mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@intel_outside wrote:The previous limit was $20,000 and 200 items and yes, it did excuse sellers from any taxes they may owe.
How did it do that????
If you actually believe this and if you have done this, you really should seek the advice of a Tax Professional as you likely have created a problem for yourself with IRS, so try to head it off before they find it. It will likely be a lot less expensive for you.
@tremely2 wrote: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.
That is NOT necessarily true. You should read up on the requirements and exceptions.
https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-10...
https://www.irs.gov/faqs/small-business-self-employed-other-business/income-expenses/income-expenses
https://www.irs.gov/businesses/gig-economy-tax-center
https://pages.ebay.com/seller-center/service-and-payments/2022-changes-to-ebay-and-your-1099-k.html
https://www.irs.gov/pub/taxpros/fs-2022-41.pdf
@kensgiftshop wrote:
@mam98031 wrote:
@intel_outside wrote:The previous limit was $20,000 and 200 items and yes, it did excuse sellers from any taxes they may owe.
How did it do that????
If you actually believe this and if you have done this, you really should seek the advice of a Tax Professional as you likely have created a problem for yourself with IRS, so try to head it off before they find it. It will likely be a lot less expensive for you.
It's amazing how many sellers think like that.
I know, it is down right scary. I've had conversations with a couple of sellers a few years back before they started messing with the thresholds on the form. And those sellers told me they would stop selling after they reached about $19,000 so they wouldn't have to pay taxes on the income.
And why anyone would thing the threshold on a FORM somehow sets the threshold for EVERYONE's income to be reported to the IRS boggles my mind too. What about those that get a W2, is their income not reportable to the IRS if they earn less than the threshold on the 1099K? What about the income earned on the other dozen types of 1099 forms. And so on.
Somehow this 1099K carries the highest priority when it comes to reportable income.
I'm with you and I simply do not understand why some believe this or something similar.
The fact is IRS has no minimum requirement on reporting income. However Self Employment taxes do not have to be claimed on income below $400.
With dozens of states being involved, wouldn't it be simplest for the venues to issue the forms for anyone passing the LOWEST gross sales level?
Because, after all, everyone is declaring their income, right?
Why do you think they lowered the threshold??
@reallynicestamps wrote:
With dozens of states being involved, wouldn't it be simplest for the venues to issue the forms for anyone passing the LOWEST gross sales level?
Because, after all, everyone is declaring their income, right?😎
"Dozens of states" are NOT involved. It is about a single Dozen.
https://stripe.com/docs/connect/1099-K
@reallynicestamps wrote:Sorry, I'm a foreigner.
I thought the USA had 50 states.
Do only a dozen have state income taxes?
Not all states have income taxes. And not all states that have income taxes have a requirement for the 1099K. It is a mixture of the dozen states that require it per the link I previously posted.
The 1099K is an IRS form, not a state form. It is just that some states require the form to be issues at much lower levels that IRS does currently.
@plt4994 wrote:the $5000 limit is on the IRS website now
It says the same thing as it did when they released the threshold rates for 2023. It reads as follows "the IRS is planning for a threshold of $5,000 for tax year 2024 as part of a phase-in to implement the $600 reporting threshold enacted under the American Rescue Plan (ARP)."
That does not mean it has been approved, it means they are planning for it. That could change at any time and we likely won't know what the threshold is until December. Which has been their time to announce the threshold for the last 3 years or so.
With that said, it really doesn't matter. It is ONLY a form. It does NOT set the threshold for reporting income to the IRS as the IRS has no such threshold. We are all responsible for reporting ALL our income whether represented by a 1099K or not.
So if they do change the threshold to 5K for next year, that doesn't mean if you have $4999 go through your Managed Payment account that you don't have to report that income.
@700silverv wrote:"We are all responsible for reporting ALL our income whether represented by a 1099K or not", this is not 100% true as written, the IRS wants you to report all income most of the time, but they are not worried about the couple of personal things you sold in a year at a lost, if that is all you sold and nothing else.
It is better to be safe than sorry. If you sold them at a loss, then there is no harm representing those numbers on your Tax return as it would have no impact to taxes you may owe. It will keep you out of trouble in the future and will only take a little bit of your time now.
