New 1099K Threshold

[dtp204]

Just received an ebay email about the new 1099K threshold and a link to complain to congress about it. Seems obvious the fact small sellers who sell downsized/unwanted items would be the most adversely affected from it; congress just did not care. There's a revenue stream to be tapped into and if some little fish get sucked up in the hose so be it.

The example of a small seller selling a $1500 bike for $800 that will now receive a 1099K and have to prove it sold at a loss for no profit was given in the email, stating a person is doing small selling on Ebay is not going to treat it as a business with all the proper record keeping and such to keep up with capital gains and losses. All true. So, if it is a one off sale for some quick cash, winding up with a net of $700 is not bad. But if continuous ebay selling is a strategically integrated income in one way or another, for a small seller selling downsized/unneeded things will get messy rather quickly. For some the easiest fix will be to not to even bother with the hassle contesting the amount on the 1099K, which is the desired course intended IMO when the law was changed. For others it will be to stop selling.

[heckofagame]

Who fishes with a hose?

[gosimus]

@dtp204 

< Just received an ebay email about the new 1099K threshold and a link to complain to congress >    

Always be dubious about unknown links you receive in messages from people you don't know.  Thieves could use the complaint ruse to sneak a keystroke logger into your computer.  

[rfmtm]

For the occasional garage sale seller, the 1099K is not really a problem, just a couple of extra entries on your 1040 tax form and usually no extra tax due.  Besides you should be reporting any income whether you get a 1099 or not.

Generally for most personal item sales there is no profit, as it is obvious you are selling at a loss, so you only need to provide a reasonable estimate of value.

Currently the IRS is allowing a simplified way to do this when just selling personal or garage sale items not for profit or as a business or hobby. You report the total amount as Misc/Other Income. You then can post an Adjustment up to that total amount to offset that income. This results in a wash (zero profit), you will owe no taxes, and the IRS will be happy.

Any accountant or tax software can guide you through this.

[dtp204]

Always top of mind for me with my emails! If a scam, the form to fill out one's personal info is the really blatant sketchy part. 

[johnson_junk_company]

You don’t have to “prove” you sold it as a loss. This is where, apparently, eBay and the general public are obvious to how retail works. The original cost of your bike is not what you figure when you resell. The price of the item at the time you resell the item is the price of the item. If you bought the bike say, 5 years ago for 1500, the value of the item today is not 1500. It would be around $800.00. All items are subject to depreciation. To get out of paying taxes on $200 of the $800, you subtract any fees and shipping expenses you incurred. It’s not rocket science people. 

[wrong66]

The ONLY sellers that will be affected by the lower threshold are the ones who never claimed income for eBay sales to the IRS. 

[kensgiftshop]

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@dtp204 wrote:

For others it will be to stop selling.

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And those of us that has been reporting our income all along, it'll be business like normal.

[heckofagame]

What if you get a random audit? Then you may have to prove your loss, depending on the mind-set of the IRS employee.

[Anonymous]

I signed it and received a nice generic letter from our congress woman about this.  It helps.

[dnasilver]

The 1099K is a legal tax form and every time the company responsible makes an error the IRS can fine them. It is a great cross check to your own records. The IRS is not going to ask anyone selling a bike one time to prove it. The tax dollars do not out weigh the cost for that low value item.

[dnasilver]

What if .................there are lots of those in life. Any CPA can tell you exactly how to handle your items.

[12345jamesstamps]

I agree...talk to your accountant...I do H & R Block.  I deduct what I can from selling...postage, tape, envelopes, eBay monthly fees, wifi, telephone bill(eBay is on it)....if I get a New PC this year that can be on it.

Its all about deductions and make sure you save receipts. I did it years ago but decided to stop selling high end stuff. But the $600. limit instead of $2000. will make everyone get a 1099K in 2023. 

[divwido]

Congress does not care?  The IRS cares very much.  They care that people are making money and lying about it.  That's why this form now exists. 

Anyone who was cheating will likely stop selling-yes, I agree with that statement.  Good, it's not fair to the rest of us who do claim their income.

What was the complaint?  This makes a level playing field between employees and self employed-that's a good thing.

[stephenmorgan]

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@heckofagame wrote:

Who fishes with a hose?

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Have you ever been Carp Fishing?  There is a hose that is used.  Don't know if it ever caught on or maybe it was a great seller as there are none in stock.

There is also this one that will suck them fish right out the water.