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$5000 limit 2024
I understand the new $5000 limit for 2024. But is there still a bottom line for how many items you sell to go with that?
200 items was the previous number and $20,000.
Say I sold only one item in 2024 for $6,000, would I receive a 1099K and be required to pay a tax on the profit, which I would do anyway.
Thanks in advance
61 comments
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.
pats6915
·2 years ago5000 I meant!
pats6915
·2 years agoI’m pretty sure the reporting threshold is $600 for 2024. That information is on the eBay website. If it is $500 let me know how you know that.
pats6915
·2 years agoI’m pretty sure the reporting threshold is $600 for 2024.
nobody*s_perfect
·2 years agoDo you have any evidence for that? Such as an announcement or memo directly from IRS, dated later than their memo from November 2023, linked above, which says that they plan to set a threshold of $5000?
dryophelia
·2 years ago@pats6915
It a threshold where a 1099K form is to be issued.
This form allows sellers to see the amounts being reported to the IRS by the issuer of the form.
Reporting your income should include all monies brought in, minus expenses, not just what appears on a form.
mam98031
·2 years ago@pats6915
There is no way for any of us to know that for sure yet. The IRS has already said they are considering having it changed to $5,000, but that has not yet been approved. And there isn't likely to be any firm decision made until very late in the year as they have always done.
With that said, it doesn't really matter. We are all responsible to report our income with or without a 1099K, which is merely a form and nothing more than a form. The IRS rule is that we are responsible to report all our income every year.
So no matter what they decide to do, your sales should be reported to IRS every year. After you are able to take your deductions / costs of sales away, the net income may not have as big of an impact on your taxes owed as some might think.
seven-sea-sport-cards
·2 years agoIf i sold 599.99 on ebay a month only , all year while staying under 600 per month, i would assume i will not have to report?. Is that safe to say?
Mike
nobody*s_perfect
·2 years agoNo, that is not "safe to say." First of all, you are supposed to report your eBay income even if you don't get a 1099-K. Second, the threshold for issuing 1099-K is annual, not monthly. If you sell $500 per month, that's $6000 for the year, so you would be over the $5000 threshold IF that is what the IRS implements.
kensgiftshop
·2 years agoNo, it's not safe to say that.
Just because Ebay doesn't have to report it, doesn't mean you don't have to.
dbfolks166mt
·2 years agoAs others have noted there is NO $5,000 limit for 2024 nor is there an item limit. It is under discussion but will require Congress to pass a law to change the current one. Regardless of what the Fed does or does not do it does not effect state laws that are current on the books or any new ones that individual states may pass.
NOBODY will know for sure until probably December of 2024.
armysergeant
·2 years agoYes, because you exceeded the $5k limit even by selling only one item. The other scenario is that you have $4k in sales and 205 items sold then you will receive the 1099 as well.
mam98031
·2 years agoWhat? We are only 10 days into 2024. We don't know what the IRS threshold on the 1099K [there are several different types of 1099 forms] yet. IRS is CONSIDERING 5K for 2024 [not 2023] and it will likely NOT have a transaction number as part of the threshold.
@armysergeant
b86fiero
·2 years ago~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
"tax on the profit" - "which I would do anyway"
It appears the OP is aware they are required to pay the tax on the profit. It appears they are also aware they can deduct expenses to reach the profit amount for which taxes are due.
That leaves the questions of at what dollar amount will the 1099K be generated and if there is a certain number of sales that must accompany the dollar amount to trigger the 1099K.
Thank you to the several posters who have answered those questions based on what IRS info is currently available.
simba6
·2 years agoNot receiving that or any tax form does not excuse you from any taxes you may owe.
intel_outside
·2 years agoThe previous limit was $20,000 and 200 items and yes, it did excuse sellers from any taxes they may owe.
kensgiftshop
·2 years agoHow do you figure that?
mam98031
·2 years ago@intel_outside
How did it do that????
If you actually believe this and if you have done this, you really should seek the advice of a Tax Professional as you likely have created a problem for yourself with IRS, so try to head it off before they find it. It will likely be a lot less expensive for you.
kensgiftshop
·2 years agoIt's amazing how many sellers think like that.
mam98031
·2 years agoI know, it is down right scary. I've had conversations with a couple of sellers a few years back before they started messing with the thresholds on the form. And those sellers told me they would stop selling after they reached about $19,000 so they wouldn't have to pay taxes on the income.
And why anyone would thing the threshold on a FORM somehow sets the threshold for EVERYONE's income to be reported to the IRS boggles my mind too. What about those that get a W2, is their income not reportable to the IRS if they earn less than the threshold on the 1099K? What about the income earned on the other dozen types of 1099 forms. And so on.
Somehow this 1099K carries the highest priority when it comes to reportable income.
I'm with you and I simply do not understand why some believe this or something similar.
The fact is IRS has no minimum requirement on reporting income. However Self Employment taxes do not have to be claimed on income below $400.
soh.maryl
·2 years agoThe IRS has never specified the number of items being sold to go along with any limits.
dbfolks166mt
·2 years agoThe IRS has never specified the number of items being sold to go along with any limits.
You are quasi correct while the law does not specify "items" it does specify transactions which generally closely relates to items sold. Under the old/current threshold limit at the Federal level it was a two piece puzzle. So with the latest delay, on whatever the new limit becomes, 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.
Of course there are a number of individual state laws, and probably more to come, that have already established and codified lower $ issuance thresholds and in some cases minimal number of transactions as well.
mam98031
·2 years agoThat isn't accurate. The old rule was $20,000 and 200 transactions to receive a 1099K.
"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."
https://www.irs.gov/newsroom/irs-announces-2023-form-1099-k-reporting-threshold-delay-for-third-party-platform-payments-plans-for-a-5000-threshold-in-2024-to-phase-in-implementation#:~:text=This%20means%20that%20for%202023,to%20phase%20in%20reporting%20requirements.
reallynicestamps
·2 years agoThe 1099K simplifies your tax accounting.
You are required to report all income.
With a 1099K you know what your GROSS eBay income is, and then with your other records you can subtract your deductions, like postage,eBay fees, procurement, insurance,rent, printer ink and paper, etc.
Then you can happily record your NET eBay income and pay income tax on that.
Don't fuss about it.
Just keep careful records of your expenses. Even if that is just a shoebox full of cash register tapes.
madhousewife
·2 years agoThanks. That's actually helpful and supportive to those of us who are very flustered by this topic.
mam98031
·2 years agoNope, not yet. IRS is considering that threshold, but they have not yet committed to it. When and if they drop it to 5k it is unlikely there will be a number of transaction required too.
Keep in mind that getting a 1099K does NOT determine when you have to report your income to IRS. All income above $400 is suppose to be reported to the IRS with or without a 1099K.
https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-1099-K/ba-p/33141019
https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses
https://www.irs.gov/businesses/gig-economy-tax-center
https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html
https://www.irs.gov/pub/taxpros/fs-2022-41.pdf
tobaccocardyahoo
·2 years agoThe IRS may not have the power to set a rate above $600.
There are cases at the Supreme Court whose decision may limit the ability of federal agencies to do anything that Congress did not grant the the right to do.
I suspect they will not decide what to do until after the court rules.
Whether Ebay reports the income on a 1099k or not, you must report your profits from Ebay sales on your tax return.
dbfolks166mt
·2 years agoThe IRS may not have the power to set a rate above $600.
There are cases at the Supreme Court whose decision may limit the ability of federal agencies to do anything that Congress did not grant the the right to do.
I suspect they will not decide what to do until after the court rules.
You would be somewhat correct but there is really nothing for the court to rule on unless the Federal government attempts to change the threshold without passing a modification to the current law which has the limit at $600. In essence the IRS is in violation of the current laws that require them to enforce the codified $600 reporting/issuance threshold.
semperfi6870
·2 years agoEasy. Slow your roll, "player".
dbfolks166mt
·2 years agoAs others have stated nothing is set at the Federal level for the 2024 tax year other than the rumors. There is also no way to tell what the individual states may do in 2024 with regards to establishing their own reporting thresholds for the 1099 which would NOT be overridden by any federal limit. A lot of people are worried about a lot of unknowns at the moment most of which I am assuming do not claim their eBay revenue on their taxes.
nobody*s_perfect
·2 years agoIf you believe that the new threshold has been set at $5000, then perhaps you have been listening to gossip and just talk. Here's a link to the memo which the IRS issued in November which said they are planning it. Given the last-minute nature of these 1099-K-related announcements in the past couple of years, nobody knows what will actually transpire for tax year 2024! As with the legislated $600 threshold, there is apparently no minimum number of transactions.
https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5000-for-2024-to-phase-in-implementation
yuzuha
·2 years agoTruly loving all of these threads that are demonstrating EXACTLY why the 1099K reporting threshold is being lowered.
12345jamesstamps
·2 years agoThe delay will probably be another delay year . LOL
Here we are just talking about 1099K with eBay....the reason for delays is it has to be for platforms as well for Etsy, Stub Hub, Pay Pal (which is NOT eBay), Square, Cash App, Postmark, Doordash, Uber, Lift and so on.
That all ain't happening over night. LOL
dbfolks166mt
·2 years agoThe delay will probably be another delay year . LOL
Here we are just talking about 1099K with eBay....the reason for delays is it has to be for platforms as well for Etsy, Stub Hub, Pay Pal (which is NOT eBay), Square, Cash App, Postmark, Doordash, Uber, Lift and so on.
That all ain't happening over night. LOL
At the Federal level another delay in 2024 would not surprise me a bit given the lethargic pace at which the Federal government is moving these days. For that reason it would not surprise me to see a number of additional states pass their own 1099 issuance thresholds. This could potentially catch some sellers off guard, at least those that attempt to dodge the 1099, just as it did for some sellers in Virginia when they changed the 1099 issuance limit to $600 in 2020. The Virginia law was not passed until July of 2020 but it made the law retroactive from 1 January 2020 so a number of sellers had already eclipsed the threshold prior to the law being passed.
The delay is not so much because the "platforms" do not already have the ability to handle the processing in place. It has been there for years just as the software for other tax forms like 1099-INT, W-2's, SSA-1099........ What may be making it difficult at the moment is there is NO standardization for the 1099-K and the platforms are having to tweak their software to handle not only the Federal level but the individual state levels as well. The delay has more to do with politics than anything. EBay's interest in the issue is their bottom line and nothing more. As sellers attempt to avoid the 1099 that represents potential lost revenue to eBay. EBay has little interest in the IRS workload or in sellers tax liabilities their ONLY focus is how this is potentially impacting their bottom line.
reallynicestamps
·2 years ago@dbfolks166mt
With dozens of states being involved, wouldn't it be simplest for the venues to issue the forms for anyone passing the LOWEST gross sales level?
Because, after all, everyone is declaring their income, right?😎
dbfolks166mt
·2 years agoWith dozens of states being involved, wouldn't it be simplest for the venues to issue the forms for anyone passing the LOWEST gross sales level?
Because, after all, everyone is declaring their income, right?
Why do you think they lowered the threshold??
mam98031
·2 years ago"Dozens of states" are NOT involved. It is about a single Dozen.
https://stripe.com/docs/connect/1099-K
reallynicestamps
·2 years agoSorry, I'm a foreigner.
I thought the USA had 50 states.
Do only a dozen have state income taxes?
mam98031
·2 years agoNot all states have income taxes. And not all states that have income taxes have a requirement for the 1099K. It is a mixture of the dozen states that require it per the link I previously posted.
The 1099K is an IRS form, not a state form. It is just that some states require the form to be issues at much lower levels that IRS does currently.
tremely2
·2 years agoNot necessarily. If you only use ebay as an online yard sale for stuff you already own, you do not owe tax on those sales. In that case, the loser threshold just creates more paperwork when you file your taxes.
mam98031
·2 years ago@tremely2
That is NOT necessarily true. You should read up on the requirements and exceptions.
https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-1099-K/ba-p/33141019
https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses
https://www.irs.gov/businesses/gig-economy-tax-center
https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html
https://www.irs.gov/pub/taxpros/fs-2022-41.pdf
ckimodog
·2 years ago@winomore
I would contact a tax consultant or attorney. They could give you more info than an eBay seller/buyer discussion forum.
Good luck to you
fern*wood
·2 years agoAnother year...
kensgiftshop
·2 years agoYou misunderstand, the $5000 limit is just talk.
It doesn't matter if you receive a 1099K or not, you still report the income.
Will you owe any income tax, depends on if you made any profit and how many deductions you have.
winomore
OP2 years agoThank you for the reply but "Gossip" and "Just talk"
Interesting answer
plt4994
·2 years agothe $5000 limit is on the IRS website now
kensgiftshop
·2 years agoWhat does it say about it?
mam98031
·2 years agoIt says the same thing as it did when they released the threshold rates for 2023. It reads as follows "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)."
That does not mean it has been approved, it means they are planning for it. That could change at any time and we likely won't know what the threshold is until December. Which has been their time to announce the threshold for the last 3 years or so.
With that said, it really doesn't matter. It is ONLY a form. It does NOT set the threshold for reporting income to the IRS as the IRS has no such threshold. We are all responsible for reporting ALL our income whether represented by a 1099K or not.
So if they do change the threshold to 5K for next year, that doesn't mean if you have $4999 go through your Managed Payment account that you don't have to report that income.
https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5000-for-2024-to-phase-in-implementation
savwillsell09
·2 years agook thank you
700silverv
·2 years ago"We are all responsible for reporting ALL our income whether represented by a 1099K or not", this is not 100% true as written, the IRS wants you to report all income most of the time, but they are not worried about the couple of personal things you sold in a year at a lost, if that is all you sold and nothing else.
mam98031
·2 years agoIt is better to be safe than sorry. If you sold them at a loss, then there is no harm representing those numbers on your Tax return as it would have no impact to taxes you may owe. It will keep you out of trouble in the future and will only take a little bit of your time now.
12345jamesstamps
·2 years agoThere is no new limit yet....just gossip.
Since Congress isn't really working on anything these days.
There's no telling what might happen in 2024.
Sellers stopped selling in 2023 thinking it would be a $600. threshold. They were fooled.
I am just going to go no changes this year and if it does happen I will be ready with the "deductions" against a 1099K.
winomore
OP2 years agoThank you for the reply but "Gossip" and "Just talk"
Interesting answer
mam98031
·2 years agoSome sellers did the same thing in 2022 for the same reasons.
savwillsell09
·2 years agowell said!!
pats6915
·2 years agoOn eBay hit help, the hit fees, then click on 1099k, the eBay site says $600. I’m selling on eBay and I won’t go over $600 until I hear something different.
mam98031
·2 years agoIt says that because it is currently the law and it has been since 2022, but the IRS has gotten approval for 2022 and 2023 to raise that minimum threshold on the FORM. But the law has not yet been changed which is why Ebay is stating what the current law is.
IRS has stated that they are CONSIDERING having the minimum threshold changed to $5,000 for 2024, but that has not yet been approved and there is no word yet if that will be a temporary thing for 2024 or become the rule / law.
Still as I previously stated, this is merely a form and nothing more than a form. It does not and has not EVER set them minimum threshold in which to report income. We are responsible, with or without this form, any form, to report ALL our income every year.
icetea89
·2 years agoIs $5000 monthly or for a year? Right now im confused the selling limit now say i can sell $6000 this month last month same thing?
nobody*s_perfect
·2 years agoAll of the references in this discussion, whether to $600, or $5000, or $20,000, are all talking about the total for the YEAR, and about the thresholds set by the IRS which require eBay to send a federal Form 1099-K to the seller.
A seller's listing limits are monthly limits which are set by eBay; yours is apparently $6000 per month. This has absolutely nothing to do with the IRS or tax payments or thresholds for sending a 1099-K. It's about the limit which eBay itself sets for the amount that any seller can list each month. These limits ( on dollar value and on number of listings) are based mostly on the seller's reputation such as feedback and opened cases. Here's a help page with a discussion about eBay's listing limits.
https://www.ebay.com/help/selling/listings/selling-limits?id=4107
mam98031
·2 years agoThis thread @icetea89 is not about your Selling Limit on Ebay. It is about the tax for 1099K.
The selling limits Ebay impose are by month.
The IRS tax form is by year.
shopgirlohio
·2 years agoTo clarify you are not always required by law to report all income made from eBay sales. If you are selling your personal items and not making a profit on them, similar to a garage sale, you do not have to report this on your tax return. If eBay issues a 1099k for you sales because you went over a certain threshold than it will be necessary to understand how that should be handled on your 1040. But without a 1099k, for example selling your old sofa on eBay for $1500 when it cost you 3k- you are not required to report this as income.