$5000 limit 2024

[winomore]

I understand the new $5000 limit for 2024. But is there still a bottom line for how many items you sell to go with that?

200 items was the previous number and $20,000. 

Say I sold only one item in 2024 for $6,000, would I receive a 1099K and be required to pay a tax on the profit, which I would do anyway. 

Thanks in advance

[soh.maryl]

The IRS has never specified the number of items being sold to go along with any limits. 

[dbfolks166mt]

The IRS may not have the power to set a rate above $600.

There are cases at the Supreme Court whose decision may limit the ability of federal agencies to do anything that Congress did not grant the the right to do.

I suspect they will not decide what to do until after the court rules.

     You would be somewhat correct but there is really nothing for the court to rule on unless the Federal government attempts to change the threshold without passing a modification to the current law which has the limit at $600. In essence the IRS is in violation of the current laws that require them to enforce the codified $600 reporting/issuance threshold. 

[dbfolks166mt]

The IRS has never specified the number of items being sold to go along with any limits. 

     You are quasi correct while the law does not specify "items" it does specify transactions which generally closely relates to items sold. Under the old/current threshold limit at the Federal level it was a two piece puzzle. So with the latest delay,  on whatever the new limit becomes,  for 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions. 

     Of course there are a number of individual state laws, and probably more to come, that have already established and codified lower $ issuance thresholds and in some cases minimal number of transactions as well.

[dbfolks166mt]

The delay will probably be another delay year . LOL

Here we are just talking about 1099K with eBay....the reason for delays is it has to be for platforms as well for Etsy, Stub Hub, Pay Pal (which is NOT eBay), Square, Cash App, Postmark, Doordash, Uber, Lift and so on.

That all ain't happening over night. LOL

      At the Federal level another delay in 2024 would not surprise me a bit given the lethargic pace at which the Federal government is moving these days. For that reason it would not surprise me to see a number of additional states pass their own 1099 issuance thresholds. This could potentially catch some sellers off guard, at least those that attempt to dodge the 1099, just as it did for some sellers in Virginia when they changed the 1099 issuance limit to $600 in 2020. The Virginia law was not passed until July of 2020 but it made the law retroactive from 1 January 2020 so a number of sellers had already eclipsed the threshold prior to the law being passed.

     The delay is not so much because the "platforms" do not already have the ability to handle the processing in place. It has been there for years just as the software for other tax forms like 1099-INT, W-2's, SSA-1099........  What may be making it difficult at the moment is there is NO standardization for the 1099-K and the platforms are having to tweak their software to handle not only the Federal level but the individual state levels as well. The delay has more to do with politics than anything. EBay's interest in the issue is their bottom line and nothing more. As sellers attempt to avoid the 1099 that represents potential lost revenue to eBay. EBay has little interest in the IRS workload or in sellers tax liabilities their ONLY focus is how this is potentially impacting their bottom line. 

[simba6]

Not receiving that or any tax form does not excuse you from any taxes you may owe.

[b86fiero]

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@winomore wrote:

I understand the new $5000 limit for 2024. But is there still a bottom line for how many items you sell to go with that?

200 items was the previous number and $20,000. 

Say I sold only one item in 2024 for $6,000, would I receive a 1099K and be required to pay a tax on the profit, which I would do anyway. 

Thanks in advance

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"tax on the profit" - "which I would do anyway"

It appears the OP is aware they are required to pay the tax on the profit.  It appears they are also aware they can deduct expenses to reach the profit amount for which taxes are due.

That leaves the questions of at what dollar amount will the 1099K be generated and if there is a certain number of sales that must accompany the dollar amount to trigger the 1099K.

Thank you to the several posters who have answered those questions based on what IRS info is currently available.

[mam98031]

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@soh.maryl wrote:

The IRS has never specified the number of items being sold to go along with any limits. 

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That isn't accurate.  The old rule was $20,000 and 200 transactions to receive a 1099K.

"This means that for 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions. For tax year 2024, the IRS plans for a threshold of $5,000 to phase in reporting requirements."

https://www.irs.gov/newsroom/irs-announces-2023-form-1099-k-reporting-threshold-delay-for-third-part....

[armysergeant]

Yes, because you exceeded the $5k limit even by selling only one item.  The other scenario is that you have $4k in sales and 205 items sold then you will receive the 1099 as well. 

[mam98031]

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@armysergeant wrote:

Yes, because you exceeded the $5k limit even by selling only one item.  The other scenario is that you have $4k in sales and 205 items sold then you will receive the 1099 as well. 

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What?  We are only 10 days into 2024.  We don't know what the IRS threshold on the 1099K [there are several different types of 1099 forms] yet.  IRS is CONSIDERING 5K for 2024 [not 2023]  and it will likely NOT have a transaction number as part of the threshold.

@armysergeant 

[madhousewife]

Thanks. That's actually helpful and supportive to those of us who are very flustered by this topic.

[savwillsell09]

well said!!

[intel_outside]

The previous limit was $20,000 and 200 items and yes, it did excuse sellers from any taxes they may owe.

[kensgiftshop]

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@intel_outside wrote:

The previous limit was $20,000 and 200 items and yes, it did excuse sellers from any taxes they may owe.

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How do you figure that?

[tremely2]

Not necessarily.  If you only use ebay as an online yard sale for stuff you already own, you do not owe tax on those sales.  In that case, the loser threshold just creates more paperwork when you file your taxes.

[dbfolks166mt]

     As others have noted there is NO $5,000 limit for 2024 nor is there an item limit. It is under discussion but will require Congress to pass a law to change the current one. Regardless of what the Fed does or does not do it does not effect state laws that are current on the books or any new ones that individual states may pass. 

     NOBODY will know for sure until probably December of 2024.