1099K

[huntingforit04]

STARTING JANUARY 1, 2022 EBAY WILL SEND A 1099K TO ALL SELLERS THAT MAKE OVER $600 IN THAT YEAR.  I, FOR ONE, WILL NOT BE SELLING ON EBAY AFTER THAT TIME.  I AM A DISABLED SENIOR WHO CANNOT DO MUCH BUT SIT IN FRONT OF A COMPUTER.  EBAY SELLING HAS HELPED ADD A LITTLE EXTRA MONEY TO PAY FOR MEDICATIONS, BUT IF I HAVE TO REPORT IT AS INCOME, THEN I CAN NO LONGER SELL ON EBAY.  I ENJOY THE INTERACTIONS OF THIS HOBBY, BUT WILL NOT CONTINUE TO SELL BECAUSE OF THIS NEW POLICY.  EBAY IS GOING TO LOSE A LOT OF "FEES" WHEN SELLERS DECIDE THAT BETWEEN FEES AND 1099K, IT IS NO LONGER SOMETHING THEY WILL DO.

[eleanor*rigby]

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@dnasilver wrote:

The determination is if it really is income. Just because you get a 1099 does not mean income. The IRS will not be happy either trying to figure out which 1099 is truly real income.

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Might wanna double-check the difference between "income" and "profit." 🙄

@huntingforit04 

You report "income." You pay tax on "profit."

[downunder-61]

This is an interesting read from someone who was not reporting income from eBay, regardless of a 1099K

https://community.ebay.com/t5/Selling/The-IRS-is-charging-me-for-eBay-sales/m-p/32390236#M1864811

[sell-more]

How do you keep receipts on family heirlooms, parents home clean-out,  or presents you received over the years.  Taxes were already paid on most those items when originally purchased. 

[px_455]

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@huntingforit04 wrote:

NEVER EVADED TAXES.  THIS IS A HOBBY, LIKE HAVING A GARAGE SALE.  NO TAXES ARE PAID ON GARAGE SALES.  IF, IN 365 DAYS, YOU CAN'T MAKE MORE THAN $600 ON A GARAGE SALE OR TWO WITHOUT BEING TAXED....THEN I THINK LAND FILLS ARE GOING TO START BEING OVERWHELMED.  I AM RECYCLING AND THEN PUTTING BACK INTO THE ECONOMY WHAT I MAKE WHETHER FOR FOOD OR MEDICATIONS.

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Question

How do you distinguish between a business and a hobby?

Answer

In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is an activity not done for profit. This includes activities done mainly for sport, recreation, or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:

• Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
• Whether you have personal motives in carrying on the activity.
• Whether the time and effort you put into the activity indicate you intend to make it profitable.
• Whether you depend on income from the activity for your livelihood.
• Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
• Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
• Whether you were successful in making a profit in similar activities in the past.
• Whether the activity makes a profit in some years and how much profit it makes.
• Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

You may find more information on this topic in section 1.183-2(b) of the Federal Tax Regulations.

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

[slippinjimmy]

For anyone in a similar situation as the OP, retired, on Social Security, disabled (or not), no huge investment income, no juicy employer pension, no trust fund from daddy.

As one or two people mentioned you can probably sell thousands of Dollars worth of stuff on eBay without incurring a single Dollar in additional income tax.

At this link is a good (not complete) list of deductions and tax credits that are available to people in this type of situation. If you have a spouse you may be able to have even more net income before paying additional income tax.

https://www.arborcompany.com/blog/10-tax-deductions-for-seniors-you-might-not-know-about

@huntingforit04 

[this*old*attic]

@huntingforit04 

It isn’t EBay’s law, and you should have been reporting all along.

That being said, reporting and owing taxes are 2 different things.

The bookkeeping is pretty simple. I shove my buying receipts in a Manila envelope all year long. I print my monthly Ebay info and continue to print PayPal because I pay shipping through there even if I no longer get payments there.

Add all monies received. Add expenses. Subtract the second from the first.

45 minutes, tops.

Gas, mileage, etc are also deductible, but I don’t bother.

[this*old*attic]

@southern*sweet*tea 

LOL. I hear you.

 I qualified for food stamps for about 10 minutes last summer when I was temporarily unemployed.

Note: I am 62.

Along the way, I got a GOVERNMENT NOTICE letting me know that “since everyone in the household is ELDERLY or unemployed” I didn’t have to report income anymore unless it changed.

ELDERLY

😑

[inhawaii]

This thread is a year old.  LOL

[reallynicestamps]

You won't be paying taxes on your eBay income.

You may be paying taxes on your eBay profits.

A lot of  sellers are going to be surprised to learn that their eBay business has been a money -eating hobby for years, when they actually do the math.

It is unlikely that the profit on $600 in sales will move many sellers into a higher tax bracket.

I'm Canadian, so my taxes are different, but I worked out once that the first ~$17,000 a Canadian earns is basically entirely covered by standard deductions.

Then we pay 15% on our income between that

and $49,000, and 20.5% from 49K to $98K.
So if I earned $98K last year I'd owe a total of $14,695 in taxes.

It's my understanding that you guys pay a lot less than that because our universal health care is covered by those taxes.

[chapeau-noir]

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@inhawaii wrote:

This thread is a year old.  LOL

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Cripes - you're right - it had its cake day last month!

ZOMBIE THREAD.

[kh-vince]

Hi everyone,

Due to the age of this thread, it has been closed to further replies. Please feel free to start a new thread if you wish to continue to discuss this topic.

Thank you for understanding.