eBay needs to assure sellers NOW and make an announcement! No 1099-K forms will be issued for 2022!
eBay needs to assure sellers NOW and make an announcement! No 1099-K forms will be issued for 2022! For gross sales under $20,000!
I'm a little uneasy because I know earlier this year they "mistakenly", "inadvertently" (and arguably "incompetently") jumped the gun and issued some eBay sellers the 1099-K forms for sales in 2021! They issued it to the IRS AND California Franchise Tax Board. When mistakes like that happen, I imagine it's near impossible to sort out (without raising yellow and red flags with the IRS).
I think it's wonderful news that the IRS will delay (by one year) the required reporting by eBay, Poshmark, Etsy, Paypal, et al. But I really want assurances from eBay that they aren't going to mess this up! Many of us are just unloading used stuff from our shelves, closets, etc. We're not formal businesses with on staff accountants and receipts dating back years, perhaps decades. Many of us are selling at a loss, especially when factoring in eBay fees and shipping.
gary66ford
·3 years agoEbay sent me a 1099k for 2022, but the IRS delayed reporting until 2023 tax year. I only sold 198 items and under 10k sales. I fit under the old 200 and 20k rule now. Even though they sent me 1099k, I am not going to use it now.
nobody*s_perfect
·3 years agoYour listings indicate that you are based in Illinois, which is one of several states that have set thresholds that are much lower than the federal level. eBay has to produce a 1099-K for you because of the Illinois requirement, and of course they will also send it to the IRS.
eBay issued a memo about this in February 2021; IIRC a couple more states have been added to the list since then.
https://community.ebay.com/t5/Payments/Form-1099-K-Detailed-Report/m-p/31575590#M106915
mam98031
·3 years ago@gary66ford
IRS did not "delay" reporting, what they did was defer changing the minimum threshold to $600 until the 2023 1099K is released.
As for why you got a 1099K, it is because your STATE requires it.
https://stripe.com/docs/connect/1099-K
chpgts
·3 years agoEbay just released the 1099k forms and Ebay was just following the law. If your state has lower reporting requirements then Ebay is required under law to send you a 1099K and to the IRS and your home state.
This has no impact on my reporting my 2022 tax return because I alway declare all of my income and have done so with out being issued a 1099K in prior years.
What is interesting is the IRS is fully unprepared to handle the huge influx of returns and that was the reason the IRS postponed it.
This new law will not probably generate any substantial new revenue if any.
The IRS just opened the gates for more delays or problems handling the huge influx of returns.
If there are problems and I hope there are not, the IRS brought this on themselves. Terrible planning and follow thru. Do not blame Ebay, blame the IRS.
southern*sweet*tea
·3 years agoheh, I'm still waiting for mine, state level is $600 and has been for a couple of years. Still waiting for one from Paypal, too. Didn't get one last year either. Guess I'll file AGAIN without the required 1099 forms. Good thing I keep my own records.
pluscontact
·3 years agoHi well got my 1099 today. Less than $20,000 and be less 200 transactions for tax year 2022
so they are out
netboy27
·3 years agoYup, I got my 1099 today as well. I thought I was off the hook...guess it was just wishful thinking.
I suppose 2022 tax year I'll be changing my ebay from a hobby to a business...my accountant will love it..
mam98031
·3 years agoYes you need to do that. If you have been telling the IRS it is a Hobby Income, you can't take any deductions for that. They changed that law back with the previous President.
nobody*s_perfect
·3 years agoThere is a "mechanism" for sellers to easily report selling used personal household items at a loss. IRS has recently issued some helpful guidance for those sellers. IIRC the 30% rate is related to capital gains only.
"if you received a Form 1099-K for $600 for the refrigerator for which you originally paid $1,000, you should report the loss transaction as follows:
Form 1040, Schedule 1, Part I – Line 8z, Other Income. List type and amount: "Form 1099-K Personal Item Sold at a Loss .... $600" to show the proceeds from the sale reported on the Form 1099-K
and,
Form 1040, Schedule 1, Part II – Line 24z, Other Adjustments. List type and amount: "Form 1099-K Personal Item Sold at a Loss.... $600" to show the amount of the purchase price that offsets the reported proceeds. Do not report the $1,000 you paid for the refrigerator because the loss on the sale of a personal item is not deductible."
https://www.irs.gov/pub/taxpros/fs-2022-41.pdf
mam98031
·3 years agoThank you, but as far as I know that doesn't change things if the taxpayer is identifying their income as Hobby Income.
brightlightbookseller
·3 years agoIt still must be reported as income even if it's a hobby, and the IRS might consider it a business even if it's a hobby as well:
https://www.irs.gov/newsroom/people-should-know-if-their-pastime-is-a-hobby-or-a-business
mam98031
·3 years agoI didn't say anything about claiming the income or not claiming the income. What I said is those that claim their income as Hobby Income are not allowed to take any deductions for that income like seller fees, shipping costs, etc.
Great link, thank you.
slippinjimmy
·3 years agoYou appear to be in New Jersey, the threshold for NJ residents is $1000.
The change from $20,000 to $600 is only at the federal level, States set their own thresholds.
mam98031
·3 years agoYour state requires a 1099K to be issued at $1000.
mam98031
·3 years ago@yanksjetsknicks
You are in a state that has their own requirements for the 1099K. If you are ONLY selling stuff you previously owned, then use the links I provided just a couple post back to help you value the items if you don't have receipts.
yanksjetsknicks
·3 years agoThanks, I am in Good Old New Jersey!!!!
mm_2770
·3 years agoI noticed that you said this information is true as of October 2020 - I'm currently in the process of trying to find if any updated information is available on the official Maryland taxes website. I assume the $600 number is still the current threshold, but it's certainly proving to be a little difficult finding that information in plain text on the state government's own site.
mam98031
·3 years ago@mm_2770
Maryland isn't on that list I posted. Here is a link to a more current list and Maryland is on it. It says it was last updated January 23,2023.
https://stripe.com/docs/connect/1099-K
kraftique
·3 years agoYou listed Pennsylvania, the last I heard years ago they had it at $5,000.
mam98031
·3 years ago@kraftique
This is the most current list I could find and it is pretty current, just a few days old.
It is saying that Pennsylvania doesn't have a requirement for it at this time.
https://stripe.com/docs/connect/1099-K
dbfolks166mt
·3 years agoThank you for the update. I can also confirm that CA has followed the Federal IRS delay for their 1099 issuance threshold unless the transactions involve an App based driver. Up until sometime this week the CA FTB 1099-K issuance read as follows. The 2021 fiasco with regards to the CA 1099 issuances was caused by CA splitting the issuance requirements focusing on the app based drivers in 2021 and everyone else in 2022. They updated the CA FTB guidelines sometime this week which surprised me given the potential revenue involved.
Of course regardless of the issuance requirements all sellers should be reporting their income regardless of whether they receive a 1099 or not.
Old requirements.
1099-K: Payment Card and Third Party Network Transactions
As of January 1, 2021, you may receive a 1099-K if you receive annual gross payments of $600 or more in settlement of third-party payment network transactions and are an app-based driver, regardless of the number of transactions.
For returns for calendar years beginning in 2022, you may receive a 1099-K if you received payments:
Updated CA Policy.
What's New This Year
On December 23, 2022, the Internal Revenue Service announced a delay in reporting thresholds for third-party settlement organizations. New IRS guidance states that, “[a]s a result of the delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.†Information return reporters are required to file with the FTB certain information returns, including Form 1099-K, that they are required to file with the IRS. Accordingly, for taxable year 2022 transactions, information return reporters should file with the FTB the same Form 1099-K that they file with the IRS.
mam98031
·3 years ago@dbfolks166mt
The States that have had their thresholds at $600 did so long before IRS was due to lower their threshold. As for California, I don't think they every had a threshold this low. I remember that Ebay made a mistake last year on California sellers and did create 1099Ks for them at $600 and it was an error on Ebay's part, not the threshold the state set.
dbfolks166mt
·3 years agoThe States that have had their thresholds at $600 did so long before IRS was due to lower their threshold. As for California, I don't think they every had a threshold this low. I remember that Ebay made a mistake last year on California sellers and did create 1099Ks for them at $600 and it was an error on Ebay's part, not the threshold the state set.
________________________________________________________________________________________
They actually had one on the books in 2021 that split the 1099 issuance requirements into two phases, that is, I believe, what cause part of the eBay issuance error for a lot of CA sellers in 2021. I am working on my granddaughters taxes, she lives in CA, and I had to call the CA FTB to get clarity. When I called in mid January the old guidance was in place, as provided in my earlier post, for the 1099's and the person I was speaking with said they had not made a decision on the direction for 2022.
Sometime in late January the CA FTB changed/revised their 2021 policy and elected to follow the Federal limits. It may be interesting to see what they may do in 2023. The revised guidance is also in my earlier response.
It was not a major concern since I would have reported all the income anyway but my granddaughter is not the best record keeper and I wanted to make sure the numbers aligned. Based on the current CA FTB guidance about the best I can do is use my granddaughters records.
riv.micha
·3 years agoYou understand the IRS can just look into your bank account. you need to report sales.
mam98031
·3 years agoThat is exactly why some sellers protested having to supply they bank account to Ebay for the MP program. IRS couldn't do that with a PayPal account.
yanksjetsknicks
·3 years agoThey sent out 1099-K' s for 2022 using the 600 threshold.
buyologist-3
·3 years ago"Not at all saying it's right but at the end of the day, most sellers on eBay are here to make extra income for whatever they need it for. So, they should be reporting that income."
Awwwwwwwwww~~ If only politicians and the 1% felt that way.....
mam98031
·3 years agoTwo wrongs don't make it right nor does it make it legal. You want to risk it, that is up to you.
"There is no change to the taxability of income; the only change is to the reporting rules for Form 1099-K. As before, income, including from part-time work, side jobs or the sale of goods, is still taxable. Taxpayers must report all income on their tax return unless it is excluded by law, whether they receive a Form 1099-NEC, Nonemployee Compensation; Form 1099-K; or any other information return."
https://www.irs.gov/newsroom/reminder-service-providers-others-may-receive-1099-ks-for-sales-over-600-in-early-2023
As you can see, the announcement clearly tells us that the rules for reporting income has NOT change. The ONLY thing that changed was the 1099K FORM.
714ricki
·3 years agoBe a good citizen & just report all of your sales, sales tax collected, sales desuctions, & profit. You will sleep better at night not having to worry about some 87,000 IRS agents sending you love notes to check your tax filing for completeness & accuracy. Don't play with fire & just file the paperwork!!!
Your decision!!!
crex78
·3 years agoAnd yet another IRS cheerleader. The original poster already stated that their ebay sales are not income, and that they do not have receipts for most of what they are selling.
inhawaii
·3 years ago"IRS cheerleaders" = People who pay their taxes.
crex78
·3 years agoI pay all my taxes from sales made on ebay but I understand that millions of ebay sellers are selling their items at a loss and they do not need the added hassle of having to prove what a dvd they purchased 15 years ago cost them. IRS cheerleaders want to guilt people into thinking its acceptable to be okay with all these sellers being burdened with unwarranted paper work. It is not okay.
allen1853
·3 years agoMuch ado about nothing. Report your income or cheat and don't report your income. A 1099 does not make a bit of difference, unless you are cheating on your taxes.
crex78
·3 years agoAnother IRS cheerleader. The original poster already stated that their ebay sales are NOT income.
mam98031
·3 years agoI doubt anyone here is an "IRS Cheerleader". They are simply trying to explain what the rules of IRS are. You may not like them, but that doesn't mean they don't exist or that what you are being told isn't factual.
Unavailable member
·3 years agoRegardless of what the threshold is and what you make a year in sales, income generated by eBay sales should be reported on your taxes.
motoinfo
·3 years agoWhy??? When 95% of what I sell is 1) something I already paid full price for, and 2) already paid taxes on it, now you want me to report it to the IRS AND pay at the personal tax rate!! Wow, just wow. Why don't you throw an extra $1,000 in on your tax bill for the U.S. Treasury just for good measure and be a "pay your fair share" citizen?
mam98031
·3 years ago@motoinfo
This is NOT true. You really need to do more research. There is power in knowledge and in this case there is money savings too.
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
motoinfo
·3 years agoThanks but you didn’t address the point I was making in the post. I hope you have a good CPA.
mam98031
·3 years agoNot sure what you want to be honest. I gave you links for you to review in your own time. What you stated is incorrect. The links will help you with that. It is completely up to you. I'm fine, as I understand the IRS rules that pertain to me. But you misunderstand how you value the items you are selling from your own personal stuff.
crex78
·3 years agoThe original poster already clarified that their Ebay sales is NOT income. Why do people keep harping on this point? Millions of ebay sellers sell everything they sell at a loss from what they bought it from. People using ebay to profit on collectibles fail to realize this.
mam98031
·3 years agoThis has nothing to do with whether or not the seller needs to claim their sales on their tax reports. Whether or not they make a profit has nothing at all to do with it either. But on the other hand, simply claiming the sales on your tax returns does not necessarily increase your income tax amount either. We are all allowed to take deductions for cost of the item, shipping, selling fees, shipping supplies etc.
Don't confuse income with profit, the two are not the same.
If a seller receives a 1099K, they need to show that on their income tax return. If you don't meet the threshold for the 1099K form to be released to you, you still need to show your income on your tax return. IRS has NO MINIMUM requirement for claiming income.
valueaddedresource
·3 years ago@avvid they did put out a press release via eBay Main Street stating that "As a result of this delay...only sellers who: 1) exceed the previous threshold of $20,000 and 200 transactions, 2) that were subject to backup withholding or, 3) whose states of residence have a lower reporting threshold will receive a Form 1099-K."
https://www.ebaymainstreet.com/news-events/irs-announces-delay-new-600-1099-k-tax-reporting-threshold
As others have said, the decision came through on a Friday just before a holiday so it may take a few days for the help and policy pages to be updated and for more details to be released, but for now at least they have acknowledged it.
As far as assurances they won't mess it up...that is probably being far too optimistic. 😂
avvid
OP3 years agoThank you @ valueaddedresource! That's what I was looking for, though I am also hoping for a broadcast email sent to all eBay members.
Gotta love all the IRS cheerleaders here on eBay! Unreal.
pburn
·3 years agoConversely, there seem to be a lot of unpatriotic tax evaders here on eBay, who have no idea how income reporting works. Hope they all feel good about getting over on those of us who report our incomes honestly. Sad.
crex78
·3 years agoThe original poster stated up front that their ebay sales are NOT income. They are not evading income taxes if they do not report their ebay sales.
mam98031
·3 years agoTo suggest that to any seller is to potentially get that person into trouble with the IRS. As I stated before, you are confusing income with the word profit. The two are not the same. I've posted these before, but I'll post them again in the hopes you will read them before you cause someone to get into financial trouble or even legal trouble with the IRS.
FYI, to claim your legally required income on your Tax Returns does NOT mean you will be increasing your income taxes owed. We all have the opportunity to deduct expenses from the income to arrive at our net profit or loss on the money.
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
grifter1964
·3 years agoHad gross proceeds of $625.80 and I received a 1099-K today.
mam98031
·3 years agoThere are two DIFFERENT ways for a 1099K to get released. There is the IRS threshold and/or the State threshold. The lower threshold wins. Your state has a $600 threshold, so that is why yours was issued.
https://stripe.com/docs/connect/1099-K
gary66ford
·3 years agoWrong, I was issued 1099k with 198 transactions and under 10k sales. Received it in the mail Feb 3, 2023 for tax year 2022. Apparently, Ebay is still sending them
pburn
·3 years agoAnd I'm sure you and everyone else reading this thread understands that this in no way affects an eBay seller's responsibility to report their eBay income, just as you and they should have been doing in past years, whether you received a Form 1099-K or not. Please don't think that not receiving a Form 1099-K relieves you of the obligation to report your eBay income, even if, after expenses, you don't owe any income tax on your sales.
The only change is that entities like eBay will not have to issue the forms. Nothing else has changed. Unless you, @avvid, are required for some reason to issue 1099-K forms, the IRS delay will have zero impact on you or your obligation to the IRS (and your country).
monroe67
·3 years agoI'm going to repeat pburn's post with a few highlights because it bears repeating:
"And I'm sure you and everyone else reading this thread understands that this in no way affects an eBay seller's responsibility to report their eBay income, just as you and they should have been doing in past years, whether you received a Form 1099-K or not. Please don't think that not receiving a Form 1099-K relieves you of the obligation to report your eBay income, even if, after expenses, you don't owe any income tax on your sales.
The only change is that entities like eBay will not have to issue the forms. Nothing else has changed. Unless you, @avvid, are required for some reason to issue 1099-K forms, the IRS delay will have zero impact on you or your obligation to the IRS (and your country)."
Indeed.
I don't get why everybody is raising the roof with cheers about this. ALL income needs to be reported on whichever version of the IRS 1040 series is applicable to each person's financial situation. Always was needed, and always will be needed. And eBay sellers are supposed to report their income from sales on the 1040 form.
As I said in another post, one of the very few advantages to an eBay seller not getting a 1099-K form is that they will not receive another piece of paper they have to keep track of, that they will need when they sit down to complete their IRS Form 1040, with or without a paid tax preparer.
In fact, without eBay sending me a piece of paper saying how much I earned by selling on their platform, I will have to review my own record keeping of my sales this year, and make sure I haven't omitted any transaction or any detail of a transaction. Getting a 1099-K from eBay would have given me a number I could put on my 1040 form and rely on eBay's record keeping.
Oh, I just realized another advantage to eBay NOT sending out 1099-K forms: This board will not be deluged with posts of shrieks and wails beginning on February 1, up in arms about "eBay reporting sellers to the IRS." So that is probably a good thing.
railrdricx
·3 years agoDon't confuse the issue. IRS has set a threshold for third party settlement organizations for the 2022 tax reporting year. The $600.00 Reporting Threshold implementation has been delayed until the 2023 tax year. If you received a 1099-K from eBay and your gross was under under $20,000 you are good for another year. As a result of this, Third Party Organizations will not be required to report Tax Year 2022 transactions on a Form 1099-K to the IRS or to the Payee for the lower $600.00 threshold amount enacted as part of The American Rescue Plan of 2021. That , in many case, eBay has sent us a 1099-K don't freak, all of this happened very suddenly, so do not blame eBay. If your Gross is under $20,000 no worries. I got one in 2021 and my gross was under $20,000. Just keep the records in your tax files.
mam98031
·3 years ago@railrdricx
While you may not get a 1099K, you still need to claim your income on your tax returns. The 1099k is merely a FORM, nothing more.
BTW, you had a 1099K in 2021 because your State requires it. There are some states that require this form to be issued and their thresholds are lower than IRSs are for the FORM.
https://stripe.com/docs/connect/1099-K
But make no mistake. Just because you may not get a 1099K this year does NOT mean you do not have to claim your internet income on your taxes.
dbfolks166mt
·3 years agoDon't confuse the issue. IRS has set a threshold for third party settlement organizations for the 2022 tax reporting year. The $600.00 Reporting Threshold implementation has been delayed until the 2023 tax year. If you received a 1099-K from eBay and your gross was under under $20,000 you are good for another year. As a result of this, Third Party Organizations will not be required to report Tax Year 2022 transactions on a Form 1099-K to the IRS or to the Payee for the lower $600.00 threshold amount enacted as part of The American Rescue Plan of 2021. That , in many case, eBay has sent us a 1099-K don't freak, all of this happened very suddenly, so do not blame eBay. If your Gross is under $20,000 no worries. I got one in 2021 and my gross was under $20,000. Just keep the records in your tax files.
Not entirely accurate. Individual states have their own 1099 issuance laws and you happen to live in Maryland which is one of them. Regardless of whether you received a 1099 or not you should be reporting the income on your tax return. If you received a 1099 in 2021 and failed to claim the income on your tax return the Federal IRS may not audit you but you should be concerned about your state doing so.
You should not advise people to ignore the 1099's when doing their taxes.
crex78
·3 years agoThe original poster did state that they are selling the stuff they are selling on Ebay at a loss, so I am not sure why you put "I'm sure you and everyone else reading this thread understands that this in no way affects an eBay seller's responsibility to report their eBay income".
In this very specific case, there is no income.
dryophelia
·3 years agoBut there is income.
The onus is on the seller to show how much of that income was profit.