IRS $600 minimum threshold for 2024

[midtownmafia]

As of right now, Ebay shows the minimum threshold for 2024 being only $600. I did see something from Ebay that came out in April 2024 saying the threshold would be $5000 for 2024 and 2025, then $600 after that. Does anyone know for sure what the thresholds are? This is still a ridiculous amount and will eventually force me to stop selling on Ebay, just so I won't have to mess with hiring a dang CPA to figure out how much I lost each year selling on Ebay ... after the monthly Ebay store fee, selling fees Ebay takes from the purchase price and shipping price. I'm also wondering if this "gross amount" that Ebay reports includes all the taxes that Ebay takes out automatically that our hands never touch? The taxes should not be in our "gross amount" but I bet it will be. I understand it's our job to make deductions for internet, storage unit fees, shipping, etc.. but I would think taxes charged the buyer should not be included in our "gross amount". 

[nobody*s_perfect]

Nobody knows for sure, yet.  Last November, the IRS issued a memo which stated that the threshold for 2023 would be $20K and said that they planned for a threshold of $5K for 2024.  But there has been no official announcement yet about the threshold for 2024. Here's the memo:

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

The amount on the 1099-K includes the amounts that the buyer paid to you for the item and for shipping and handling, but does not include the sales tax that they paid. More details on the 1099-K here:

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

[yuzuha]

The 1099-K is irrelevant-- you are supposed to report ALL income to the IRS. The $600 number is only the threshold that triggers you receiving a form. It does not mean you do not have to report any income earned under that.

[lakefor94]

We need to bring Rosemary in on this one for clarification. 

[dbfolks166mt]

We need to bring Rosemary in on this one for clarification. 

[dbfolks166mt]

     This is about the 5th or 6th post on this subject in the last couple of weeks. As  nobody*s_perfect  noted at present NOBODY knows for sure what will be done at the Federal level for the 2023 tax year. Also a number of states already have lower 1099-K issuance thresholds. 

     The sales tax eBay collects and remits to the individual states is NOT part of the gross that is shown on the 1099-K. 

[inhawaii]

Why do so many people get so caught up in what the "threshold" is?

The threshold is one dollar.

Make a dollar or more and you have to report your income.

[bonanza125]

@inhawaii 

That's because folks who think that just because they are under the threshold they aren't subject to pay income tax. Then they come to be surprised that eventually they will get charged with tax evasion. 

[bonanza125]

@midtownmafia 

You make a profit correct? That is considered income. You are required by law to pay taxes on the income made after the deductions. You must do your book work and add up all the expenses. Ebay sends the 1099-K. You have the responsibility to do the book work. Don't like book work then stop selling. Again anybody who does not like book work, paying/spending time with an accountant or paying taxes shouldn't sell on Ebay.  When selling on Ebay you are a business.

[buyselljack2016]

No need for a CPA.

Easy to do online, and just do it the same way you have for the previous years that you have been selling.

Take your deductions. 

You must have another account. You have no store here, so no "store fees".

[mam98031]

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@midtownmafia wrote:

As of right now, Ebay shows the minimum threshold for 2024 being only $600. I did see something from Ebay that came out in April 2024 saying the threshold would be $5000 for 2024 and 2025, then $600 after that. Does anyone know for sure what the thresholds are? This is still a ridiculous amount and will eventually force me to stop selling on Ebay, just so I won't have to mess with hiring a dang CPA to figure out how much I lost each year selling on Ebay ... after the monthly Ebay store fee, selling fees Ebay takes from the purchase price and shipping price. I'm also wondering if this "gross amount" that Ebay reports includes all the taxes that Ebay takes out automatically that our hands never touch? The taxes should not be in our "gross amount" but I bet it will be. I understand it's our job to make deductions for internet, storage unit fees, shipping, etc.. but I would think taxes charged the buyer should not be included in our "gross amount". 

---

You misunderstood something.  Ebay didn't release any information like that.  I see that the threshold on the FORM has been explained to you, so I won't do that again.

It really doesn't matter.  With or without this form or any other form, we are all required by law to report all our income on our federal tax return.  Don't confuse some form with setting some imaginary threshold for reporting your income.

There is like a dozen different types of 1099 forms.  The 1099INT, for interest earned has a $10 minimum threshold.  But that form doesn't set the minimum threshold for reporting income either.  Nor does any other type of 1099 form.

Why would you need a CPA.  Just track your records.  Keep all your expenses.  A CPA is not required.  

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

[reallynicestamps]

Whatever the minimum the federal taxman wants, I understand that some state tax offices send out similar forms to help their taxpayers see their gross income and calculate their taxable net income after deductions.

And most of those states use $600 for the de minimus at which the form is sent.

[ewsupply]

@dbfolks166mt 

"The sales tax eBay collects and remits to the individual states is NOT part of the gross that is shown on the 1099-K." 

What is part of the gross amt is Commissions & Shipping. Don't forget those can be deducted on your taxes.

[johnrj1226]

One  more thing  if one  lives  in a state that has a state income tax they may have a threshold of $600.  That 1099K is good for both the IRS and state income taxes -  one receives 3 parts one for the seller records, one for the IRS and one for the state income tax.  Sellers need to  check into that too.

[dbfolks166mt]

"The sales tax eBay collects and remits to the individual states is NOT part of the gross that is shown on the 1099-K." 

What is part of the gross amt is Commissions & Shipping. Don't forget those can be deducted on your taxes.

     Of course along with a multitude of other expenses including but not limited to refunds, returns, COGS, supplies, POV........................... For reference attached is the Schedule C instructions. 

https://www.irs.gov/pub/irs-pdf/i1040sc.pdf