New Tax Threshold

[dragonsmoke6969]

I've done some digging around and it was suggested that we hobbyists lobby together and spread the word to write the IRS tax reform division. I'm going to start discussion groups on all the platforms I use and anyone else that will listen. The main point being that the laws are forcing hobbyists to become businesses. Website to follow.

https://www.taxpayeradvocate.irs.gov/submit-a-tax-reform/

[fbusoni]

---

@dragonsmoke6969 wrote:

I've done some digging around and it was suggested that we hobbyists lobby together and spread the word to write the IRS tax reform division. I'm going to start discussion groups on all the platforms I use and anyone else that will listen. The main point being that the laws are forcing hobbyists to become businesses. Website to follow.

https://www.taxpayeradvocate.irs.gov/submit-a-tax-reform/

---

I think most people would prefer to pay the tax like they are supposed to.  There should be enough deductions available to partially or even fully offset whatever paltry sums are being made.

The thought of being in charge of -- or even becoming a member of another "discussion group" -- never mind setting up a website devoted to this non-starter of an issue, is too much for me to even contemplate.   😁

[vtgbeersigns]

It's a joke.  They have it so low now you can't use the standard deduction and lose $4000-10000 in deductions itemizing.  Next you still have to pay taxes on the stuff you sold but you can write of Alot.  But you're still losing that main deduction going from standard to itemizing.  It's not worth selling on here unless you're doing a lot more revenue.

[annadryl]

I keep an inventory of a line of jewelry and regularly sell it purely for fun? Any money I make is coincidental so not taxable?

[mam98031]

---

@vtgbeersigns wrote:

It's a joke.  They have it so low now you can't use the standard deduction and lose $4000-10000 in deductions itemizing.  Next you still have to pay taxes on the stuff you sold but you can write of Alot.  But you're still losing that main deduction going from standard to itemizing.  It's not worth selling on here unless you're doing a lot more revenue.

---

@vtgbeersigns 

What?  IDK what you are referring to.  I've been a seller for almost 25 years.  Long before this Form even existed.  Some years with very small sales.  In all years with or without the form, I reported by sales less ALL my costs.  Nothing prevented me from doing that.  So I don't understand what restrictions you are referring to, would you please give more details.

[onefootflippers]

The hilarious part is that most of these part time and hobby sellers who are scared to death of actually filing the tax forms don't realize that they likely won't end up paying much of anything. 

The mileage, partial internet, partial cell phone and home office deductions along with cost of goods and supplies will bring most part time and hobby seller's ebay income down to zero. 

[chapeau-noir]

As long as you're selling $600 sets of Trifari jewelry, you should probably know that the correct spelling for the specialized instrument used by jewellers is a 'loupe' not a loop.

[toomuchstuffagain35]

Trump DID take away the ability for 'hobby sellers' to deduct their expenses the last time he was in, but that has nothing to do with having to report income which is what the 1099 form helps keep track of.

Frankly, since he did that, you're better OFF running it as a business and keeping your deductible 'business' expenses.

But that's just me.

[nobody*s_perfect]

---

@vtgbeersigns wrote:

It's a joke.  They have it so low now you can't use the standard deduction ... you're still losing that main deduction going from standard to itemizing. ..

---

Here's another example of why these Community boards are not a good resource for tax filing advice.  

If you make a profit through your eBay sales, as shown on Schedule C, that gets entered as income on 1040 line 8.

You can still choose whether to itemize your deductions on Schedule A or take the Standard deduction on line 12.

[chapeau-noir]

---

@toomuchstuffagain35 wrote:

Trump DID take away the ability for 'hobby sellers' to deduct their expenses the last time he was in, but that has nothing to do with having to report income which is what the 1099 form helps keep track of.

Frankly, since he did that, you're better OFF running it as a business and keeping your deductible 'business' expenses.

But that's just me.

---

I recall a friend of mine saying "the best thing about a small business is all the deductions you can take."

Yep, forget the 'hobby' shtick, you're better off just keeping it simple - file.

[lux.ra_14]

Here's what the IRS says about a hobby versus a business:

A hobby is any activity that a person pursues because they enjoy it and with no intention of making a profit. People operate a business with the intention of making a profit. Many people engage in hobby activities that turn into a source of income. However, determining if that hobby has grown into a business can be confusing.

Hobby or not, in no case does the IRS say that any income is exempt from taxes that are potentially due. More info and reporting requirements here:

https://www.irs.gov/newsroom/heres-how-to-tell-the-difference-between-a-hobby-and-a-business-for-tax...

[meme6253]

Well the president doesn't follow the laws either in fact he likes to break them, If he is suppose to represent & set a precedence we are in a world of trouble!

[meme6253]

Collecting money sounds like a Great hobby!

[meme6253]

Yeah probably loses the whole hobby thing.

[vtgbeersigns]

Not everyone did and they shouldn't have too if they're just selling random junk around the house.. me Ive always had too because I sold high priced random stuff and bought excess stuff since I've been on here.  I'm saying if someone sells a 8000 truck on here and 5000 in households they get a 13,000 1099 on here.  Now to keep the standard they got to pay 25% fed on this or go from standard to itemizing losing their standard deduction.. so if you paid 20,000 for truck and depreciate it to 8k you pay no tax itemizing..  but youve lost the main standard to do that.  Or you're paying $2000 in taxes on this if you stay standard.   Basically you're caught either way paying taxes because there's really nothing to itemize unless you're running a business, and you obviously can't do the standard deduction.  Id advise any serious sellers on here to get an LLC for tax purposes but there's very strict rules on it now.  That way, on your personal taxes , you don't lose your standard deduction because outside of donations and home , there's nothing else to deduct 

[nobody*s_perfect]

---

@vtgbeersigns wrote: ... to keep the standard they got to pay 25% fed on this or go from standard to itemizing losing their standard deduction.. so if you paid 20,000 for truck and depreciate it to 8k you pay no tax itemizing..  but youve lost the main standard to do that.  Or you're paying $2000 in taxes on this if you stay standard. ...

---

No, that's not how it works. You can still take the standard deduction, because your eBay expense deductions are on Schedule C, not on Schedule A.  On Schedule C you'd deduct the $20K purchase price so you'd have no net profit to report. Here are some suggestions from the IRS:

Q3. Is the gain or loss on the sale of a personal item used to compute my taxable income? Is that reported on a Form 1099-K? (added December 28, 2022)
A3. Gain or loss on the sale of a personal item is generally the difference between the amount you paid for the item (the purchase price) and the amount you receive when you sell it (the sales price).
For example, if you bought a refrigerator for $1,000 (the purchase price) and sold it for $600 (the sales price), you have a loss of $400. $600 sales price - $1,000 purchase price = ($400) loss amount.
On the other hand, if you bought concert tickets for $500 (the purchase price) and sold them for $900 (the sales price), you have a gain of $400. $900 sales price - $500 purchase price = $400 gain amount.
For calendar year 2022 tax returns, if you receive a Form 1099- K, for the sale of a personal item that resulted in a loss, you should make offsetting entries on Form 1040, U.S. Individual Income Tax Return, Schedule 1, Additional Income and Adjustments to Income, as follows:
Report your proceeds (the Form 1099-K amount) on Part I – Line 8z – Other Income, using the description "Form 1099-K Personal Item Sold at a Loss."
Report your costs, up to but not more than the proceeds amount (the Form 1099-K amount), on Part II – Line 24z – Other Adjustments, using the description "Form 1099-K Personal Item Sold at a Loss."

https://www.irs.gov/pub/taxpros/fs-2022-41.pdf
 
In other words, if everything you sold was sold at a loss (as in a garage sale), you enter the total from your 1099-K on line 8z and then enter that same amount on line 24z for a net of zero for taxable income.