1099-K Why?

[dtkhobby13]

I may have missed this discussion on the 1099-K.  I received one for the first time this year.  Never got one when PayPal was in place.  My understanding is you only get a 1099-K when transactions are 200 or sales are $20K.  Also, I didn't think you had to pay tax on sales when you are reselling.  

Any advice would be appreciated.

Thank you!

Teresa

[rebell45]

Some states require that eBay provide one for lower amounts of sales. Not sure that yours is one of those but that may be the reason. The 200/$20K threshold is the Federal requirement. You would have to study the tax laws or ask a tax accountant whether of not your profit is report-able or taxable.

[mcdougle4248]

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@dtkhobby13 wrote:

I may have missed this discussion on the 1099-K.  I received one for the first time this year.  Never got one when PayPal was in place.  My understanding is you only get a 1099-K when transactions are 200 or sales are $20K.  Also, I didn't think you had to pay tax on sales when you are reselling.  

Any advice would be appreciated.

Thank you!

Teresa

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Looks like VA may have made some changes.

https://www.tax.virginia.gov/sites/default/files/inline-files/tb-20-10-virginia-1099-k-filing-requir... 

[dtkhobby13]

Thank you mcdougle4248!  I did find the same poking around VA's site.  At this point I realize I will need to add the $ to my return.  I'm now at the point to decide whether to file Sch. C or include it as additional income on 1040.  I'm curious what other low level sellers do.

[lacemaker3]

@dtkhobby13, if you just include it as income, you will have to pay tax on the entire amount. If you file Schedule C, you will be able to deduct all your expenses, include the cost of goods sold, postage, packaging supplies and eBay and PayPal fees. For many small sellers, the expenses are more than the income, so it reduces the amount of income they have to pay taxes on.

[mcdougle4248]

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@dtkhobby13 wrote:

Thank you mcdougle4248!  I did find the same poking around VA's site.  At this point I realize I will need to add the $ to my return.  I'm now at the point to decide whether to file Sch. C or include it as additional income on 1040.  I'm curious what other low level sellers do.

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I am a small seller.  I always file a Schedule C.  The Schedule C is where you can take your deductions for shipping, supplies, fees, use of vehicle, etc. which lowers the amount of the income you have to pay tax on.

[dtkhobby13]

Thanks so much! I appreciate the advice, I was thinking that would be the better way.

[dtkhobby13]

Thank you!  I appreciate your advice 🙂