1099-K

[woodys-collectibles-and-more]

Well I guess its' time to say goodbye to selling on ebay. Been selling here for a long time , but new tax law will kill all profits.  Will be deleting all items for sale in the morning.  woodys-collectibles-and-more   If anyone buys anything overnight. all funds will be sent back to buyers.  

[maxine*j]

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@coolections wrote:

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@katzrul15 wrote:

You've been on e-Bay since 2002...20 years.  Just beyond comprehension.  No words.

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What's beyond comprehension is those that say they've paid taxes all these years making less than 20K.

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What people are saying is that they played it straight and reported the income, and then paid any raxes dues on it..  Taxes due depends on the individual' situation, of course, from none to a lot.

=

[luckythewinner]

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@coolections wrote:

The rest of us part timers had no reason to pay taxes and would have been crazy to volunteer to do so.

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I have reported my online income (eBay combined with other sites, when I use them) without fail since I started selling. And never once in all those years have I had $20K in income. 

I do not think it is "crazy" to suggest that some people may be honest and have complied with the law. Nor do I think it is "crazy" that some people might know someone who was audited by the IRS and want not part of that. 

[forgottenape]

dont throw other people under the bus thats coming for you. why is it people breaking the law try to convince everyone else everyone does it.

[forgottenape]

amen............ if you have ever had dealings with the irs in a negative way youd be singing a different tune. i once recieved a bill for over 60 grand because i turned in the wrong **bleep** years form. an honest mistake easily resolved but i still had to pay close to 20000 in  penalties. no other recourse. so yes if i have a **bleep** garage sale i report the cash sales to the irs

[maxine*j]

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@coolections wrote:

@katzrul15 

Of course you would pay taxes. You make 75K a year staying at home selling on Ebay. Only a fool would not claim that. The rest of us part timers had no reason to pay taxes and would have been crazy to volunteer to do so.

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No reason?  How about the law? We're not talking a voluntary matter here.

Actually, most casual sellers probably do not owe federal income tax on their eBay income, but that doesn't eliminate their need to report the income -- unless they need not file returns at all, which is also true of many. 

But most eBay sellers who come here to complain about the new 1099 rule evidently would need to file and would owe tax on their eBay sales if they reported them:  They say outright they're leaving eBay now because they can no longer hide unreported, taxable income.

=

[m60driver]

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@woodys-collectibles-and-more wrote:

Well I guess its' time to say goodbye to selling on ebay. 

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It doesn't bother me that small sellers did not report trifling amounts of income when you have tax loopholes that allow the corporations and the wealthy to to avoid taxes on income ten times that amount, or even far more.  But it does come down to profit margins. If your profit margins do not allow one to anticipate taxes now that one will have to report that income then one must revaluate one's business model and many small sellers with lower profit margins will have to stop selling.

Alas, the same clueless politicians, on both side of the aisle mind you, are so removed from the lower middle class life in the USA that they do not understand that this new $600 minimum will cost the government more to enforce for the smallest of sellers then it will generate in tax revenue.  It would have made far more sense to lower the threshold to say about $2,000.

[luckythewinner]

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@m60driver wrote:
Alas, the same clueless politicians, on both side of the aisle mind you, are so removed from the lower middle class life in the USA that they do not understand that this new $600 minimum will cost the government more to enforce for the smallest of sellers then it will generate in tax revenue. 

 I'm not sure I follow. Based on what I have read from people who have posting about the $20K limit, here is how "enforcement" works:

1) A computer program at the IRS checks your return to see that your 1099-K income is accounted for  (i.e. on your schedule C, schedule 1, capital gains, etc.) The computer program already does this now.

2) If the 1099-K income is not accounted for, the computer program adds that income to your return, recalculates your new tax liability, and sends you a bill for the difference. The computer program already does this now. 

3) You get the bill and either pay the bill or file an amended return.

IMHO since that computer system is already in place and doing this for 1099-K forms, "enforcement" will cost next to nothing.

Where do you see the added enforcement cost for the IRS?

[dq3141]

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@luckythewinner wrote:

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@m60driver wrote:
Alas, the same clueless politicians, on both side of the aisle mind you, are so removed from the lower middle class life in the USA that they do not understand that this new $600 minimum will cost the government more to enforce for the smallest of sellers then it will generate in tax revenue. 

 I'm not sure I follow. Based on what I have read from people who have posting about the $20K limit, here is how "enforcement" works:

1) A computer program at the IRS checks your return to see that your 1099-K income is accounted for  (i.e. on your schedule C, schedule 1, capital gains, etc.) The computer program already does this now.

2) If the 1099-K income is not accounted for, the computer program adds that income to your return, recalculates your new tax liability, and sends you a bill for the difference. The computer program already does this now. 

3) You get the bill and either pay the bill or file an amended return.

IMHO since that computer system is already in place and doing this for 1099-K forms, "enforcement" will cost next to nothing.

Where do you see the added enforcement cost for the IRS?

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Some people think that everybody who files a return that doesn't match the IRS numbers will get called in for an audit. But what happens is what you described: the IRS recalculates for you, and sends you a bill (or in some cases, a refund).

[heckofagame]

See ya!

[wildpitchsports]

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@dq3141 wrote:

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Some people think that everybody who files a return that doesn't match the IRS numbers will get called in for an audit. But what happens is what you described: the IRS recalculates for you, and sends you a bill (or in some cases, a refund).

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I've seen people telling others on here "don't report household items at a loss."

If you receive a 1099K for sales in the 2022 tax year in Jan 2023 and don't add it to your return in some capacity , in my opinion you're going to have some serious problems.

[m60driver]

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@luckythewinner wrote:

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@m60driver wrote:
Alas, the same clueless politicians, on both side of the aisle mind you, are so removed from the lower middle class life in the USA that they do not understand that this new $600 minimum will cost the government more to enforce for the smallest of sellers then it will generate in tax revenue. 

 I'm not sure I follow. Based on what I have read from people who have posting about the $20K limit, here is how "enforcement" works:

1) A computer program at the IRS checks your return to see that your 1099-K income is accounted for  (i.e. on your schedule C, schedule 1, capital gains, etc.) The computer program already does this now.

2) If the 1099-K income is not accounted for, the computer program adds that income to your return, recalculates your new tax liability, and sends you a bill for the difference. The computer program already does this now. 

3) You get the bill and either pay the bill or file an amended return.

IMHO since that computer system is already in place and doing this for 1099-K forms, "enforcement" will cost next to nothing.

Where do you see the added enforcement cost for the IRS?

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People who forget to file a Schedule C, or don't understand a Schedule-C, will be calling the IRS to figure out how to challenge the taxes on the  gross income and not the net income.  The algorithm you describe assumes no cost to the goods sold.  All this will lead to misunderstanding, conflict, and associated added costs, especially for the trifling amounts of tax due on say a $1,000 gross.  I figure I have pretty high net profit margins of 30%,  so on $1,000 gross that is $300 of declared net income.  So about $60 or less of taxes due for such a small seller.  The cost in time to handle the confusion will be greater than the $60.  That is just one reason why I think a minimum of closer to $2,000 would make more sense.  Another reason is that for most people the cost of filing a Schedule C will be an added $100, at least using TurboTax.  That is a ridiculous expense for someone grossing less than $1,000.

The more long term impact will be the further alienation of many small sellers to the government, the last thing we need in such divisive times where, for lack of a better metaphor, the dark side of the force is in ascendance.

[bearswatching]

I don’t know how many times this has to be repeated. There...is...no...new...tax...law. 

[firesteel_surplus]

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@woodys-collectibles-and-more wrote:

Well I guess its' time to say goodbye to selling on ebay. Been selling here for a long time , but new tax law will kill all profits.  Will be deleting all items for sale in the morning.  woodys-collectibles-and-more   If anyone buys anything overnight. all funds will be sent back to buyers.  

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You do realize no matter where you go, you'll get a 1099, right?

And this dead horse is getting so bloated, I think the poor thing is going to explode on us one of these days and that is going to be messy.

Mike

Firesteel Surplus

[bashort]

It does not affect me but I do dislike the new IRS rules as I believe that they are just being used as punishment.

That being said a good portion  of those that that are somewhere between $600 and the old $20,000 limit will find that they will not be paying any more tax then they did before for the simple reason that many things will become deductible that were not before, also go ahead and get a sales tax#, opens up lots of possibilities

[this*old*attic]

Expenses and losses can only go so far. 🙄

If one TRULY made no money year after year into infinity….why bother?

That’s one of the things the IRS will get around to, I’m sure.