1099

[techanalyst1]

My sister made well under $20000 between two accounts. Ebay sent her 1099's for both. Chat person said it's because she had over $600 in sales. When she said that starts this year, he said since she's been helped he is signing off.

Anyone else have a 1099 for under $20000?

[obtanium_enterprises]

"...she was going to report the income when filing taxes..."

The irony is, how the OP wrote, "She sold stuff she cleaned out of her house that she was going to toss before she moved to a smaller place"  because liquidating assets at a loss that you acquired with money you paid income tax on isn't actually gainful (unless you're a tax authority, or you reference it to what you relatively-lost by just tossing the stuff.)  She could document any and all associated selling/operating expenses and deduct them from her gross "profit" reported on the 1099. Or, if she wants to do a little more accounting, she could write up a spreadsheet beginning with (actual or estimated) acquisition cost of the stuff, add back any depreciation she may have claimed on previous tax returns, deduct selling/operating costs, and calculate net "profit" (i.e. loss) and report that figure. Nothing personal, just business.

[mam98031]

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@ustabee1 wrote:

I'm confused. 

1099 or not, she was going to report the income when filing taxes, right?

So why is this a 'problem'

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Everyone should.  Whatever the threshold on the FORM called a 1099K is NOT the minimum threshold for claiming your income to the IRS.  It is merely a threshold for a FORM, NOTHING more.

We are all responsible to report our income to IRS on our Federal tax returns, no matter how much it is.  IRS has NO MINIMUM threshold on reporting income.  Many years ago they did, but the did away with that rule years ago, so now there is no minimum.  So whether you sell $200 worth ANYWHERE or $19,999 anywhere, you are responsible to report your income to IRS even without a 1099K.

One thing people tend to forget is a 1099K is ONLY a form.  It does NOT set the rules for all income.  1099Ks are ONLY for internet sales.  There are many other ways to sell stuff than on the internet.  That income too is taxable and is NEVER represented on a 1099K

[mam98031]

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@fab_finds4u wrote:

Add Missouri  w/ $1200 reporting threshold 

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See the list in Post 20.  It has all the states involved stated.

[mam98031]

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@chris90242 wrote:

I'm in California, sold my part of  my music collection, $647 gross sales in 2021, and I just got a 1099-k. Is this a glitch or what?

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@chris90242 

See Post # 20.  Are you in any of those states??

[mam98031]

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@b86fiero wrote:

She might not need the 1099 for federal tax return but does she need it for filing a State Income Tax return?

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What you claim as income with your state should perfectly match whatever you claim with IRS.  They do share information, so if you aren't doing that, you could cause yourself some unnecessary problems.

[mam98031]

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@obtanium_enterprises wrote:

"...she was going to report the income when filing taxes..."

The irony is, how the OP wrote, "She sold stuff she cleaned out of her house that she was going to toss before she moved to a smaller place"  because liquidating assets at a loss that you acquired with money you paid income tax on isn't actually gainful (unless you're a tax authority, or you reference it to what you relatively-lost by just tossing the stuff.)  She could document any and all associated selling/operating expenses and deduct them from her gross "profit" reported on the 1099. Or, if she wants to do a little more accounting, she could write up a spreadsheet beginning with (actual or estimated) acquisition cost of the stuff, add back any depreciation she may have claimed on previous tax returns, deduct selling/operating costs, and calculate net "profit" (i.e. loss) and report that figure. Nothing personal, just business.

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First, for ALL sellers that are ONLY selling stuff so they can downsize their personal stuff, it is highly likely that the sales from these items is NOT TAXABLE.  But if you get a 1099K, you SHOULD report it on your Federal Tax reports.  Fill out all the paperwork and answer all the questions.  IRS is NOT looking to tax sellers just trying to sell off clothes and the such.

Now for those selling off their own collectables, that can be different as many have gained value over the years.  So there would be Capital Gains on those.

Don't make assumptions.  Go out and READ the rules.  There are places on the internet where you can find them written in plain English.

Also keep in mind you can NOT claim a loss from the sale of your own garage sale kind of stuff.

[buyologist-3]

(Smiles!) I was getting annoyed at these posts, too, and you what I did? I stopped reading them!!  Pass 'em by...  It's so easy.

[firesteel_surplus]

Well said @fern*wood !

I've said it doesn't matter if that stupid 1099k is at $1 or $100,000. It is just a number on a form. How the receiver wants to deal with it is up to them.

And @buyologist-3 , even though the 1099k topic comes up on a regular schedule, I read them just cuz I find them so enjoyable. People getting their underwear all tied in knots over nothing.

Mike

Firesteel Surplus

[wildpitchsports]

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@jda03121 wrote:

Unless she has been dodging taxes, what difference does it really make?

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These kind of replies are not necessary and provide or answer NOTHING.

[wildpitchsports]

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@ustabee1 wrote:

I'm confused. 

1099 or not, she was going to report the income when filing taxes, right?

So why is this a 'problem'

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The value of these types of comments provide nothing and answer nothing than give the poster some practice trolling. Try this on reddit.

[theteamsetguy]

Never been on Reddit. Enlighten us including myself who have never been Reddit.

[shipscript]

@techanalyst1 

California:

https://www.ftb.ca.gov/file/personal/income-types/information-returns-1099.html

Tax year 2021 is the first year for a California mandated 1099-K for payments over $600, but it seems to be directed toward Uber drivers.

1099-K: Payment Card and Third Party Network Transactions

As of January 1, 2021, you may receive a 1099-K if you receive annual gross payments of $600 or more in settlement of third-party payment network transactions and are an app-based driver, regardless of the number of transactions.

For returns for calendar years beginning in 2022, you may receive a 1099-K if you received payments:

• From payment card transactions (e.g., debit, credit, or stored-value cards)
• In settlement of third-party payment network transactions above the minimum reporting threshold of $600 in annual gross payments.

How to report

Federal return

Report the amount indicated on the form as income when you file your federal return.

California return

This income will be included in your federal adjusted gross income, which you report to California.

[nocoolnamejane]

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@wildpitchsports wrote:

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@ustabee1 wrote:

I'm confused. 

1099 or not, she was going to report the income when filing taxes, right?

So why is this a 'problem'

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The value of these types of comments provide nothing and answer nothing than give the poster some practice trolling. Try this on reddit.

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Why not? Since apparently a lot of people are under the impression that the threshold for receiving a 1099 and for reporting are the same, feels very pertinent to point it out IMHO.

[asset_liquidators]

Doesn't really matter that she got 1099's since she was already reporting her income from ebay sales on her taxes anyway.... right?

Just because someone didn't get a 1099 that doesn't mean that money was "tax free" income.

[19d10recon]

The rule of thumb is if you live in a Democratic State  if you make 1 sale plan on paying taxes.