1099K Limit

[cwilk]

I know this subject had been done to death. But the 600 dollar  limit for 1099s  that will go into effect next year is getting close.  I am a hobbyist.  I don't make a profit on most of my transactions.  I also don't want my hobby to complicate my already complicated income taxes.  I also don't want to pay for tax preparation because I'll need to file schedules to write off expenses related to something I'm doing for fun. Finally,   has anybody thought that 600 dollars is less than 12 dollars a week in sales.  12 dollars a week in sales isn't a business.  It isnt even a lemonade stand!  I'm looking for informed opinion.  Is the 600 dollar limit going to be law in 2025 or will there be another delay, or a more reassonible limit put in place?  This has been going round and round since I began Ebaying in 1999.  This is the closest its come to actually being implemented.  Fwiw.  I'm almost at 5k in sales for this year.  I reckon I'll stop trading until next year soon.  Finally.  It's laughable that me opening a box of baseball cards, finding a card I already have, and selling it at a huge loss  triggers a report to the IRS.

[slippinjimmy]

Nobody can give you an "informed opinion" and the $600 limit is currently in place for the tax year 2024.

There is only speculation on the concept of a plan to continue the $20,000 cap, in previous years the notification did not come until December.

If your tax situation is currently "complicated" filling out one easy schedule and one extra line on a 1040 really isn't that difficult. You do not need to pay for tax preparation, Schedule C is pretty straightforward and you would have to do 90% of the work to give to any third party for them to complete it.

[buyselljack2016]

dup thread

1099K zLimit - The eBay Community

[cwilk]

Yeah.  I'm resolved to that.  I just don't like it.  I've been doing this since 1999 and I've never received a 1099.  I believe the limit in 2024 is 5k, and it decreases to 600 in 2025.   For a few years I meticulously tracked my Ebay activity.  I never had a profitable year.  I'm just a collector, and I do own some nice stuff.  And until they start taxing unrealized capital gains, I'm okay.  Or until they remove cash, from the economy.  

[tobaccocardyahoo]

The reporting requirement is your government deciding what is best for it.

You might not think that $600 is a big deal but your government wants taxes on that money so it can spend them on what it thinks is more important than anything you want to buy.

[cwilk]

I agree with you completely.  There is a fair number.  Probably around 10k or 20k. I am legally blind.  I'm old.  I have cancer.  I'm in a mode where I'm selling some of my stuff that nobody in my family wants when i go.  ZDie, that is.  It gives me anxiety to think the things I've collected over the years could end up in a landfill.  I pay my fair share to the department of internal revenue, but it's none of their  business what I do with my stuff at this point in my life.  Do I complain when they leave 100,000 brand mew Mp4s in a country that is now hostile toward us?  Way off topic now.  I'll probably end up just reporting it as extra income and paying the 15%.  Or whatever tax bracket I fall into next year.

[laperlalady]

So very sorry to hear of your health issues. 

It is admirable you are trying to sell your collections that you know family does not want.   Many families struggle with unwanted personal belongings and have no idea how to disperse/dispose them. 

Our family will keep you in our prayers and thoughts. 

[chapeau-noir]

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@cwilk wrote:

I agree with you completely.  There is a fair number.  Probably around 10k or 20k. I am legally blind.  I'm old.  I have cancer.  I'm in a mode where I'm selling some of my stuff that nobody in my family wants when i go.  ZDie, that is.  It gives me anxiety to think the things I've collected over the years could end up in a landfill.  I pay my fair share to the department of internal revenue, but it's none of their  business what I do with my stuff at this point in my life.  Do I complain when they leave 100,000 brand mew Mp4s in a country that is now hostile toward us?  Way off topic now.  I'll probably end up just reporting it as extra income and paying the 15%.  Or whatever tax bracket I fall into next year.

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You don't need to be hit with the tax bill - if you made no profit, you pay no taxes on it. As I said on the other thread, I think this isn't as difficult as you may think, and you'd be paying out money to the IRS that you don't need to if you take that road. If it was me I'd be thinking I've paid enough already and am not some dayum billionaire that can get off scot free and no way. You can get free tax help in filing as a senior, also, if your health isn't up to this (you didn't mention that in your other post).

[stephenmorgan]

Take a look at IRS Form 8949.  It is not a big deal to fill out.  A tax program will send the details to other forms that require the information.

About Form 8949, Sales and other Dispositions of Capital Assets | Internal Revenue Service (irs.gov)

[dbfolks166mt]

I agree with you completely.  There is a fair number.  Probably around 10k or 20k. I am legally blind.  I'm old.  I have cancer.  I'm in a mode where I'm selling some of my stuff that nobody in my family wants when i go.  ZDie, that is.  It gives me anxiety to think the things I've collected over the years could end up in a landfill.  I pay my fair share to the department of internal revenue, but it's none of their  business what I do with my stuff at this point in my life.  Do I complain when they leave 100,000 brand mew Mp4s in a country that is now hostile toward us?  Way off topic now.  I'll probably end up just reporting it as extra income and paying the 15%.  Or whatever tax bracket I fall into next year.

     It could potentially be considerably more than 15% depending on how you file. You have both Federal and State income tax, if you live in a state with state income tax, as well as SE tax which is currently 15.3% (12.4% for Social Security and 2.9% for Medicare). My tax liability averages round 35% of my net income. 

     Of course if you have no net income you have no taxes. If you operate your business at a loss that loss can offset other tax liabilities but there are limits on how long you can do this. 

[mam98031]

@cwilk 

I think you would likely be hard pressed to convince an IRS auditor that you are a hobby seller.  You've sold almost 3,000 items since you started selling.  

For some reason people think that labeling themselves a hobby seller saves them something.  I can likely do just the opposite as you would still need to claim the sales here, but you would not be able to take any deductions.  It is a bit more complicated than that, so you may want to seek the advice of a CPA that is knowledgeable about internet sales.  Not all are.

None of us knows what the minimum threshold on the 1099K will be this year yet.  The IRS has said they are going to try and get it to be $5,000.  But that is NOT confirmed yet.

It appears you have a misunderstanding that many have.  Seems you may think that if you don't get a 1099K that you don't have to claim your income from selling on the internet on your Federal Tax returns.  That is NOT TRUE.  We are required by law to claim ALL our income to the IRS every single year, with or without a 1099K.

So if you have not been claiming what you have sold here in all the years you have sold on the internet, you might want to talk with a CPA to see what your options are so you stay out of trouble.  I'm not trying to scare you.  

Have you every purchased something to sell on Ebay?  Not something you already had, but something you bought intentionally so you could sell it on Ebay?  If the answer is yes, you ARE running a small business.

[reallynicestamps]

the 600 dollar limit for 1099s

There is no limit.

But if you gross $600 in eBay sales, you will get a form which will help you work out your taxes.

You are required to report all your income from allyour sales, even if you only sell $6.00.

I don't make a profit on most of my transactions.

No profit?

No taxes.

Once you take your deductions from the $600 in gross sales, and see there was no income, you record that and pay $0.00 in tax.

I'm almost at 5k in sales for this year.

Since you make no money, you will pay no taxes.

But you have to prove that you make no money.

Just like proving you made those charitable donations, or have five dependents, or farmed 100 acres for over a year.

An amazing number of sellers who thought they had a lucrative side hustle are learning that they have a cash sucking hobby.

[cwilk]

The number of sales I have is the total since 1999.  25 years.  100 sales per year.  2 sales per week.  I understand the IRS wants a piece of every penny that goes into, or comes out of my pocket.  What I could do with all the profit I ever made on eBay.  Feed a puppy.  Or a kitten.  I am at the end of my life now.  I am disposing of the accumulations of a lifetime to make sure that burden is not left to my family.  That does not make me a small business.  Except in the eyes of the IRS.  As for forced reporting.  The 600 dollar a year amount is ridiculous.  13 dollars in sales week is not a business.  I don't know where they came up with this number.  I will comply.  I will pay taxes on every penny I earn.  And I will probably pay more because writing off expenses against my sales will probably be something a little too complicated for me.  And I'm not going to hire a CPA because I sold $4600 worth of collectibles on Ebay.

[nobody*s_perfect]

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@cwilk wrote: ....  I am disposing of the accumulations of a lifetime ....  That does not make me a small business.  Except in the eyes of the IRS.  As for forced reporting.  The 600 dollar a year amount is ridiculous.  13 dollars in sales week is not a business. ....

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You have to let go of the idea that only businesses owe income tax.  As an individual small seller of your personal possessions, you still owe income tax IF you made a profit. Deducting your expenses isn't as complicated as you think.  

If you can figure out how to sell on eBay, will all of its complicated and inconsistent rules, you can also figure out how to fill out income tax forms.  

The $600 threshold for form 1099-K was apparently set up to make it consistent with the thresholds for other versions of form 1099.

[cwilk]

That is a helpful reply.  Still.  The IRS sets a limit to forced reporting above which they think they can make a little money.  Apparently they think that number is 600 bucks.  They know there are expenses associated with earning that 600, and they know there was a cost of the goods  being sold.   My problem is not with paying taxes.  It's with the forced reporting at such a paltry sum.  My final thought.  I buy a lottery ticket for 10 bucks and win 100 dollars.  I turn it in and get my money.  Do I claim the 90 dollar profit?  No.  Does anybody? No.  Are you supposed to claim it?  Yes.  You must by law  report all gambling winnings.  Every once in a while you hit a good one.  10000 winner.  In the state I live in the forced reporting occurs at 600 times your bet.   Do I claim the 9990?  Yes, I have no choice.   And I gladly pay those taxes.    I'll say it again.  600 dollars is a ridiculous amount.  The IRS should not be informed if I sell 600 dollars worth of anything.  It's not what the IRS was created to do.  Is it what the IRS has become?  Yes.  The IRS is a slimy octopus with a million tentacles grasping for peanuts in a million pockets, from the sucker's they supposedly serve.  My real final thought.  The IRS is going to be buried with these forms.  They're going to need a bigger octopus.