mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@singular-source wrote:is this income actual income? Not at all. They made a transaction that left them with nothing. Man these new rules are screwing normal people that just want to sell an old phone. Talk to an accountant??? How many people just selling an old item can afford an accountant.
If they just sell an old item it is unlikely they will qualify for the 1099K next year, unless that one item was an expensive one.
An accountant is only needed if you don't find you understand some of the help that is out there on this subject. It simply isn't as complicated as some want to make it. Nor is it as scary as others seem to want to make it. @nobody*s_perfect provided some great links to learn from. Yes time will be involved in learning about this new requirement to be sure. But it will be time well spent.
One of the key things to remember will be if you receive a 1099K for your sales in 2022, you WILL need to claim the income on your 2022 Federal tax return, BUT that doesn't mean you have to pay taxes on the additional income. It simply means you need to report it and then through the filling out of the appropriate forms, you will be able to justify not having the income count in your taxation level on the Federal Tax return.
@singular-source wrote:Decent people are going to get screwed by this bill along with the IRS. Terrible idea. $7500 would have been reasonable.
My opinion is most will be just fine. At least those that what they earn legally should not be considered income. They just need to do their homework on how to properly fill out the forms for IRS so they don't pay additional taxes on the money. This is very doable but people will need to do their research.
What will happen is all those people that have been selling for years on the internet that have never qualified for a 1099K before will have to claim their income to the IRS. These people that haven't been paying taxes on income they earned in previous years are certainly concerned and they should be. When Ebay sees this jump in actual income, they may question previous years income reported. This is a legit concern.
I have no idea how real that concern is, only time will tell what the IRS will do. But there are a whole lot of people out there that felt if they didn't get a 1099k then they didn't have to report their income. Which was NEVER true in the first place. We have always been responsible for claiming our actual income on Federal tax returns with or without 1099Ks.
@singular-source wrote:Auditing is hella tough. I imagine the IRS is going to audit less than 1% this year. Hopefully not the people that are just trying to survive. Cause I know a few and they don't deserve it...
Are you sure?!!?!?
@luckythewinner wrote:
@jda03121 wrote:Talk about carrying discussions to an extreme. There is a very good IRS help line that costs nothing.
I really wish the IRS would issue guidance explaining how to account for "yard sale" income that is reported via the 1099-K.
The only guidance they seem to have posted is explaining how to handle businesses income and what to do if you receive a 1099-K that was not correct.
Without any published guidance, I question whether the IRS help line will be much help.
There may be more out there but earlier in the thread @nobody*s_perfect provided a couple of great links.
This is one of them.
https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses
@backhomeoutdoorz wrote:I never said I didn't sell other things. I said mostly clothes. I'm an avid outdoorsman and buy a lot of new hunting gear every couple years and sell my old. Same with golf clubs. All of which I took a loss on compared to the price new. The problem is coming up with receipts to verify such. All of you people just want to assume people are selling for profit on ebay when there are many that just want to get some return on an item they no longer want or use.
That is simply not true. There are lots of fantastic sellers on Ebay and other sites that are just selling stuff they pull out of their closets. You are ASSUMING that IRS is trying to force you to pay income taxes on those sales and that some here support such an action. NONE of which is true.
You will, starting next year, have to claim the income on your tax forms IF you exceed $600 in sales, but that DOES NOT mean you will have to pay income taxes on that money. You will however have to take the time to learn the rules guiding this, that is true. And the internet is a great place to locate some great info actually published by the IRS or another trusted source. Or if you prefer to spend money instead of your time, you can turn it over to a qualified Tax Accountant that is familiar with internet sales. But that is a choice for each of us to make on our own as to what is best for each of us.
@powell-memorabilia wrote:We’ll, shoot - you might be right. I do see contradictory statements out there from tax professionals, but what I see from the IRS supports your position. they don’t really address sales of personal used goods like clothing, though.
Why would they need to call out specifically clothing? Used good that you owned yourself can go far beyond clothing. It is unlikely they could possibly list all the different types of things you might be selling from your own personal space.
Keep in mind that the moment you buy a used item and sell it or accept stuff from others to sell for them or just for you to sell, all this stuff would be taxable income and would NOT fall under sales for items YOU previously owned.
