eBay

docstill299n · ‎08-27-2021

I know that until next year, the threshold for a 1099 form is $20,000 AND 200 transactions. However, I seem to recall that repeated sales to the same Buyer only count as a single transaction. Is that true? So, if I sold the same Buyer something in April, June and August, that only counts as one transaction? For sure?

Also, do cancelled or refunded/returned transactions count?

jayjaspersgarage · ‎08-27-2021

"

Me again. So, if a Buyer orders 2 of a single item at one time, I guess that is 1 transaction?

If they order 2 different items, add to cart, and make a single payment, is that still 1 transaction?"

What is the gist of your tax evading question? We all are supposed to report all sources of income regardless of whether you get a 1099 for it or not. If you sell at a flea market more than three times per year you are supposed to get a 1099. The IRS can reach back ten long years into your ebay sales or any other on-line platform you may have used in the past decade.

Does that answer your real question? Counting the transactions won't matter anymore after 12/31/21.

nobody*s_perfect · ‎08-27-2021

@docstill299n wrote:
OR - maybe they count only payments from eBay to me (bank deposits)? That would make sense, and a single deposit transaction could span several purchases. Previously, before MP, the money went striaght from Buyer to Seller - Now, eBay is the only one paying the Seller. Anyone know? Thanks?

Each payment that eBay receives for you counts as a transaction. If a buyer makes a payment to you that's one transaction regardless of how many items the buyer purchased. If he purchases 3 items and pays for them separately, that's 3 transactions whether they're months apart or all on the same day.

Before MP, the payments went from the buyer through PayPal to the seller. Whether it's PayPal or eBay (Adyen) processing your payments: One payment from a buyer to you counts as one transaction.

docstill299n · ‎08-27-2021

OK. Clarified now. Thanks for all the helpful replies. Health and Blessings to all.

duffy4444 · ‎08-27-2021

Reading between the lines of your OP, which is not that difficult, it sounds like you want to know under what circumstances evading income taxes on online sales can continue before a seller has no choice but to start paying.

Sellers must get into compliance pronto with the tax laws, that for decades have required sellers making a profit to report their income (and expenses) on their tax returns. Many of us online sellers have been doing that for years now, and it's about time that nearly all of the rest of the sellers will be joining us and leveling the playing field.

Sellers may also want to get with their accountant/CPA/tax professional to see if amended returns should be filed for years past when evading net online income taxes. There are generous expense deductions allowed, which makes a smaller income tax bite a lot easier to swallow.

Cheers, Duffy

dryophelia · ‎08-27-2021

D’oh Ophelia must spellcheck!!
acceptant should have been accountant

Sorry about that.

bearswatching · ‎08-27-2021

There is so much misunderstanding and misinformation in this thread I fear my mind may be permanently boggled. Lol 😂

bearswatching · ‎08-27-2021

Not directed to you personally, just wanted to talk to a sane person. 😂

mtgraves7984 · ‎08-27-2021

@dryophelia wrote:
D’oh Ophelia must spellcheck!!
acceptant should have been accountant
Sorry about that.

@dryophelia

I thought (in this particular instance), you might have been directing the OP to use his accelerant. 🤣

caldreamer · ‎08-27-2021

That is incorrect....these are all separate transactions (has nothing to do whether you sold item to the same person). Not sure whether "cancelled or refunded" transactions would be included in number of transactions (count).

All income must be reported to IRS and State even if you don't meet threshold for 1099. EBAY is collecting and sending "sales tax" to your State under your social security# (could trigger an audit if income reported incorrectly).

caldreamer · ‎08-27-2021

That is incorrect...every sale you make is consider a transaction (has nothing to do with bank deposit).

dbfolks166mt · ‎08-27-2021

It is not in eBay but following is the link to the Stimulus bill that changed the law.

https://www.congress.gov/bill/117th-congress/house-bill/1319/text#toc-HFC2BE0682A5E4F71B689C5F9A98A4...

To save you from wadding through the entire bill. The following pertains to the change.

SEC. 9674. MODIFICATION OF EXCEPTIONS FOR REPORTING OF THIRD PARTY NETWORK TRANSACTIONS.

(a) In General. - Section 6050W(e) of the Internal Revenue Code of 1986 is amended to read as follows:

“(e) De Minimis Exception For Third Party Settlement Organizations.—A third party settlement organization shall not be required to report any information under subsection (a) with respect to third party network transactions of any participating payee if the amount which would otherwise be reported under subsection (a)(2) with respect to such transactions does not exceed $600.”.

(b) Clarification That Reporting Is Not Required On Transactions Which Are Not For Goods Or Services.—Section 6050W(c)(3) of such Code is amended by inserting “described in subsection (d)(3)(A)(iii)” after “any transaction”.

(c) Effective Date.—

(1) IN GENERAL.—The amendment made by subsection (a) shall apply to returns for calendar years beginning after December 31, 2021.

(2) CLARIFICATION.—The amendment made by subsection (b) shall apply to transactions after the date of the enactment of this Act.

shado-x · ‎08-27-2021

To save you from wadding through the entire bill. The following pertains to the change, "[a] third party settlement organization shall not be required to report any information under subsection (a)".

That statute's amendment (not a change) doesn't mean a [third party] company won't issue a 1099, they just do not have to. Amazon files 1099's on self-published book royalties way below $600.00. Just report all your income and don't skirt around tax requirements.

a_c_green · ‎08-27-2021

@docstill299n wrote:
However, I seem to recall that repeated sales to the same Buyer only count as a single transaction. Is that true?

The only eBay context I can think of that involves counting separate transactions as one is for feedback, where all transactions from the same buyer within a 7-day period are counted as one feedback rating for DSR calculation, or percentage, something like that...

I also suspect (although I have not checked so I might be wrong on this) that the threshold for reporting is not [a certain dollar amount AND a certain number of transactions], but [a certain dollar amount OR a certain number of transactions]. Exceed either and you're in.

As for the dollar threshold, I thought it was getting lowered to $600, wasn't it? Sell more than that and you'll receive a 1099-K of your gross receipts.

nobody*s_perfect · ‎08-27-2021

@a_c_green wrote:...
I also suspect (although I have not checked so I might be wrong on this) that the threshold for reporting is not [a certain dollar amount AND a certain number of transactions], but [a certain dollar amount OR a certain number of transactions]. Exceed either and you're in.

As for the dollar threshold, I thought it was getting lowered to $600, wasn't it? Sell more than that and you'll receive a 1099-K of your gross receipts.

It's $20K AND 200 transactions, which is easy to check. Even the OP knows this.

The $600 threshold is already in place in several states. But at the federal level it will begin to apply in 2022.