mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@wildpitchsports wrote:
@nobody*s_perfect wrote:Why bother with a LLC? Any seller can file a Schedule C and deduct their expenses to minimize their tax obligation.
Some people have situations where they simply cannot "eat" all that extra income - be it net or gross.
Best avenue in my opinion is to just separate them altogether.
If people are filing their taxes correctly there should be a BIG difference between Gross Income and Net Income [after expenses]. Taxes are calculated on the Net Income.
Keeping in mind that 1099Ks DO NOT report Gross Income or sales. The form reports Gross Receipts. Which is BEFORE any deductions are taken for refunds, cancellations, expenses, etc.
@wildpitchsports wrote:
@mam98031 wrote:
@wildpitchsports wrote:
@nobody*s_perfect wrote:Why bother with a LLC? Any seller can file a Schedule C and deduct their expenses to minimize their tax obligation.
Some people have situations where they simply cannot "eat" all that extra income - be it net or gross.
Best avenue in my opinion is to just separate them altogether.
If people are filing their taxes correctly there should be a BIG difference between Gross Income and Net Income [after expenses]. Taxes are calculated on the Net Income.
Keeping in mind that 1099Ks DO NOT report Gross Income or sales. The form reports Gross Receipts. Which is BEFORE any deductions are taken for refunds, cancellations, expenses, etc.
Again, people have instances (disability, insurance, benefits just to name a few) where they simply cannot eat a gross or net income addition.
The amount of posts about this clearly show that is the case, for those not afraid to talk in fear of these kind of abrasive responses.
Wait until 2023 when people get wrecked & lose life sustaining benefits because they sold $601 worth of junk or things they never use.
The outcry then will be outstanding.
And then, only at the end, will they realize - elections have consequences.
Then they will be happy to know that they will never have to pay more taxes or have their benefits reduced due to "GROSS Income", unless they tell IRS they had no expenses at all, which of course isn't even possible.
Also it is likely that most of the sellers you are most concerned with are selling stuff from around there home. Which if they read up on the subject, they will learn that they are not likely to pay any income taxes on that money.
You have a point as I'm confident some will not take the time to learn what is counted as income and what is not and therefore they will file their reports incorrectly that could cause them issues.
I'm not insensitive to people that have benefits whether state or federal. There are protections for them, they just need to learn about them. It is a very important subject.
Ebay is going to have a Podcast in the near future on the 1099K subject. it isn't currently scheduled. But once it is a few of us that have been trying to get this to happen will post all over the forums of the time and place for the Podcast so as many sellers as we can reach will be able to attend.
@keha-5838 wrote:It's a new, or amended, income tax law that targets sellers who make a minimum of $600, from online sales in a year. I like to sell my used figures here and there, to help cover my bills (since my wife is unable to work), but the added tax makes it unfeasible for me. So to me, it's basically a poor people tax.
This is a large part of the problem. People assuming stuff without taking the time to actually learn what the impact of the lowered threshold on a form [not a new tax law] actually has on them.
When IRS created the 1099K it was created to help prevent so many people for not claiming their income on their Federal tax returns when they were always suppose to. It was to help with the number of people committing tax evasion.
They lowered the threshold on the 1099K again for that reason as too many people under the 20K threshold were still not claiming their income from the internet on their Federal tax returns as they were always suppose to.
So for those that have always claimed their income to IRS, they have no worries about the lowering of the threshold on the 1099K. It simply will not change anything for them except possibly the addition of another form to account for.
For sellers that sell their own stuff. Meaning stuff they have had around their house for years, it is highly unlikely that you would have any additional income taxes because of it. If you get a 1099K, you will have to include it on your Federal tax return, however it is unlikely due to the type of stuff you sell that it will have any impact at all on how much you will pay in income tax.
I suggest you do your homework and LEARN what this change means to you before you jump to conclusions and cost yourself some cash flow that you really don't need to.
As to "poor people". There are tax breaks in place for them. You are ASSUMING this will increase the taxes they owe and that is no necessarily true at all.
@wildpitchsports wrote:
@mam98031 wrote:
You have a point as I'm confident some will not take the time to learn what is counted as income and what is not and therefore they will file their reports incorrectly that could cause them issues.
I'm not insensitive to people that have benefits whether state or federal. There are protections for them, they just need to learn about them. It is a very important subject.
Ebay is going to have a Podcast in the near future on the 1099K subject. it isn't currently scheduled. But once it is a few of us that have been trying to get this to happen will post all over the forums of the time and place for the Podcast so as many sellers as we can reach will be able to attend.
That's great news I hope it reaches as many people as possible! I will help spread the word definitely.
When it actually gets scheduled, I'll post the date and time. It would be great if you spread the word, but please wait until we know when it will be held.
@wildpitchsports wrote:
@keha-5838 wrote:It's a new, or amended, income tax law that targets sellers who make a minimum of $600, from online sales in a year. I like to sell my used figures here and there, to help cover my bills (since my wife is unable to work), but the added tax makes it unfeasible for me. So to me, it's basically a poor people tax.
It's not a law change it's just a reporting trigger change for the 1099K to be issued. But I agree, it's just another way the poor and vulnerable they want to "protect" so badly will get wrecked and unable to make ends meet.
See this doesn't help. @keha-5838 is talking about selling items that are not likely going to have any impact on the amount she pays in income tax with or without a 1099K being released to her. There simply is no need to cause concern where concern doesn't need to be. As long as they are only selling their preowned stuff.
@wildpitchsports wrote:
@keha-5838 wrote:Honestly, the new tax law just makes me not want to sell online anymore.
You're not alone. Thousands that were aware this year and potentially millions next year will feel the exact same way.
To some they think it will eliminate competition but hobbies and collectibles will become a lonely echo chamber once people are forced to give them up.
You are correct. There will be lots of sellers that are simply not aware of the impact the new rule for the 1099K will have on them until next year when they receive one.
Then there are those that know right now about the change but are not informed as to how it will impact those that sell only there stuff from their closets or from around their own house. We will likely lose a lot of sellers that assume they are going to have a problem when if fact if they learned more about this change they would likely find out that their income taxes would not increase.
It is logical to think that the competition in the vintage and collectible categories will decrease because of this change, however it is unfortunate that many of them likely are coming to the wrong conclusion and costing themselves money when they don't need to stop selling. They just need to learn the rules.
