Taxes in Sold items at the end of the year
HI,
Just curious as to if the government is going tax all sales over $600 or will it be safe this year?
Thanks
dacoop1
22 comments
HI,
Just curious as to if the government is going tax all sales over $600 or will it be safe this year?
Thanks
dacoop1
az93
·2 years agoAll this fuss and bother over taxes. Do you drill the store cashier about taxes? This is America and just assume everything is taxed. Report ebay earnings and expenses like the law requires and stop fretting.
dbfolks166mt
·2 years agoAs others mentioned you are supposed to be reporting the income regardless. If you are asking will you be getting a 1099-K from eBay if you exceed $600 in funds processed through the third party financial processor there are multiple pieces to that.
1. Not sure what state you live in but a number of states already have 1099-K issuance requirements in place. I am in Virginia and the issuance threshold has been $600 since 2020. Nobody knows if any other states will pass their own laws but it would not surprise me given the inability of the federal government to get anything finalized.
2. As far as what the federal government does with regards to the 1099-K issuance threshold NOBODY can give you a definite answer at this point in time and in fact may not be able to until November/December.
Realize that this is NOT specific to eBay but covers any third part financial processor that you receive funds from. So it is possible you could get a 1099-K from not only eBay but PayPal, Venmo, Stripe, Google Pay............
heckofagame
·2 years agoLooks like the IRS may be getting another call.
Unavailable member
·2 years agoWhat exactly do you mean by "safe this year"? Safe from what?
Whatever earnings you made selling on eBay you are required by federal laws to declare them on your income tax.
dacoop1
OP2 years agoBy “safe this year†I am referring to Ebays old limits before a tax consequence ( 200 items or $20,000.
asset_liquidators
·2 years agoThere have ALWAYS been tax consequences for ANY amount of sales. Doesn't matter if it was $100 or $1,000,000. You thought anything under $20,000 was "tax free"? You better hope you don't get audited for all those years you were evading taxes.
slyders_finds
·2 years agoNarc. Lol.
luckythewinner
·2 years agoeBay does have the authority to establish any limits regarding tax consequences.
Congress and the IRS are the only ones with the power to do that.
monroe67
·2 years ago"By “safe this year†I am referring to Ebays old limits before a tax consequence ( 200 items or $20,000."
So many misconceptions.
The limits or standards for the issuance of a Form 1099-K -- $20,000 minimum with/in a minimum of 200 transactions --
are not eBay's limits, in the sense that eBay did not set those limits.
Those limits or standards are set by the Internal Revenue Service (IRS).
eBay is just one of thousands and thousands of "payers" who are required to prepare and issue 1099-Ks to their "payees" who meet those minimum limits.
The American Rescue Plan of 2021 (ARP) was written to include issuance of 1099-Ks once the minimum transaction dollar amount reached $600.00, with no minimum number of transactions required, starting with tax year 2022.
HOWEVER: For tax year 2022, the IRS came out with final rules for issuance of Forms 1099-K on or around December 23, 2022, reverting to the previous limits of $20,000 in 200 transactions. That was only eight (8) days before the end of the year, which I imagine sent lots of programmers into small freak-outs to make sure their systems were set to filter the correct dollar amount and number of transactions onto their 1099-K Forms.
For tax year 2023, the IRS issued a very similar set of final rules late in November of 2023. As a result, eBay and other payers were still required to prepare 1099-Ks for 2023 for their payees who received payments of minimum $20,000 in a minimum of 200 transactions.
That November 2023 announcement, if I recall correctly, included a projection that, for 2024, the minimum dollar amount for a 1099-K would be set at $5,000 (still more than $600.00). However, since the IRS wasn't able to publish a final decision on minimums for 1099-K reporting for 2022 and 2023 until December and November of those years, respectively, I for one would not be surprised to see another late-in-the-year announcement from the IRS that finalizes the dollar minimum for 2024.
Still addressing the OP, dacoop1, as many other people have posted, these limits only affect the point at which you get a Form 1099-K from eBay.
What YOU (and all US taxpayers) are expected to report on your 1040 tax return form is all of your income . . . .
income being defined as money coming in to you, your bank accounts, your coin purse, your wallet, etc.
Envision a Form 1040. On the first page there are many lines where the taxpayer is expected to list all their income.
When you are a US taxpayer completing your 1040 Tax Return form . . . .
YOU are supposed to write your income from your eBay sales on one of those "Income" lines . . . . Even If You Do Not Receive A Form 1099-K From eBay.
dbfolks166mt
·2 years agoSo many misconceptions. Then you add in all the other caveats.
The limits or standards for the issuance of a Form 1099-K -- $20,000 minimum with/in a minimum of 200 transactions --
are not eBay's limits, in the sense that eBay did not set those limits.
Those limits or standards are set by the Internal Revenue Service (IRS).
eBay is just one of thousands and thousands of "payers" who are required to prepare and issue 1099-Ks to their "payees" who meet those minimum limits.
Those limits can only be set by the Federal Government through formal legislation. The IRS may have input but it cannot itself set the limit. Those limits can also be set by State governments through formal legislation, which has happened in a number of states, some well before the Federal legislation was passed.
The American Rescue Plan of 2021 (ARP) was written to include issuance of 1099-Ks once the minimum transaction dollar amount reached $600.00, with no minimum number of transactions required, starting with tax year 2022.
HOWEVER: For tax year 2022, the IRS came out with final rules for issuance of Forms 1099-K on or around December 23, 2022, reverting to the previous limits of $20,000 in 200 transactions. That was only eight (8) days before the end of the year, which I imagine sent lots of programmers into small freak-outs to make sure their systems were set to filter the correct dollar amount and number of transactions onto their 1099-K Forms.
For tax year 2023, the IRS issued a very similar set of final rules late in November of 2023. As a result, eBay and other payers were still required to prepare 1099-Ks for 2023 for their payees who received payments of minimum $20,000 in a minimum of 200 transactions.
A lot of sellers, despite the delay in 2022 and 2023 still received 1099-K's even though they were well below the Federal level. Do not be surprised if additional states begin to pass their own legislation setting 1099-K issuance limits. I would think California would be high on that potential list given the budget deficit problems they are facing.
That November 2023 announcement, if I recall correctly, included a projection that, for 2024, the minimum dollar amount for a 1099-K would be set at $5,000 (still more than $600.00). However, since the IRS wasn't able to publish a final decision on minimums for 1099-K reporting for 2022 and 2023 until December and November of those years, respectively, I for one would not be surprised to see another late-in-the-year announcement from the IRS that finalizes the dollar minimum for 2024.
Added to the already complex issues with regards to this mess remember we are also in an election year and things could change considerably depending on who is elected president and which party controls the House and Senate after the election.
Personally it makes little difference to me what the Fed does I am in Virginia and I don't see them changing the current 1099-K issuance threshold it is simply generating too much additional income tax revenue.
Still addressing the OP, dacoop1, as many other people have posted, these limits only affect the point at which you get a Form 1099-K from eBay.
susanb1872
·2 years agoThe government does not tax your "sales"---it taxes your net profits (sales-expenses).
chapeau-noir
·2 years agoDon't forget to sacrifice thousands of dollars of revenue plus tax breaks so you stay under $600.
kensgiftshop
·2 years agoYou reporting your income hasn't changed, you're supposed to be reporting all your income, doesn't matter the amount.
dacoop1
OP2 years agoI do believe if you dont own a business and use Ebay as a way to sell your items you are not required by law for the sale. I dont have a tax id, it use to be sale of up to 200 items or 20,000 required reporting until the new tax law went into effect. But that got put on hold. How many times is an item allowed to be taxed? Then you got if you can prove you sold it for a loss theres no tax to report. Too much red tape.
mtgraves7984
·2 years agoHow many times is an item allowed to be taxed?
@dacoop1
Regarding sales tax, I suppose it's subject to be taxed every time it's sold. For income tax (to you), report it just the once.
asset_liquidators
·2 years ago"I do believe if you dont own a business and use Ebay as a way to sell your items you are not required by law for the sale."
Well, you are sadly mistaken.
"I don't have a tax id, it use to be sale of up to 200 items or 20,000 required reporting until the new tax law went into effect. "
Again, you are sadly mistaken. All those years you have been evading taxes was NOT "tax free" money. You have ALWAYS been required to report your income whether you received a 1099 or not.
susanb1872
·2 years agoYou do have a tax id number. For individual taxpayers, your tax ID is your social security number and that is what ebay will use to report your gross proceeds based on whatever the tax law is for reporting.
brightlightbookseller
·2 years agoAll income is to be taxed, unless you make a total of less than (I believe) $400 from any source.
winterpalace25
·2 years agoAll income is taxable unless it is offset by business deductions on Schedule C or the Standard Deduction on the 1040. The $400.00 number refers to the threshold whereby you also have to pay Self-employment tax of around 15% on your profits. This is like you paying the employee share of Social Security tax and the employer share both. If you have a profit of $399.00, you don't pay this additional tax. If your profit is $400.00 or above, you do.
kensgiftshop
·2 years agoWrong, that is when the payment processor has to report your income, no you.
You're supposed to be reporting any extra income on your taxes, no matter what the amount is.
I don't own a business and I've been reporting all my income for years and it's never been a problem.
albertabrightalberta
·2 years ago*Sigh*
Nothing in the laws have changed.
EVERY seller is expected to claim their sales, whether there's a 1099K form or not.
The only thing that changed (so far) for the 2023 year is that the 1099K FORM wasn't sent for sales of $600. Again, that doesn't mean you aren't expected to claim the income and if appropriate, deduct your costs to get to the amount of profit that is taxable.
inhawaii
·2 years agoThe government is taxing all sales over AND under $600.