYes it is true. But do not count on the limit being $5k.
The law says $600. No one has brought the IRS to court challenging their action. I have no clue who would.
There are cases pending at the Supreme Court which could limit the ability of Federal Agencies to do anything the law does not give them the power to do.
These decisions could affect this if it goes the way it seems it will.
css2001
·2 years agoThe 2023 Form 1099-K reporting threshold question is asked here a lot. Whether you get a 1099 or not you still owe taxes for any third party payments you received as income.
rosachs
·2 years agoMinor clarification (that's my ADD talking): You owe taxes on the NET of your reported sales, not the GROSS. 1099K is Gross, 1099K after legal deductions is NET.
My last partial year of consignment selling, before the '08 Recession mucked things up, I was on track to gross around $250K. The prior full-year had been nearly $200K. My taxes were calculated based on my NET income of around 27K for the full year and about half that for the partial year (didn't do much of anything after closing shop - no one was hiring).
Cost of Goods, cost of shipping supplies, cost of shipping charges, cost of my cellphone (allowed because I still had the 'land-line' for the house phone, printing supplies (paper & toner), a replacement thermal printer and an additional smaller thermal printer, even a new(er) computer that was used solely for the business (I've never been a gamer or streamer, odd after 20+ yrs in IT).
Point is, everyone is wetting themselves trying to figure out how to pay taxes on their entire eBay income. You don't. You track and document your deductions, deduct the ones that are actually allowed, and then pay income tax on the significanly lower net balance. You have to REPORT the gross (and the deductions), but you PAY on the net.
We now return to our regularly scheduled programming.....
-Bob.
AND you can still get a home office deduction - unlike those that just have a home office for real jobs 🙂 AND you get mileage to and from the post office.
rosachs
·2 years agoYou can deduct any mileage properly recorded for any trip solely for business purposes. My CPA recommended keeping a ledger (a notebook) with date, time, odo-out, odo-in, and purpose of the trip. Trips that were deductable were accumulated and deducted. Trips that were not, were not.
My city does not allow storage of business inventory in residential areas, so I had to rent storage space in a commercial area - and that rent was deductable.
Since my inventory was not stored where I worked, there was mileage to/from the storage facility to pick up or drop off inventory. I was shipping twice a week back them, so I usually only had 3 trips a week.
Trips to/from my consignment client were deductable. I'd go for quick meetings and to pick up more inventory. Mileage was from home to client, client to storage, and storage to home.
I had an arrangement with the USPS carrier for my house - if the garage door was up, that meant I had orders to pick up. if the door was down, nothing was going out that day. FedEx arranged a twice-weekly pickup as well -- they don't do scheduled residential pickups, but my business was registered with the state, city, and county, so I got twice weekly pickups.
When it comes to deductions - talk to a professional. Chatter on the boards is a good start, but there were deductions I would have missed had I not hired a CPA to work with (flat annual fee, $25/mo paid annually) and had them identify what I could and what I could not deduct. They also explained the pros & cons of the home office deduction, how to get my cellphone deducted, and how to keep track of mileage, among a great many other things. They also prepared my quarterly tax filings and did our personal tax return each year - all part of the annual fee. They also explained the pros/cons of various business structures and helped me get my LLC set up.
Second best investment I made for the business - the first being SixBit and automating my work on MY desktop, not on eBay's (at that time) fledgling services. Even today, I can reload those old backups and review my listings from 1999 up thru today. Makes it super easy to identify my best customers, my best selling inventory, my profit margin (by sale, by sales, by item, by items, by customer, by customers, by state, by states.... you get the idea).
Today I'm back to hobbyist level - I have stock I'm selling, and I keep my stats good, but after working eBay all day at work, I'm less inclined to push my own accounts very hard. I learned work/life balance long before it was "a thing".
-Bob.
css2001
·2 years agoOPPS! Sorry I somehow clicked your post instead of the OPs. Guess I stayed up too late!
dbfolks166mt
·2 years agoYes it is true. But do not count on the limit being $5k.
I would also not count on it being at the Federal level by the time we hit the end of 2024. I fully expect to see more states begin to set their own 1099-K issuance levels before we get through the year. I live in Virginia and we have had a $600 reporting threshold on the 1099-K since 2020 and I doubt that is going to change.
The law says $600. No one has brought the IRS to court challenging their action. I have no clue who would.
There are cases pending at the Supreme Court which could limit the ability of Federal Agencies to do anything the law does not give them the power to do.
These decisions could affect this if it goes the way it seems it will.
The interesting thing about the 1099 issuance requirement is it is in fact law. It was passed by congress and signed by the president as part of the American Rescue Plan of 2021. If this was taken to the Supreme Court they would look at the legality of the act under the Constitution. Under Article I, Section 8 of the Constitution congress does have this power and it is doubtful the court would overturn the law.