mam98031 • Volunteer Community Member • Buyer/Seller since 1999
"Looks like the small seller on ebay is now going to have that last nail in the coffin to stop selling on ebay."
WHY?
First, The change happening to the 1099K next year is NOT for Ebay only. It is a Federal Law that applies to ALL internet sites that process the money for individual sellers like Ebay has.
Second, The 1099K does NOT mean you owe taxes on the money that is on the form. It represents your GROSS RECEIPTS which is NOT you sales or income. You have to deduct all refunds, cancellation, product costs, fees, shipping costs, etc. to arrive at your Income.
Just because you get a 1099K you do have to account for it on your Federal Tax return, but that does NOT mean it will cause you to owe any more taxes. There are exemptions for selling your personal stuff and other things. You have lots of time to do you homework and learn what those exception are so that you can easily file your taxes for the 2022 year.
Third, This lowered threshold on the 1099K has NOTHING to do with what you should have been claiming on your Federal Tax returns in years past or even this year. Everyone was always responsible to report their internet income. It is untrue that IRS had some minimum threshold of when you needed to claim your income. If you have some, you should have been claiming it all along on your tax returns.
@this*old*attic wrote:Well, most people brought it on themselves.
I’m so over this whine.
I’m 62 years old, and the $600 filing threshold has existed since at least the 70s…. and I was aware of it when I was a teen.
Ignorance is no excuse for not following the law.
Yes it did exist years ago, but for the last several years or more, IRS does NOT have a minimum for when you are suppose to report the income on your taxes. We are suppose to claim ALL income on our tax reports now.
@chapeau-noir wrote:Perhaps an unpopular opinion, but I do think the de minimis threshold could be raised. I remember the sum of $600 for lo these many years, and everything does get more expensive. A higher threshold would allow small hobby sales and a bit of patchworking to make ends meet but still preserve the greater part of the tax structure.
Except that the threshold of a 1099K has NEVER been the the threshold to be used for when to file and not to file claiming internet income.
Even if IRS was to change this and make the threshold $5000, that does NOT mean than those that have less than 5k in internet revenue to not have to claim it.
The $600 threshold should not be upsetting so many people. For those that have always claimed their internet income on their Federal tax form, they they simply continue on as they always have.
For those that have not been claiming their internet income, well there may be a little problem for them, especially if they have sold for years. BUT, there are exceptions to the rules for when the income is taxable and when it is not. For many of the sellers that are upset, they are getting bad information or don't realize that they may be an exception. They would still have to claim the income, but it would not increase their income taxes due.
Homework, research, that is what the sellers that are not familiar with claiming their income need to do. The result of that may not be as bad as others have been telling them it will be.
@perfumenmore wrote:So, tell us, how are tens of thousands of people who stop selling on platforms like this adding to state's revenues? How is taking up thousands of hours of IRS manpower policing little sellers who, in the end, won't owe anything anyway adding revenue to the federal government? Democrats are very short-sighted. If they want to save revenue, they can stop by shutting down our border, stop handing out $2500 cash cards to illegals and putting them up in hotels while Americans sleep on the streets, and stop funding religious organizations and NGOs with billions to break our laws bringing in illegals. How about that for a start?
I know seniors on fixed incomes that use ebay to help pay their taxes to keep their homes. How is taking away this source of income from them, essentially putting them in poverty and out of their homes, helping anyone?
You are making a BIG assumption that 10s of 1000s of sellers would leave internet selling. You are assuming that they are all not paying the income taxes they are suppose to be paying. And you are assuming that none of those sellers would be exempt and not have to pay taxes on their income. They would still have to claim it but that doesn't mean it would increase their tax debt.
IRS has been funded for more staff, so for the last few months they have been gearing up.
This isn't just about Democrats, that is short sighted too.
And those seniors that are selling stuff from their homes and not buying stuff to resell, are likely and exception to the rule and would not owe a dime more in income taxes. You need to do your homework. Not everyone is treated equally and some will be tax except. As I said they will still have to claim the income, but it is unlikely to cause their taxes to increase.
@perfumenmore wrote:Yes, but now you are also considered an independent contractor and subject to other taxes.
If you aren't set up as an LLC or other corporation, Sellers have always been Independent contractors / Sole Proprietors.
@nobody*s_perfect wrote:
@perfumenmore wrote: ... I know seniors on fixed incomes that use ebay to help pay their taxes to keep their homes. How is taking away this source of income from them, essentially putting them in poverty and out of their homes, helping anyone?Nobody is taking it away from them. If they choose to stop selling on eBay because they don't want to report that income, then that's their choice. After considering all the deductible expenses, standard deduction etc. probably few of them will owe anything.
Eight states and Washington DC already have lower thresholds in place. Massachusetts and Vermont have had threshold of $600 since 2018. I suspect that those states just haven't lost a significant number of their eBay sellers.
Just to add to what you said above.
