Helpful Information about 2022 and our 1099Ks, released by Ebay

[mam98031]

Ebay released this announcement today.

eBay and TaxAct®, a leading DIY tax preparation service, are partnering to help untangle the impact of the new threshold for Form 1099-K and provide information and support you may need to prepare your tax filing with TaxAct's new Tax Information Center for eBay Sellers.

Prior to 2022, eBay and other online marketplaces were not required to issue Form 1099-K until sellers reached an annual threshold of 200 transactions and $20,000 in gross payments. As of January 1, 2022, the threshold was lowered to $600 and marketplaces like eBay are now required to report gross payments totaling $600 or more in a calendar year, with no transaction minimum. 

We understand the new tax requirements can be confusing. We’re here to help.

Targeted 1099-K tax guidance for eBay sellers—powered by TaxAct

eBay and TaxAct have launched the Tax Information Center for eBay Sellers to help you understand your Form 1099-K tax obligations. The Tax Information Center for eBay Sellers offers expert articles, blogs, tips, and insights that may be relevant to your unique situation. You’ll also find a 5-point tax preparation checklist that will help ensure that you’re compliant when you file your taxes.

Professional assistance from TaxAct—online, for free 

Whether you're a casual hobbyist or high-volume seller, TaxAct offers the tools and support you need to make filing easy. TaxAct services are used by millions of customers each year, and filers can access free online assistance from CPAs and other tax experts through TaxAct Xpert Assist℠. TaxAct works closely with the IRS and state authorities to ensure the security of filers’ accounts, and guarantees the calculations on their returns are 100% accurate.

Disclaimers:

eBay and its affiliates do not provide legal, tax, or accounting advice. This material is being provided for informational purposes only and is not intended as, and should not be relied upon for, legal, tax, accounting, or other professional advice. Please consult your own legal, tax, and accounting advisors for advice specific to your situation 

TaxAct Xpert Assist is available as an added service at no charge for TaxAct’s online, consumer-prepared 1040 and sole proprietor products. Service hours limited to hours of operation and by expert availability. Some tax topics or situations may not be included as part of this service. View full TaxAct Xpert Assist Terms and Conditions.

Learn more about the new 1099-K requirements.

As always, thank you for selling on eBay.

https://community.ebay.com/t5/Announcements/eBay-and-TaxAct-partner-to-help-you-navigate-new-Form-10...

It is full of GREAT information.  It will help to settle many assumptions that are being made and bad information that is being shared.  This will help us all better understand this process.

Thank you Ebay for releasing this wonderful tool.

[monica-sells]

I just checked this out....

thanks for posting it here

once you adapt to the 'upsells' this page(s) in particular

eBay Sellers Archives - TaxAct Blog

[dbfolks166mt]

     I find it interesting that eBay prohibits sellers from promoting or advertising businesses but eBay is escentually doing exactly that with a business they have formed a partnership with. Why don't they tell people to go to TurboTax, H&R Block or a dozen other commercial software companies that offer tax preparation software? Nothing in life is free I will be interested to hear back from some of the sellers that utilize this service. 

     O well their site their rules I guess. 

[luckythewinner]

Appreciate the post 👍

The "Unique Scenarios Explained" page seems to confirm the concerns I have had all along - that if you cannot document your original cost, you may be out of luck. They seem to suggest that "guesstimates" are risky and a last resort.

And the advice I see so often here  to "just use fair market value and report no profit" does not seem be even mentioned as a possibility by these tax prep professionals.

[luckythewinner]

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@dbfolks166mt wrote:

     I find it interesting that eBay prohibits sellers from promoting or advertising businesses but eBay is escentually doing exactly that

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I don't find it terribly interesting, especially when they announce up front that they are business partners and the business they are promoting does not really compete with anything sold on eBay.

And I would not be surprised if this is an exclusive arrangement and that TaxAct offered eBay a better package of incentives that the other tax prep companies did in order to secure the deal.

[monica-sells]

although I agree with you, I offer a counter-point

there is precedent when you utilize the 'fair market value' for inheritance...

it is an accepted accounting practice to value items you inherit.....

there is NOT a precedent using that value as a reseller....

(for an item you may have had around your house for 30 years)

once you have a precedent, the answer will be much clearer

I suspect we will have some cases coming up by next summer that will give us better guidelines.....

if I (personally) can establish a fair market value on a 'vintage' item, through comparable sales or any accepted method to establish a 'cost basis' I will do so.....(with total confidence)...

it might be interesting going forward....especially with the increase in gov't employees to check your numbers

[luckythewinner]

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there is precedent when you utilize the 'fair market value' for inheritance. it is an accepted accounting practice to value items you inherit

It's not a "precedent" or an "accepted practice" - it is a very specific regulation carved out by the IRS for inheritance. (The IRS instructs you to use the fair market value on the date of the decedent's death, or the alternate valuation date if the executor files an estate return and elects an alternate valuation date).

there is NOT a precedent using that value as a reseller....

Nor have I ever seen one for selling personal items that you did not inherit. For non-inherited property, you can't just use the inheritance regulation and ignore the part that limits it to inheritance.

There is also an IRS regulation that says you can take a mileage allowance when you use your car for business purposes. But for non-business use, you can't just use the mileage allowance and ignore part that limits it to business use 🙂

[dbfolks166mt]

I don't find it terribly interesting, especially when they announce up front that they are business partners and the business they are promoting does not really compete with anything sold on eBay.

And I would not be surprised if this is an exclusive arrangement and that TaxAct offered eBay a better package of incentives that the other tax prep companies did in order to secure the deal.

     I have no doubt that eBay is getting a piece of the action from any software sales that TaxAct will get as a result of this partnership. No different than what they pay out to other sub-contracted partners like Adyen, Pitney Bowes, authentication centers and others. Actually a pretty clever move on eBay's part to increase their revenues. 

     But since eBay is not actually selling anything directly from TaxAct the other tax preparation services should be able to post an notice in the seller forum offering free advice regarding the preparation of taxes and dealing with the nuances of the 1099's. 

[mam98031]

..

[mam98031]

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@dbfolks166mt wrote:

     I find it interesting that eBay prohibits sellers from promoting or advertising businesses but eBay is escentually doing exactly that with a business they have formed a partnership with. Why don't they tell people to go to TurboTax, H&R Block or a dozen other commercial software companies that offer tax preparation software? Nothing in life is free I will be interested to hear back from some of the sellers that utilize this service. 

     O well their site their rules I guess. 

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The site is owned by Ebay not the sellers.

[luckythewinner]

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@dbfolks166mt wrote:

 the other tax preparation services should be able to post an notice in the seller forum offering free advice regarding the preparation of taxes and dealing with the nuances of the 1099's. 

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I do not think anyone is prevented from posting in the seller forum offering free advice regarding the preparation of taxes and dealing with the nuances of the 1099's. 

But I suspect they would be prevented from identifying themselves as representatives of those Tax Prep firms, because that would probably be construed as a form of advertising. 

That would probably violate this par of the rules of engagement: "advertising listings, products, or services in order to solicit sales or otherwise use the Community as a marketing platform"

[joseh1445]

Thank you, but no thank you.  Unfortunately, I don't believe on any thing that ebay says any more.

[mam98031]

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@joseh1445 wrote:

Thank you, but no thank you.  Unfortunately, I don't believe on any thing that ebay says any more.

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Then you can do your own research @joseh1445   Here are some places to start.

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

[tackejacke]

I just received a 1099-K for 2022.  I understand we are not required to file for 2022 so I wonder why I received one.  I am a casual seller.  But, I am glad I got a look at what eBay considers detailed backup.  It looks like a 3rd grader did the spreadsheet.   There is also another backup up sheet with monthly information which is also unhelpful.  After seeing what is being provided I suggest to everyone to keep the most detailed information you can yourself and hope for the best.  I can't imagine any tax person trying to go through all this junk to see if the amount declared is correct.

Most, if not all, of what I sell are my own or family member items.   I just ended all of my listings for 2023 and am considering just donating everything and getting a tax write-off.  This is definitely not worth the time or effort.   After 24 years selling on eBay, I'm ready to hang it up.

[tackejacke]

Has  anyone else received a 1099-K for 2022?