1099k

[donnav2323]

So under the new policy for 1099k  for 2022 we will have show a business venture and pay taxes for any amount over $600 per year total thru paypal  instead of the existing $20,000.  Is this correct 

[releasethekraken_1]

No. If you sell over $600, you will receive a 1099k. But regardless of how much you sell, you need to report the income, same as always. You can deduct your expenses on Schedule C.

[stainlessenginecovers]

Paying taxes for making extra money is NOT a Business Venture and the IRS doesn't care if you're a business, a hobbyist or the Queen of Paper Plates; they just want you to pay taxes on profits earned outside of a typical W2 from a regular job.  

[caldreamer]

EBAY is required to send 1099 if you earn over $600.   No money goes into your PayPal account anymore (so you won't get 1099 from PayPal).

What most people don't understand is....you are supposed to report all income to IRS (every dollar earned) even if it is UNDER $600 and also to your State Tax Board.   For every sale you make EBAY sends "sales tax" to your state under your social security#.   If don't report income this could trigger an audit.

[eleanor*rigby]

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@donnav2323 wrote:

So under the new policy for 1099k  for 2022 we will have show a business venture and pay taxes for any amount over $600 per year total thru paypal  instead of the existing $20,000.  Is this correct 

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@donnav2323 

Please note this law takes effect for the tax year 2022, which will be accounted for on your 2023 tax filing. The new threshold will not affect this tax year's filing for 2021 that we'll submit a few months from now (in 2022).

I can't see any sold listings on the account with which you've posted, but haven't you been transitioned into eBay's Managed Payments program? If so, your 1099-K will be issued by eBay (as the payment processor), not PayPal.

If a seller was transitioned mid-year and reached the threshold for issuance of a 1099-K while using both PayPal and Managed Payments, that seller will receive a 1099-K from both entities.

eBay's 1099-K will be available online. Here's a good help page to read and bookmark:

Form 1099-K 

[dbfolks166mt]

     As others have stated  regardless of whether you receive the 1099 or not you should be paying taxes on net income, the 1099 you receive will show net cash flows through the third party financial processor which does not represent, or should not represent, what you pay taxes on. 

     As for when you will get one it depends on what state you live in. While the federal law takes effect in 2022 a lot of states have passed their own laws that require the issuance of 1099's at different threshold levels and dollar amounts. For Virginia that law went into effect in 2020 and I received 1099's from PayPal, Venmo and a couple of other third party financial processors. You may want to check the laws of the state in which you live. If you have been paying taxes all along this is nothing more than another piece of paper but it does help balance the numbers. 

[dnasilver]

be careful with what you deduct. The previous administration removed most of the deductions allowed for hobbyist or part time sellers. If you are set up as a legal entity then you get few deductions.

[mikitch]

can you wait until the end of the year to pay any tax on the 1099 or do you have to pay some quartley??usuallyi do my taxes when i rec the 1099 if over $20000.

[coastaltechsolution]

Yes you will have to pay as usual whether you got a 1099K before or not

If you did not report you're income before because you believed you fell under the radar then well, now you can believe the new funded IRS will be auditing  

[iart]

It is best to consult an accountant.

But... we pay quarterly. If we don't we get fined.

But you only have to estimate. Not exact. Tho you should probably try to pay a little more than what is going to be owed (if you overpay, you do get it back).

Basically, we take about what we owed the previous year and divide it by 4. Then add a little.

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@mikitch wrote:

can you wait until the end of the year to pay any tax on the 1099 or do you have to pay some quartley??usuallyi do my taxes when i rec the 1099 if over $20000.

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[luckythewinner]

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@donnav2323 wrote:

So under the new policy for 1099k  for 2022 we will have show a business venture and pay taxes for any amount over $600 per year total thru paypal  instead of the existing $20,000.  Is this correct 

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Not correct.

There was never a $20,000 limit for paying taxes.

You were supposed to report all income, whether or not you got a 1099K. 

The $20,000 limit

[sell-more]

unless that state is NEW HAMPSHIRE 🙂

[carloscycle]

The heck w selling anything on Ebay. If sales of junk I'm trying to get rid of (some bought on ebay but have no record of what I paid) gets reported to IRS I quit selling anything on Ebay. Just cancelled about 170 listings.

[jda11121]

Same laws apply elsewhere. Maybe you can dodge your taxes on Craiglist or garage sales.

[7606dennis]

I believe that if you're selling on eBay in an attempt to produce income you are engaged in a business venture.  The limits set on the amount at which financial institutions are required to issue a 1099 is merely something that helps the IRS to see who is receiving that amount of income and help them determine who isn't reporting their income accurately.  The lowering of the minimum amount that triggers this form being issued merely reflects the reality of how many people were not able to be trusted to report their income accurately under the honor system.

I advise consulting your tax professional.