eBay

cwilk · ‎09-30-2024

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.

cwilk · ‎10-01-2024

So would you report the $90 on your 1040?

nobody*s_perfect · ‎10-01-2024

Yes I would but as noted above it's easy to offset it with losses.

mam98031 · ‎10-01-2024

@nobody*s_perfect wrote:
Yes I would but as noted above it's easy to offset it with losses.

Not to mention that it, even without deductions, would likely have no significant impact to taxes owed. But it does keep you within compliance with the IRS rules.

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

mam98031 · ‎10-01-2024

@cwilk wrote:
So would you report the $90 on your 1040?

Not all income has some IRS form to back it up. Forms are just that Forms. Nothing more than Forms.

IRS does not state you have to report all your income that you receive forms for. It says we are to report all our income.

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

cwilk · ‎10-01-2024

In my 59 years on this planet you are the only person I have ever encountered who would answer that question that way. They say that nobody's perfect. I don't know about that anymore. Good luck to you!

winterpalace25 · ‎10-01-2024

Yes. I have been a micro-seller on eBay and Amazon for decades and have accurately filled out a Schedule C each and every year, no matter the profit.

winterpalace25 · ‎10-01-2024

I do feel for you, Cwilk. I don't think you need a CPA in order to report your income, expenses, and cost of goods. You do need receipts for your business expenses, but the IRS is pretty good about accepting good faith estimates of personal cost of goods.

All the online programs are good at walking you through a Schedule C. And some of them are free. Best of luck to you.

nobody*s_perfect · ‎10-01-2024

@cwilk wrote:
In my 59 years on this planet you are the only person I have ever encountered who would answer that question that way. They say that nobody's perfect. I don't know about that anymore. Good luck to you!

I've been audited by the IRS 4 times and walked away smiling every time. It's one of the most fun blood sports around. Preparation is key! Receipts! Details! Beat them at their own game!

I will always treasure the memory of the look on the agent's face when I produced a shoebox full of checks all sorted and paper-clipped to itemized lists of expenses. He promptly decided he had better ways to spend his afternoon and sent me on my way. I suspect that the odds of being audited are lower for those of us who demonstrate extreeeme accuracy like reporting trivial lottery wins; I haven't been audited since 1983, as if the IRS agents are leaving hobo marks that say "don't bother here".

dbfolks166mt · ‎10-01-2024

@monroe67 wrote: ... The theory that when more people receive 1099Ks, more people will report their income on their tax return forms,
And more income tax money will flow into the United States Treasury.

The feds apparently noticed the results in states that independently lowered the threshold. Vermont and Massachusetts set theirs at $600 back in 2018.

Probably not so much about noticing the state changes and revenue but about how they were going to pay for all the budget adds to the IRS along with all the stimulus funding that was part of the American Rescue Plan that was passed in 2021.

Nobody had any clue how much additional revenue, if any, the change would result in. It was simply a SWAG.

dbfolks166mt · ‎10-01-2024

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.

I am not sure where they came up with the $600 maybe they just pulled the number out of a hat. You do realize of course that the threshold for the 1099-INT is only $10.

cwilk · ‎10-01-2024

Thanks for the encouragement. This thread has gotten completely out of control and I can't really follow it anymore. It's what having had a brain injury leaves you with. There was a time, a long time ago, that I was a part time tax preparer. I vaguely remember filling out schedule Cs for some small business clients. I also know how much tax law changed from year to year back then. And I haven't prepared anything other than a short form return in at least 10 years. I can only imagine what has changed in all those years. I also feel like I have to really watch what I say in here, because of some of the highly unusual responses I've received. I'd like to delete this thread and be done with it. I have gotten the chance to read up on how the new 1099k threshold law squeaked through congress, though. I did not realize that it required VP Harris to break a tie in the Senate. It was part of President Bidens recovery plan legislation.

dbfolks166mt · ‎10-01-2024

I just read. The House Ways and Means committee moved a bill through committee last month, September 2024, that would return to the 20K threshold, limit, level, whatever word satisfies you, for issuing a 1099K. If it will pass in the full House, or the Senate, or if the President will sign it is anybodies guess.

It may pass through the full house in which the Republicans hold a slight majority but it will probably never make it through the Senate nor will the President sign it. The original legislation that lowered the threshold was part of the Democratic American Rescue Plan Act of 2021.

Toss an election into the middle of that mess and odds are this will go nowhere in 2024 and may not go to the floor of either the House or the Senate until after the election and the new members of Congress are in place and we have a new President whomever that may be.

fern*wood · ‎10-01-2024

You sound like you can follow this thread just fine, but would rather not hear the plain truth. Since you are computer literate and sell online I’m sure you would probably have no trouble using an online tax filing program and many are free or very cheap. They take you through reporting eBay sales along with everything else.

dbfolks166mt · ‎10-01-2024

The reporting threshold for this year is $5,000, next year its supposed to be back to $600 again. You can thank the democrats for this monstrosity of a $600 threshold. The dems are just attacking poor people selling old items around their homes, its pathetic.

The threshold for the 2024 tax year has NOT been set yet. The $5,000 is a proposal at the Federal Level. Depending on which state you live in it may already be at a lower level. I am in Virginia and it has been $600 since the 2021 tax year.

You are correct about where the blame resides for the $600 threshold.

Ukraine gets $60 billion, the poorest of Americans get threatened by the IRS because they sold old baby clothes, that they dont owe any taxes on to begin with.

stephenmorgan · ‎10-01-2024

@cwilk wrote:
I just read. The House Ways and Means committee moved a bill through committee last month, September 2024, that would return to the 20K threshold, limit, level, whatever word satisfies you, for issuing a 1099K. If it will pass in the full House, or the Senate, or if the President will sign it is anybodies guess.

There have been many bills that have been created but they never go anywhere. The fact these bills are being created shows you that your Representatives in Congress are hearing the complaints. The fact that nothing has been done is an indication of what the majority support. I think the only way some form of adjustment would be made to current law is if it is slipped into a bill unnoticed like was done when the current law was passed.

Check out this bill from 11/03/2023. Not a single co-sponsor.