1099 questions

[workbob567]

I have a dumb question what aer the limitations on getting  a 1099 for this year. I have read several different things. Most said 5000 dollars and over 200 transactions. But what if I have over 200 transactions but don't reach 5000 in sales. I just want to make sure i have my poop in a group so I can do my taxes correctly.

[nobody*s_perfect]

The IRS has not yet made any official announcement about what the threshold will be for 1099-K's in 2024.

Last November, they announced that the threshold for 2023 would be $20,000, and that they planned for a threshold of $5,000 for 2024, with no mention of any threshold for number of transactions. But that is not official yet.  In 2022, the IRS announcement about the threshold came out even later: in December.  So we only know that they'll announce it some time before December 31.

Lower thresholds, such as those already in effect in several states, are usually accompanied by a lack of any specifications about number of transaction, so it's a default of 1.  

Here's a link to the IRS memo from last November; I'm not aware of any more recent announcements which address this topic.

https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-...

[kensgiftshop]

Right now it's $600.

[stuff4divas]

@workbob567  the 1099 is not relevant to reporting all income minus write offs, otherwise it is called 'tax evasion'

[mam98031 · Accepted solution]

@nobody*s_perfect  is absolutely correct.

I doesn't really matter however.  It is only a form.  You are still responsible to report your income whether or not you receive a 1099k form.

Also keep in mind that a 1099k form is issued for your total amount of money that came into your MP account before any deductions are taken.  So it is the total buyers have paid you for the product and shipping.  

[ebooksdiva]

According to eBay Reportable criteria on eBay and Form 1099-K policy 

The current reporting threshold to for eBay to report your income to the IRS in a 1099 is $600.

But even if you earned $1 you are still supposed to claim your eBay earnings in your taxes. 

[jerrkasic_0]

Why does the IRS site say the limit is $5000 for 2024?  Who is correct, EBay or IRS?

[mam98031]

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@jerrkasic_0 wrote:

Why does the IRS site say the limit is $5000 for 2024?  Who is correct, EBay or IRS?

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You are skipping over the EXACT words uses.  "PLANNING" is a hugely important word.  They have not yet announced that this plan has been approved.

It really doesn't matter.  With or without a 1099k, we are responsible to report ALL our income.

Myth: If taxpayers didn't receive a Form 1099-K, they don't have to report income.

Fact: According to federal law, all income is taxable unless it is specifically excluded by tax law. Taxpayers should report any profits from selling goods or services, regardless of if they receive a Form 1099-K.

https://www.irs.gov/newsroom/irs-never-mind-the-myths-know-the-facts-about-receiving-a-form-1099-k-i...

[dbfolks166mt]

Why does the IRS site say the limit is $5000 for 2024?  Who is correct, EBay or IRS?

     Possibly both. First the $5,000.00 is currently only a recommendation by the IRS and nothing has been codified. It is also just the Federal requirement, some states already have lower thresholds for issuance. In either case whatever the federal or state level happens to be that is only the threshold at which the law requires it.

     There is nothing stopping eBay from setting it's own issuance level regardless of what the law(s) are. EBay may have just decided due to all the uncertainty to issue a 1099-K to any seller that exceeds $600 in total gross sales for the 2023 tax year. 

[nobody*s_perfect]

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@jerrkasic_0 wrote:

Why does the IRS site say the limit is $5000 for 2024?  Who is correct, EBay or IRS?

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The IRS has not said that the threshold will be $5000.  Last November when they announced the 2023 threshold, they said that they planned to set it at $5000 for 2024.  But here has been no official announcement yet from the IRS.  Therefore eBay is going along with the current federal laws about the threshold for 1099's.

[nobody*s_perfect]

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@dbfolks166mt wrote: ... EBay may have just decided due to all the uncertainty to issue a 1099-K to any seller that exceeds $600 in total gross sales for the 2023 tax year. 

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IMHO it's extremely unlikely that eBay would issue any 1099-K's for totals that were below the applicable threshold for a seller's location.

[dbfolks166mt]

@dbfolks166mt wrote: ... EBay may have just decided due to all the uncertainty to issue a 1099-K to any seller that exceeds $600 in total gross sales for the 2023 tax year. 

IMHO it's extremely unlikely that eBay would issue any 1099-K's for totals that were below the applicable threshold for a seller's location.

     Probably not but it sure would make their accounting department happy. 

[rusty1234russell]

This isn’t true. There is a threshold to online selling that if you don’t meet you are not required to report it to the IRS as income. It’s the law and legal. Most major e-commerce companies pay as they smash those thresholds. Having said all this there are tons of people who sell on line old household items, clothes, used goods where it’s not considered a business. Those kinds of sellers are not required to report it on taxes. That’s why the thresholds are in place for non business sellers. If eBay sends you a 1099 then you are required by law to report it as income . If they don’t you are not required to report it and there is nothing unethical about it . 

[mam98031]

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@rusty1234russell wrote:

This isn’t true. There is a threshold to online selling that if you don’t meet you are not required to report it to the IRS as income. It’s the law and legal. Most major e-commerce companies pay as they smash those thresholds. Having said all this there are tons of people who sell on line old household items, clothes, used goods where it’s not considered a business. Those kinds of sellers are not required to report it on taxes. That’s why the thresholds are in place for non business sellers. If eBay sends you a 1099 then you are required by law to report it as income . If they don’t you are not required to report it and there is nothing unethical about it . 

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You are confusing the threshold on a FORM with a threshold for reporting income.  The 1099k is a FORM just like the 1099int is a form.  But the 1099int's threshold is $10.00.  Both are FORMS @rusty1234russell 

Myth: If taxpayers didn't receive a Form 1099-K, they don't have to report income.

Fact: According to federal law, all income is taxable unless it is specifically excluded by tax law. Taxpayers should report any profits from selling goods or services, regardless of if they receive a Form 1099-K.

https://www.irs.gov/newsroom/irs-never-mind-the-myths-know-the-facts-about-receiving-a-form-1099-k-i...

[nobody*s_perfect]

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@rusty1234russell wrote:

This isn’t true. There is a threshold to online selling that if you don’t meet you are not required to report it to the IRS as income. It’s the law and legal. Most major e-commerce companies pay as they smash those thresholds. Having said all this there are tons of people who sell on line old household items, clothes, used goods where it’s not considered a business. Those kinds of sellers are not required to report it on taxes. That’s why the thresholds are in place for non business sellers. If eBay sends you a 1099 then you are required by law to report it as income . If they don’t you are not required to report it and there is nothing unethical about it . 

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Wow, you have neatly summarized ALL of the misconceptions about income taxes and 1099-K's all in one paragraph.

Sellers are not required to report their eBay income IF (1) they had no net profit, and (2) also didn't get a 1099-K.  That's the only exemption.