IRS Reporting in up coming years! Gonna make eBay lose big business? All this will create a mess
I posted earlier bout this. I know they is people buying, say widgets for $5 and selling for $20 and making big money. They is people probably building cellos in they basement for $100 and selling for a $1000 on ebay. Making big $$
And they is people like me, just selling little. Amazing 2023 I had 157 total sales. my gross sales $5033 NET SALES $3100
EXCLUDING things given to me, I made next to nothing. I bought tennis rackets for $300 sold for about $500
I can just say I paid $500 and made nothing. Many things I lost $$ on How IRS gonna know MY PROFIT on anything???????????? GROSS SALES almost meaningless
Everything can be written off, as it will never be possible to know your income/profit from this.
DO anyone know if this is applicable to ALL online selling platforms? Logically it should be places like Etsy Bonanza, Marketplace etc???????????? This is going to hurt ebay as its biggest and I know I will quit before $5000 so I does not have to blank with more tax stuff This should stay at $20K I see people selling INDIVIDUAL fishing lures got 200-300 listings You cost is $4 ship a lure this gummer gonna have to go thru 2000-4000 small sales and and come up with a net profit??????????????????????
Thinking a short sell of ebay stock in order haha
dy60609
·2 years ago@rosemary6525
No worries about $20,000, $600, or $5000, or when you stop for 2024.
The IRS watches a lot of online stuff. Others may even alert the IRS to possible revenue sources observed.
Very likely they now have your # and will be anxiously waiting to see your 2024 tax return, and also amended returns for previous years if you have misunderstood past tax liabilities.
kraftique
·2 years agoRose, just get yourself an nice accounting software system and record everything. Then educate yourself about depreciation of office equipment, the cost of what you buy in supplies, and even the square foot of space you use for your business(if you have a mortgage) your take that percentage and write that off on your Business taxes. If is operational costs.
Do this every day and you will learn it quickly and it will come rather easy. It will even be fun to see how you can improve your selling.
luckythewinner
·2 years agoThinking a short sell of ebay stock in order haha
Short selling individual stocks is a fairly risky move that requires insight and understanding and research. Given the general lack of insight, knowledge, and research you have shown about how eBay and income taxes work, I am not sure making bets on their stock price is a good idea.
mam98031
·2 years ago@rosemary6525
I think you just have some misunderstandings you need to clear up. The 1099K is merely a FORM and nothing more than a FORM. It does NOT set the amount you report to the IRS for you income. With or without a 1099K Form, you are suppose to report your income to the IRS.
Your Gross sales is not what you are taxed from. You do get to take all your legit deductions to arrive at your taxable income and that is the portion you would pay taxes on. And it may or many not increase your taxes owed depending on your other numbers you are reporting to the IRS.
So in 2023 you should be reporting what you got on Ebay even though you did not receive 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
kensgiftshop
·2 years agoIt doesn't matter if Ebay reports your income, you're supposed to be reporting your income and that hasn't changed.
Unavailable member
·2 years agoIt doesn't matter if you receive a 1099 or not, you are required to report your earning from sales on eBay even if you earn $100.00.
You should be reporting your sales from last year regardless of 1099 or not. I didn't receive a 1099 , I haven't for years, but l still report my eBay earnings.
The threshold is only, and I repeat ONLY for eBay to submit the 1099 to the IRS.
Also many states have much lower tax reporting thresholds.
You should talk to a tax professional to find out what the reporting thresholds are in your state and file your taxes like the rest of us do.
asset_liquidators
·2 years agoIt doesn't matter if you made 5k, 20k, or even just a few hundred dollars. You are supposed to be reporting it on your taxes whether you get a 1099 or not. Anything under 20k was not "tax free money" and anything under 5k is not tax free money. What you are saying you are doing (or going to do) is tax evasion.
lacemaker3
·2 years agoYou are probably 100% correct, but I don't think that has anything to do with the OP @rosemary6525's point.
I think OP's point has more to do with not knowing anything about the IRS and not acknowledging that the IRS has any relevance or input into OP's life. OP does not acknowledge or accept owing anything to the IRS or the US government.
rosemary6525
OP2 years agoyou need to get a life as many comments as you have left , you obviously do not have 1
deltilogical
·2 years agoI think the 1099 reporting along with MP has changed Ebay already - the casual sellers can't and don't use this platform as much - they're using facebook or other social media market places.
Even if a 1099 amount isn't reported, one should expect that the transmittal of funds, such as from ebay to a bank account, creates a record.
monroe67
·2 years agoI don't think the decrease in the 1099-K reporting threshold is going to hurt eBay, not on a corporate level.
"DO anyone know if this is applicable to ALL online selling platforms? Logically it should be places like Etsy Bonanza, Marketplace etc????????????"
The IRS doesn't care whether you earn money from selling on eBay only, or partly on Etsy, Bonanza, Facebook Marketplace, Reverb, Mercari, Poshmark, or any other possible online selling platform. Or a table at the local swap meet. Or a garage sale.
A friend of mine used to keep her eyes on the sidewalk on her morning walks and pick up loose change. Theoretically and technically, all those coins are supposed to be reported as "miscellaneous income" on her 1040 Form. If you win $2.00 on a Lotto Scratcher, you are also supposed to include that in your income when you fill out your 1040 Form.
The IRS expects all of us taxpayers to report all our income on our 1040 tax return forms.
"Income" means, of course, money coming in to you. Then, as you say, you are allowed to deduct reasonable costs.
12345jamesstamps
·2 years agoYes...thank you.
It's like does a 10 year old child need to report making money from a lemonade stand....
yuzuha
·2 years agoI'm really, really hoping that a lot of sellers do exactly that, frankly. Less competition for the rest of us.
ten_o_nine
·2 years agoit's always a good idea to double-check your grammar and spelling before posting online. It can help ensure your message is clear and easy to understand.
lacemaker3
·2 years agoOP is not posting in standard English. Their post appears to be in African American English, also known as Ebonics. It is probably perfectly correct in grammar and spelling (for that dialect/language). This dialect (or language) is completely comprehensible to speakers of standard English, for the most part, despite the obvious differences.
OP appears to throw grenades in Ebonics, and then doesn't respond again on those threads as a matter of course. It is probably deliberate.
toysaver
·2 years ago"How IRS gonna know MY PROFIT on anything???????????? "
Anyone savvy enough to fill out eBay's listing form can also fill out a Schedule C form.
redlinear
·2 years agoBut, I understand you're thinking on the fishing lures.
I bought out a tackle shop that was closing it's doors.
I paid 25% of listed price. ($3500 total)
One bag of plastic worms was $4, I paid $1
I must have bought 1000 bags of plastic baits.
Those were selling on eBay at $3.00 per bag. (I've still yet to figure out how).
My only option was to list in quantity, Lots.
Pretty sure I lost money on that stuff.
However, I did buy a bunch of $100 single lures for $25 each.
Sold those really fast at $75 each.
Made money on those.
SO, at the end of the year? I had fishing lure sales of $8500. I had $2,800 in ebay fees, shipping, expenses.
And I had a receipt for $3500 where I bought them.
Net profit was $2,200 (of which, I paid about $500ish in taxes). Leaving me $1700
And I still have enough fishing lures to sink a bass boat.
Not too bad if you don't mind working for about $3 an hour.
Sad, but, true. I won't do that again.
ed8108
·2 years agoIn 2024
On the positive side, some money is better than no money, you didn't lose any money
rosemary6525
OP2 years agothanks for sharing that is a wild story I see now you only sell truck/auto parts Selling individual lures really not worth it anymore with $4 min shipping I run a few auctions to try and combine lures but probably will soon quit I remember $1.73 to ship 4oz packages. Believe it or not there are sellers with 200-300 listings of individual lures
redlinear
·2 years ago@rosemary6525
Have to be careful with what you source (buy) in order to re-sell.
I have no idea how anybody sells individual little anything for $4.00 with free shipping.
I understand some $ is better than nothing, but that's just punishment.
mam98031
·2 years agoSellers that do this bank on a buyer purchasing multiple items and then they can combine shipping. They make the money off the shipping because as you stated, selling anything for $4 w/ free shipping is unlikely to give you a profit of any kind and may actually cause you to lose money. At least that is what I typically see.
This seller is making even less as they will ship multiple items for the one $4.00 shipping fee. They say so in their listings. It is highly unlikely they are making any money off their auctions for $1.11 plus $4 shipping.
This is stated on their listings:
toomuchstuffagain35
·2 years agoWhen I've run out of space for certain categories, I may run a sale where I'm pretty much only making back what I paid, BUT I get sales, I free up space for new stuff and I get some cash back to buy better inventory.
Somehow over the years I've accumulated a bunch of smaller value lightweight stuff and trying to clear those out of inventory to make room for higher ASP goods.. What's left after the sales I'll just donate. I need the space right now more than the $.
yuzuha
·2 years agoI do the same thing sometimes when I have bulky stuff that's been sitting around for a while with no interest. Better to take the smaller amount of money and free up some space than to have duds sitting around taking up storage space that could be used for more profitable inventory.
toomuchstuffagain35
·2 years agoI think so too, but some don't get it.
It's like trying to explain to your boss that you'd rather have the time off than the OT lol
mam98031
·2 years agoOh heck, I've been here a long time and I most certainly have ran sales or lowered pricing on old stock to get it moving that may cause me to break even or maybe a little less. That I haven't been addressing. The OP is using certain methods of designing their listings on a regular basis, not a fire sale.
redlinear
·2 years agoIf you're buying widgets for $5 and selling for $20 on eBay, you'll figure out real quick that's not working.
And of course, you can "say/claim" you paid $20 each for those widgets. AND, you might get away with it once, or forever. But, odds are, some IRS agent or artificial intelligence, or whatever....is going to see that and say "Hey, nobody's that dumb", lets check that out "audit".
Then, you must prove you paid $20 per widget.
And the last fishing lure I sold? About a month ago.... $385
itsjustasprain
·2 years ago...and apparently did not read ANY of the answers trying to explain the facts to you. None of this is specific to Ebay. Go back to your previous thread and check it out as there is a lot of useful info to be found there.
Here is your previous thread:
https://community.ebay.com/t5/Selling/TAXES-2024-amp-2025-5K-then-only-600-for-Calendar-YEAR/td-p/34399070
fern*wood
·2 years agoHave you read anything in the other thread you started? The 1099k doesn't matter. Sales are supposed to be reported on your taxes...since forever.