1099 under $20,000

[sschaffnit-us]

I received a 1099k and not a business or have sales over $20,000 for 2021

[klhmdg]

You will need to include this on your taxes.

Dont have to be a "business" to report income. 

All income needs to be reported on your taxes. $20,000 or $1

Talk to an accountant for your taxes.

[heckofagame]

Correct me if I'm wrong, but I believe that Missouri has a $1200 reporting requirement. Many states have their own income reporting requirements. 

[monica-sells]

You need to check your home state. A few states have low "thresholds" for sending the 1099-K

If it's too hard for you to look up.....what state do you reside in (for ebay purposes)

I will look it up for you

[dryophelia]

@sschaffnit-us 

Missouri was one of the states that had lowered the threshold for issuing a 2021 1099K. 

If this is your first time claiming your online sales, you should consult a tax professional.

[albertabrightalberta]

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@sschaffnit-us wrote:

I received a 1099k and not a business or have sales over $20,000 for 2021

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Are you implying that prior to this year, you hadn't been reporting your ebay sales? Nothing has changed with regard to reporting; just the threshhold for receiving a 1099k has changed. 

[maxine*j]

Business or not, you have to declare your income on your tax returns, no matter the amount. 

Now, if you were a business, you'd have costs and expenses that would reduce that gross income from your sales to lower net for tax liability.   Since you claim not to be a business, your net income from your sales may well be greater, along with your tax liability and, perhaps, even your tax rate.  Better talk to a tax professional about this, and pronto.

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[caldreamer]

1099 is sent to you and the IRS.   You must report amount shown on 1099.    If you file as "hobby seller" you are forced to pay taxes on entire amount.    If you file as "business seller" you can claim expenses (EBAY fees, mileage, cost of goods, packing materials, etc).

You need to consult with tax specialist and they will explain all the record keeping required to run a business.

[sschaffnit-us]

Hi, I did contact a tax professional...they state that since eBay issued a 1099k I will need to file a business tax return at about $350. We are seniors who don't even make enough income to file taxes and the items being sold are below cost and scrap gold and silver costs to help pay medical bills. eBay statements claimed that no 1099k would be issued below $20k for 2021 and begin in 2022.  I am considering closing my eBay account because there isn't any "profits" to pay for shipping, packaging  PLUS a business tax return, regardless if I can document any deductions. House cleaning shouldn't be taxed for seniors because the politicians can't seem to get the billionaires to pay taxes.

Appreciate your reply, S

[sschaffnit-us]

We are seniors on fixed income and don't make enough to pay taxes any more....$350+ for a business tax return, regardless of any deductions, is not viable when we don't make any "profits" on the items sacrificed to pay medical bills. Plus eBay claims the lower limit will be implemented in 2022...then sent us a 1099k for 2021?

[sschaffnit-us]

We are seniors on fixed income and not enough to be required to file a tax return....seems like the politicians can't get the billionaires to pay taxes so they are milking the elderly?

[sschaffnit-us]

We are seniors who don't make enough to even file taxes and selling at a loss...the business tax return will cost too much regardless of deductions....

[monica-sells]

@sschaffnit-us 

i suggest a different "tax professional"

that is absurd .....$350 to file because you get a 1099-K?

I am a senior....I don't have to file, but I do to report my sales....59.00 tax accounting software...

Did you not have to file to get your stimulus monies?

side note: I have not had any additional "taxes" to pay after deductions and expenses....

[nobody*s_perfect]

The person who told you that you needed to file as a business and pay $350 to file does not have your best interests in mind.  The linked IRS pages below explain that IRS considers you to be a hobby, not a business, so you can just file a basic 1040 and enter the amount from your 1099-K on line 8 of Schedule 1.  Then the Standard Deduction ($25,100 for joint filers) will leave you with no tax liability.   

Defining business vs hobby:  https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses

Paying taxes if you're a hobby: https://www.irs.gov/newsroom/heres-what-taxpayers-need-to-know-about-paying-taxes-on-their-hobby-act...

[farmalljr]

The IRS doesn't care WHO you are or WHAT your situation is. Reporting income is REQUIRED. End of argument.

That does not mean it is TAXABLE, though it may be. Either way there is no where that allows you to ignore 1099's without possible consequences. If you got a 1099, it was also reported to the IRS. 

Do whatever you think is best for you, be it the right thing or the wrong thing.