2022 $600 eBay/IRS coercion

[bearmtnbob]

I think it is very courageous of eBay to go after the myriad of grandmothers selling over $600 in annual sales.  Wait until the effects of what eBay is doing hits Wall Street, the 10% drop this week will seem insignificant.

[luckythewinner]

@bearmtnbob wrote:

I think it is very courageous of eBay to go after the myriad of grandmothers selling over $600 in annual sales.  Wait until the effects of what eBay is doing hits Wall Street, the 10% drop this week will seem insignificant.

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First, eBay isn't going after anyone - they are following the law that Congress passed. 

Second, the IRS isn't going after anyone - they are following the law that Congress passed. 

Third, grandmothers in DC, IL, MD, MA, MO, VA, and VT have existing 1099-K thresholds of $600, $1000, or $1200 and the sky has not fallen. 

[slippinjimmy]

If the theoretical grandmother has a ton of other income why shouldn't they have to report ALL income and pay the appropriate taxes?

If the theoretical grandmother is on a low fixed income all they have to do is fill out a couple of lines on their tax return and that's the end of the story because even with $600 or $1000 or likely even more it won't increase their tax burden by a single cent.

Most of the theoretical grandmothers selling on eBay would be able to sell thousands of dollars worth of "stuff" without paying a single penny in extra income tax.

[fashunu4eeuh]

”I think it is very courageous of eBay to go after the myriad of grandmothers selling over $600 in annual sales...”

Wow, you’ve got this wrong. Far from going after sellers, eBay has, for years, lobbied the US and other governments over a number of issues impacting its users.

Lately eBay has used its considerable resources to discourage the lowering of the income reporting threshold. You can read all about it on the eBay Main Street forum.

In addition, past lobbying included efforts against sales tax being charged on internet sales, and it supported lowering of custom charges for Canadian buyers.

So while eBay may get a lot of things wrong, your assertion that it is aiding and abetting this new tax law is not among them.

Below are links to support my facts.

https://www.ebaymainstreet.com/issues/1099-k-federal-tax-reporting

https://www.theglobeandmail.com/news/politics/globe-politics-insider/ebay-lobbying-ottawa-to-reduce-...

https://amp.theguardian.com/technology/2013/apr/22/ebay-internet-sales-tax-bill-amazon

[lightlily_arts]

Actually this bill passed under Biden's administration.  It's the democrats that wanted the money to fund all those social programs, and of course all our new illegal citizens.

[yuzuha]

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@dbfolks166mt wrote:

     This may also backfire on the politicians who believe there are billions of dollars to be had as a result of this change.

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Oh, I'm quite sure there are absolutely billions of dollars to be had in owed taxes just based on the number of people I personally know who have been making thousands of dollars a year doing gig work on the side and are now screaming about how they're being forced to report it.

[downunder-61]

I think it is very courageous of any of the myriad of grandmothers selling over $600 in annual sales to come here and openly admit on a public forum that they haven't reported income since 2017, but hey, that's just me.

[dbfolks166mt]

     I read some of the initial reports and estimates regarding the estimated amount of "gig" work and the possible additional tax revenue that could be generated. The biggest flaw in all those reports was it was strictly based on estimates with no factual backing. What people actually "make" has different meaning depending on who you ask. Most people quickly connect what you make with gross revenue which was what the government based a lot of the estimates. What people actually earn is their profit or ROI and what becomes taxable income. If you read through any corporate financial report you can get a pretty good idea of this or for those that receive W-2's take a look at the difference in the gross income on your W-2 and what the adjusted gross income is on your taxes. 

     In general actual taxable net income, profits or returns are considerably smaller that most people estimate. For conventional grocery stores, gas stations is around 1-2% ROI and for a well established good restaurant it's around 20%. 

     If we take the governments estimates lets say there is 30 billion in new reported gross income as a result of the new 1099 reporting requirements. This would be from those that had NOT been reporting the income before. Lets estimate the average ROI from the additional 30 billion is 10%, and that is probably high, that produces 3 billion in taxable net revenue. Assume most sellers are in the 24% tax bracket which is also probably on the high side that generates additional tax revenue of 720 million. I am not sure, because the budget has not yet been passed, how much of a boost the IRS received in its annual appropriation but if it's over 720 million per year this is a loosing proposition. Politics being politics the general public will never know what the bottom line is as a result of this legislation. 

     Based on a lot of the posts on this forum some sellers are beginning to realize what they are really earning selling on eBay. For some it is apparently quite a shock. 

[coolections]

The good news is thanks to President Trump the standard deduction for single is $12,500 and $ 24,000 married so those on low income can deduct most everything they made without even filing schedule "C" anyway.

[chapeau-noir]

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@coolections wrote:

The good news is thanks to President Trump the standard deduction for single is $12,500 and $ 24,000 married so those on low income can deduct most everything they made without even filing schedule "C" anyway.

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Well, outside of losing itemized deductions, the itemized deduction for hobby expenses was also completely eliminated under the TCJA - so much for grandma selling beanie babies.  So, taxpayers have not been able to deduct any expenses they earn from hobbies (as of 2018) but still have to report and pay tax on any income they earn from the hobby.  Those with expensive hobbies are urged to transform them into businesses.

Weren't people all complaining and crying about how they used to be able to make a little money from hobbies and now have to declare it...or make a business out of it with big scary tax forms?

It's all a shell game, but some people just can't seem to see it.

[coolections]

Still posting incorrect info. Read the other 60 topics on this same discussion, they ALL say you can deduct the cost you paid for the item. If you still do not believe those other 88 replies then go tell those folks the same story.

[chapeau-noir]

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@coolections wrote:

Still posting incorrect info. Read the other 60 topics on this same discussion, they ALL say you can deduct the cost you paid for the item. If you still do not believe those other 88 replies then go tell those folks the same story.

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Oh, just stop!  😂  I've been advising people of just that - again and again and again.

But read the tax code.  SMDH.  Hobbies are now a taxable event. 

[coolections]

If you truly want to help instead of just commenting on my post you can reply to the other 88 people who have been posting you CAN deduct your expense know as it is overall over the boards.   I've read several saying you can but not seen you nullify any of the other comments so my bad if you have.

[reallynicestamps]

I wanna start an  all-girl band called the Theoretical Grandmothers.

We will cover music by the Ronettes, Fanny, the Bangles, Bananarama, tAtU, and the Andrews Sisters.

Now hiring an accordian player.

[soh.maryl]

Do you honestly believe that eBay is the source of the change regarding reporting sales? 

Wall Street probably knows the IRS better than many of us.

[southern*sweet*tea]

**General reply**

https://turbotax.intuit.com/tax-tips/self-employment-taxes/4-tax-tips-for-money-making-hobbies/L89qz...

Hobby income and expenses

Beginning in 2018, the IRS doesn't allow you to deduct hobby expenses from hobby income. you must claim all hobby income and are not permitted to reduce that income by any expenses.

For tax years prior to 2018, you can deduct expenses as an itemized deduction subject to 2% of your adjusted gross income.