eBay

timsmitty · ‎11-22-2023

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

WHY? doesn't Ebay announce this? I have to tell everyone, really? This is GREAT news for many

monroe67 · ‎11-23-2023

Remember this ONLY changes the FORM. Nothing more than that, just the FORM and when it has to be issued.

The IRS rules for reporting income remain the same. With or without this FORM, you are suppose to be reporting ALL your income. So the ONLY thing that changes for those with smaller sales is that they won't get the FORM. They still need to report their income to IRS, they just won't get the FORM."

Oh, I get it completely !! You are preaching to the lead soprano in the choir here !! (If only I could sing . . . .)

I strongly urge everybody to click on the link given in timsmitty's original post. It is the IRS's FS (Fact Sheet)-2023-27 issued by the Internal Revenue Service to help people understand their previous announcement, IR-2023-232, Nov. 21, 2023. Print the Fact Sheet or save it as a .pdf. It's a handy reference.

The fact is that these IRS announcements immediately affect eBay itself more than they affect eBay sellers.

eBay, as a "third party payment platform" is required to report those payments to the IRS, when those payments meet certain criteria ("threshold") of number of transactions and dollar amounts. The title of this Fact Sheet is "IRS announces 2023 Form 1099-K reporting threshold delay for third party platform payments."

For purposes of reporting via the 1099-K, eBay has the responsibility as an Electronic Payment Facilitator and as such, eBay to report transactions to the IRS.  The method by which Electronic Payment Facilitators (such as eBay) send those reports to the IRS is the Form 1099-K.

These recent announcements tell eBay and other Electronic Payment Facilitators, essentially, "OK, guys, once again this year, 2023, we at the IRS don't ne-e-e-ed you to tell us about any seller who got less than $20,000 from you. Please just carry on with that "old" limit of $20,000 and 200 transactions for 2023."

I want to copy and paste a few more sentences from the first page of the Fact Sheet that "Tim" provided, with bolding and colored text added by me:

"What this means

"This means that for 2023 and prior years, payment apps and online marketplaces" [like eBay] "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.

"This phased-in approach will allow the agency to review its operational processes to better address taxpayer and stakeholder concerns.

"Taxpayers should be aware that while the reporting threshold remains over $20,000 and 200 transactions for 2023, companies could still issue the form for any amount." [My comment: In this sentence, "reporting threshold" refers to the 1099-K reports required from eBay. "Reporting threshold" in this sentence does not refer to individual or joint-filer taxpayers writing or typing the amount of their eBay sales onto their tax returns.]

"It's important to note that the higher threshold does not affect the actual tax law to report income on your tax return. All income, no matter the amount, is taxable unless it's excluded by law whether a Form 1099-K is sent or not."

the_fancy_fox · ‎11-23-2023

You don’t pay tax on your used stuff. You enter the 1099 into your tax form and then write off the original cost of the item. You can estimate on your personal used goods.

Ta-Dah! No tax owed.

The Race is over
The Rats won.

the_fancy_fox · ‎11-23-2023

Wouldn’t surprise me at all if the irs is still getting that information so in the future they know who to target.

The Race is over
The Rats won.

kensgiftshop · ‎11-23-2023

@lenaonce369 wrote:
He means, it`s good news for moms and papas who sells their old shoes and sweaters and vintage pillows... on eBay just to generate a little income for family. I think it`s ridiculous to pay taxes for selling crap from your closet. Ebay just sent me a message about Form 1099 and holds funds even my sales are below $600. Ebay`s Agent informed me that they count cancelled sales as well.

Why shouldn't the moms and pops report their income like the rest of us?

What makes them any better/different then any other seller?

Have a great day.

kensgiftshop · ‎11-23-2023

@timsmitty wrote:
Ha Ha! Great news I say! You assume everyone is a criminal but maybe doing taxes is so complicated with these, it is best not to have to

It's only complicated for the ones that haven't been reporting their income.

Myself they should do away with the limit and have to report all the income a seller makes.

Have a great day.

mr_lincoln · ‎11-23-2023

@lenaonce369 wrote:
He means, it`s good news for moms and papas who sells their old shoes and sweaters and vintage pillows... on eBay just to generate a little income for family. I think it`s ridiculous to pay taxes for selling crap from your closet. Ebay just sent me a message about Form 1099 and holds funds even my sales are below $600. Ebay`s Agent informed me that they count cancelled sales as well.

@lenaonce369

Yes, they would include Cancelled transactions in the 1099K total because Sellers can deduct the refunded amount on their income tax return along with the cost of packaging material, a % of their home used for selling, travel expenses to the carriers, value of inventory and on and on.

Our state (the last time I checked) has a $ 500 threshold for reporting the sale or personal items at yard and garage sales so I suspect the Federal $ 600 threshold lines up with a lot of State requirements ... our state has no infrastructure to monitor yard and garage sales but that could change in time. My issue with the resale of any used item is that sales tax is levied on the transaction despite the fact that (other than 5 states) sales tax was charged at the time items were originally purchased. And while I would love NOT to have to pay income taxes on eBay sales I use the IRS schedule C to take advantage of as many deductions that can apply to what I do. That helps reduce the tax burden at the end of the year.

Regards,
Mr. Lincoln - Community Mentor

bryo_3145 · ‎11-23-2023

"I could have sold more stuff. "

mam98031 · ‎11-23-2023

"You are preaching to the lead soprano in the choir here !! " Having a self appointed position in the choir doesn't change anything.

I just wanted to make it very clear as your other post seemed a bit fuzzy on that or could seem that way to others. Thank you for the additional info.

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

mam98031 · ‎11-23-2023

@mr_lincoln wrote:
@lenaonce369 wrote:
He means, it`s good news for moms and papas who sells their old shoes and sweaters and vintage pillows... on eBay just to generate a little income for family. I think it`s ridiculous to pay taxes for selling crap from your closet. Ebay just sent me a message about Form 1099 and holds funds even my sales are below $600. Ebay`s Agent informed me that they count cancelled sales as well.
@lenaonce369

Yes, they would include Cancelled transactions in the 1099K total because Sellers can deduct the refunded amount on their income tax return along with the cost of packaging material, a % of their home used for selling, travel expenses to the carriers, value of inventory and on and on.

Our state (the last time I checked) has a $ 500 threshold for reporting the sale or personal items at yard and garage sales so I suspect the Federal $ 600 threshold lines up with a lot of State requirements ... our state has no infrastructure to monitor yard and garage sales but that could change in time. My issue with the resale of any used item is that sales tax is levied on the transaction despite the fact that (other than 5 states) sales tax was charged at the time items were originally purchased. And while I would love NOT to have to pay income taxes on eBay sales I use the IRS schedule C to take advantage of as many deductions that can apply to what I do. That helps reduce the tax burden at the end of the year.

@mr_lincoln and @lenaonce369

A cancelled transaction would ONLY be included on a 1099K Gross Receipts IF the buyer had PAID for the transaction and then the transaction was cancelled. Cancelled transaction that were never paid by the buyer are NOT included in the 1099K numbers.

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

mam98031 · ‎11-23-2023

@bryo_3145 wrote:
"I could have sold more stuff. "

@bryo_3145

Yes you could have. But you still need to claim the amount you did sell as the IRS rules on reporting income did NOT change.

mam98031 • Volunteer Community Member • Buyer/Seller since 1999

bryo_3145 · ‎11-23-2023

"ANY income made is taxable income. " At least that what my accountant told me."

"Just to think of all the sellers that have not paid taxes for their sales over the past 10 years or more."

I'm sure ebay inc. has to pay taxes on their income.

Ever since the start of PayPal there is a track record of all transactions.

bryo_3145 · ‎11-23-2023

"There are some states are now forcing people to pay taxes on garage sales."

There was a homeless man, with mental illness picking up cans, bottles and making money off of his recycled refunds. It was in the local paper. That's how he made a living. Once it hit the paper and he claimed he made x amount of money a year doing this. Taxable income. He got nailed.

bryo_3145 · ‎11-23-2023

Then you have to ask.

Where do all our tax dollars go. Is it being mismanaged. Who is accountable.

b86fiero · ‎11-23-2023

Just a little note here ......... since eBay has been collecting sales tax on your sales and submitting those funds to your state taxing authority or State Treasurer on your behalf you just might find at some point down the road that you failed to include that income on your State Income Tax filing and have accrued interest and penalties and that quite possibly you have been operating a business without a license. I wonder if you will find you also owe your city and county of residence a few dollars.

Income is income and is legally required to be reported and taxes paid. Federal, state (if your state taxes income), city and county. Everybody wants a piece of your pie.

Again, this is a legal matter and should be discussed with a licensed accountant, licensed tax preparer and your attorney.

nobody*s_perfect · ‎11-23-2023

@b86fiero wrote: ... since eBay has been collecting sales tax on your sales and submitting those funds to your state taxing authority or State Treasurer on your behalf ....

Sales tax is based on the buyer's location and is submitted to the buyer's state.