1099 600 dollar Threshold update please.

[flutterybutter]

Hi.... I've seen so much conflicting information about the new 600 dollar threshold for 1099's in 2022.... many of it outdated, not just conflicting, and the last time I asked Ebay directly that said they have no information that anything has changed and that currently the 1099 threshold is still $20,000 + 200 transactions.  Maybe I'm wording it wrong, but I can't seem to get a truly definitive answer from google either.  Was hoping someone had some current information about this change, if it is in fact going it change, and if possible I'd appreciate a link or guidance to the source of the information.  Thanks.

[r4amuro75]

So is this $600 on 1 transaction? Or $600 total in the 12 month period?

[skeletonstore]

Depends upon the state.  Some states like Massachusetts have had the threshold at $600 since 2018.  Keep in mind this is not a new tax law but a new reporting system that is being nationalized. Income generated on ebay and other website was always suppose to be reported. This whole thing has to do with credit card processing.  Paypal only started reporting things in either 2010 or 2011.  The tax system has not changed.  The way things are reported has.  Just because ebay didn't send you a 1099 in the past or paypal before does not mean you weren't suppose to declare that income yourself.  Now keep one thing in mind I do not consider this to be fair since most people selling things that aren't too much more than $600 are selling old junk and are not exactly set up like a corporation who has had years to build a business model and send lobbyists to washington to make laws and loopholes that favor them.  I'm just telling you how it is and always was to be technical . I mean let's be Frank, people who love to pay taxes and feel good about doing so probably do to the dentist like Jack Nicholson in Little Shop of Horrors and beg for the drill even if they don't have any cavities.  😄

[wildpitchsports]

Total.

[cleaningoutmyclosets17]

This is the boat I am in. We are moving to another state in 6 months and thought it would be nice to sell some stuff we don’t want to move to help with moving expenses. 
I would be taking a major loss on everything but haven’t kept receipts for personal items purchased over the years to prove that I didn’t make a profit. 

$600 is such a ridiculous cap. 

I guess Craigslist and FB marketplace is the only places left for people to sell their old crap. 

[Anonymous]

But  there  is  a change..   For  those  like  me  who  sell  everything at  a loss  I  have  no  taxable  income.

But  getting  a  1099   means  I  have  to  provide  proof  of  the  original  cost  for  those  items  which  I no longer   have.   Or  are  you suggesting  I  don't  file  a  schedule  C?

[fatesfan]

My CPA told me this took effect last year

[fatesfan]

I lived through this and don't agree with these answers whatsoever. I've never considered myself a small business and have been selling stuff for the past 20 years on and off. Sporadically I list on ebay, and Marketplace.  For the 2021 tax season (last year) out of the blue i get a 1099 for Paypal. Then another paypal. Then Ebay. Then Marketplace. I'm like **bleep** is going on. I had 5 grand in sales of everything combined. Went to H&R Block, their reply is guess what you're a small business now. Had to suddenly come up with made up spreadsheets and costs and write off fees and all this junk. 
Anyways - a majority of people keep insisiting this doesn't take affect til 2023 tax year and what i experienced was that last tax season i already got hit with the 'new law'. BTW what a thing to do to people living through a pandemic. The one time people need to clear out closets and make side cash to feed the family and pay rent.  All For a measly 5 grand across all platforms combined

[mam98031]

@flutterybutter 

Yes starting 2022 the minimum threshold on the FORM known as the 1099K was reduced to $600.  So when you get your 1099K in late January of 2023 for 2022, it will reflect this.

A very important thing to remember is that the minimum threshold on a FORM does not and has not EVER set the minimum requirement for the IRS for everyone to report their income on their federal tax returns.  IRS has no such minimum requirement.  

So for those that in past years have sold between $600 to $19,999.99 on the internet, you were suppose to be reporting your income on your federal tax return too.  

Don't get confused by the minimum requirement on any given FORM to == the minimum requirement for reporting income.  A form, any form does not set this for IRS, it is merely the rule for that specific form.