mam98031 • Volunteer Community Member • Buyer/Seller since 1999
totally agree 87,000 armed irs bureaucrats with s license to kill (IRS website says must be willing to use deadly force for new hires).
I'm unsure as to what you are agreeing with. Posting incorrect information isn't helpful to anyone. It may make you feel better, but it helps no one. IRS is receiving more money so that they can get the things they need. It is NOT just for agents that audit us. It is an increase in their budget so they can get what they need. An important factor to remember is this influx in cash to IRS is over a TEN YEAR period.
https://www.npr.org/2022/09/07/1121644091/the-irs-is-getting-80-billion-for-what
Used to be $20K before 1099 was triggered, now $600. In addition anyone making over $600 has to pay IRS an additional 15% as a independent business seller. eBay also includes cancelled orders that you were never paid for as part of your income.
We were always responsible to report our income regardless of the fact we received a FORM, which is all the 1099K is. Certainly you aren't suggesting that under the old threshold that anyone that made 19,999 or less did not have to report their income to IRS. A FORM has never set the minimum threshold for reporting income on your federal tax return. IRS has no minimum threshold for reporting income. So if you get this form, it shouldn't cause you any problems as you should have been reporting your income all along. Now you are just going to get this form. That shouldn't create anyone and issue that has always reported there income correctly.
As to orders that get cancelled. If payment was received and then the cancellation happens, then yes it will show up in your 1099K numbers. If no payment was ever received and the order gets cancelled, then it won't be in your 1099K numbers.
A 1099K reports the entire amount of money that was incoming to your account in a years time. It reports your GROSS Receipts. It is BEFORE you take any deductions for refunds, shipping, Ebay fees, etc. But you do get to deduct that stuff on your taxes to arrive at your Net Income before taxes.
For decades I've always used standard deductions on my taxes . Now I'm supposed to save every scrap receipt to prove that what was in my closet for 10 years is a legitimate deduction? The writing is on the wall. Looks like nuclear war is the only thing to stop this. Been here 23 years, but I'm gone now.
This isn't correct either. You need to do some research so that you can better understand the requirements and what you can do to make things easier for you to report. Sellers that only sell their personal stuff will likely not have any additional taxes because of it if they follow the rules.
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
@traditonalproducts wrote:Why? EBAY has your records and you should copy and install in a zip file. We created a LLC for a number of reasons mainly to separate the business from our personal stuff. Regardless the LLC will file into your personal income but the benefits you receive will offset the LLC costs etc. If the IRS wants to audit just have the back-up paperwork namely what your paid for the merchandise, you sell. Nothing easy anymore my friend.
You don't have to have a LLC in order to take deductions for costs. A great many of sellers here operate as a Sole Proprietorship and that works just fine. It doesn't have to be formally set up like an LLC does.
@katzrul15 wrote:
@bonjourami wrote:It was never 20,000K, that threshold was when Paypal would issue the 1099. Sellers were always responsible to report any and all of their earnings.
This concept seems to conveniently be ignored by many sellers. The ride was never free - or at least was not intended to be!
Actually I find this very scary how many sellers actually thought [and didn't] report their income if it was under 20K. Those sellers are likely to have some serious problems with IRS moving forward.
