New Tax Obligations for Us Small Sellers

[Anonymous]

So millionaires can move their money around and avoid paying any Income tax while we (the lowly Ebay sellers)  get taxed for anything and everything over $600 in a taxable year. How nice. I have been selling on Ebay for 10 years trying to supplement my Social Security Income along with my wife's to try and keep our head above water.  Looks like that is about to end. Unless things change, I will be closing my store at the end of January. I will liquidate my small inventory at a loss if necessary. I WILL NOT SET UP A SET OF RECORDS FOR THE SMALL AMOUNT OF NET INCOME I MAKE IN A YEAR.  I will say good-bye now to some of the great sellers and buyers I have met during my time selling and buying here. I will try to keep in touch with you all. Merry Christmas.

[kensgiftshop]

@Anonymous 

The only thing that will change is the amount when Ebay has to report it to the IRS.

You claiming any income made has not changed and you're supposed to be reporting it anyway.

[mtgraves7984]

Merry Christmas to you, too. And a Happy New Year!

[soh.maryl]

You realize that this is a Federal law (IRS) not an eBay rule, right?

And that you will encounter the same restrictions, no matter what platform you chose for selling? 

[itsjustasprain]

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@Anonymous wrote:

Unless things change, I will be closing my store at the end of January. I will liquidate my small inventory at a loss if necessary. I WILL NOT SET UP A SET OF RECORDS FOR THE SMALL AMOUNT OF NET INCOME I MAKE IN A YEAR.  I will say good-bye now to some of the great sellers and buyers I have met during my time selling and buying here.

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Okay. Bye!

[femmefan1946]

You are not being "taxed" on $600.

You are being required to report sales of over $600 a year.

And from that GROSS sales you can take all you Costs, like procurement, packaging supplies, eBay fees, printer ink, sales taxes, insurance, losses in mail or to refunds.

Some sellers who have not been doing this exercise may be shocked to learn that their side hustle was actually a money-losing hobby.

I don't know what it's like in the USA, but here in Canada, after basic deductions (base income, dependents, medical and dental, sales taxes, bus tickets,etc. ) our first $17,000 is tax-free. The rest (including pensions -OAP and CPP) has a tax rate of 15% for gross incomes under $49,000.

If I get have a $47,000 gross annual income, I would pay about $4800 in taxes.

[whatmorefabric]

My friend has been with her partner for over 30 years.     They have not married as he is disabled.     He gets a check,  medical care,   home health aid and a housekeeper from the gov't.    She has run most of her business in the last 30 years in cash and has not paid much in taxes.

They have about 4 million dollars in property and always vote Republican because they do not want their taxes to rise.

This unreported cash income is what the IRS is going after.    It is billions of dollars.

[7606dennis]

What new tax obligation?!  Sellers have always had the obligation to report and pay taxes on their income.  Receiving a 1099 isn't a tax bill but rather a report showing how much gross income went through that account.  The only thing that the lowered amount requiring the form does is make it more difficult for people to not report their income accurately.

[southern*sweet*tea]

@Anonymous 

There are no new tax obligations. Absolutely NOTHING has changed in that respect. The only thing that has changed is the reporting requirements for entities that send 1099s. That's it. That's all that has changed.

YOUR responsibility is still the same - to report income and take the appropriate deductions. It's the same as it's been for decades.

I find it staggering the number of threads started over this. Are there really that many sellers who are so totally ignorant of how it all works, or are they all truly tax cheats??

[heckofagame]

I'm in continued awe over all these people having meltdowns while not understanding the change or the necessity of the change. Crazy times...

[luckythewinner]

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@Anonymous wrote:

we (the lowly Ebay sellers)  get taxed for anything and everything over $600 in a taxable year.

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No we don't get taxed on "everything over $600".

We only get taxed on our taxable income, just like we always have.

[jayjaspersgarage]

No, this is nothing new.  You should have reported all your sales from the day you first sold.  Well, for the first tax year when you had sales.  Talk to your tax advisor and have him run some 'what if' scenarios for you.  It's easy to track the most useful deductions each year.  Getting into the weeds was my wife's specialty since she did our taxes for 36 years.  She died in 2017.  I don't pull weeds when it comes to saving pennies.  Count your blessings.

[7606dennis]

OP!  You're operating a business in the form of an eBay store.  Are you saying that you have not had any form of bookkeeping system the whole time?

[7606dennis]

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@heckofagame wrote:

I'm in continued awe over all these people having meltdowns while not understanding the change or the necessity of the change. Crazy times...

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What amazes me is the number of people outing themselves for tax evasion on the boards since the $600 1099 requirement was announced. 😉 

[whatmorefabric]

I think a lot of older sellers think that Ebay is like a garage sale.