eBay

coastaltechsolution · ‎03-11-2021

Looks like the law will change on the Federal level that next year (Jan 2022) $600 is the 1099 limit

No biggie to me as I report all income but get ready for the influx of postings coming

congress.gov/bill/117th-congress/house-bill/1319

wills_thrill · ‎03-11-2021

Sounds like you're an offended Democrat, now that they raised taxes on the middle class. Of course this is a tax hike on the middle class.

1) If you sell $600 a year of used items from your house that have devalued since they were new, you are not a "tax evader". Even the IRS website says you should not report that income, but now you will have to because of the 1099, or face legal peril.

Or pay more to have your taxes prepared to avoid the tax you shouldn't have to pay. Either way, it means less money for you, that should be yours. Or at the very least, you have to spend more of your valuable time (which is money) to keep what is rightfully yours, by law.

2) It is a moronic statement to call people's used items "junk", or to declare people should re-evaluate how they live. How people live is none of your business. This is America, and you can live with as much excess as you chose, and can afford. Your Socialist flag is showing.

If I buy a new riding lawnmower and sell my used one on the internet, I probably already hit the $600 threshold with that old "junk". I don't remember ever holding a yard sale that didn't have $500 in GROSS sales. I wouldn't bother with it if it didn't. GROSS is what your 1099 will be reported on, not net.

3) If you already paid taxes on the item when you bought it, and you sell it for less than you bought it for. There should be no taxes to pay, and you shouldn't have to jump through hoops or pay accountants to keep what is lawfully yours. It doesn't matter if it was a $5 board game, a $20 toaster or a $50,000 car.

This is simply a cash grab from the middle class by Democrats, no matter how you want to put lipstick on that pig.

wills_thrill · ‎03-11-2021

Every American took on $14,000 in debt today, and got a $1400 check in return. And everyone is patting themselves on the back like something good happened.

And if you are one of those that say it doesn't matter, because you'll be dead before it has to be paid off, then that means two parents with a single child that has that attitude just gave their child $42,000 in debt to payoff, for a quick fix of $4,200 today.

Sounds like the behavior of a drug junkie doesn't it? Yet some politicians act like its a good thing that happened.

jayjaspersgarage · ‎03-11-2021

"Some small sellers will probably just stop selling on ebay. The effort at tax time may not be worth the trouble. "

If low volume sellers take the time all year to drop expense receipts in a file and keep a driving log on one of the phone apps available for expensing the driving the one or two entries for ebay sales won't take any longer than entering the donations to charitable causes.

The people who have established jobs with annual expenses to write off shouldn't blink over this minor change. I might have sold $2,400 in gross sales last year on this account. Even without anything to write off against it my tax exposure at 11% isn't much compared to my regular vocation and three other sources of income. The extra tax is just $264 after the math is done.

Bottom line is that if you itemize deductions already selling on-line is still more rewarding than not being here. I think many people just don't fully understand what it takes to run the machine now that society has grown to its current size.

yawe_1956 · ‎03-11-2021

No, I don't think this is a slap in the face.

A slap in my face is all the sellers who have never paid taxes.

They are able to undercut my prices, they clog up the lines at the USPS because they can. They act like they're running a business and how dare I say otherwise, these people have no respect for those of us jumping through the hoops.
There's more, but make them do what I've been doing all these years is certainly a good start.

wills_thrill · ‎03-11-2021

I think that you miss that paying this tax will never be more than the honor system. And it does disenfranchise the casual seller, despite your disdain for tax evaders.

Simply put, the same people who evade taxes today, will still evade it with $600 1099's and there isn't anything you can do about that, because it is still ultimately the honor system.

Around my area, most auctioneers write what you win on a paper slip. You can buy those blank paper slips on Amazon. You can go to an auction and pay $5 for something. Come home and fill out a new paper slip by hand that says you paid $50, and put that in your records. Sell the item for $60 and you can probably show a loss one way instead of a gain the other.

Or buy something at a yard sale and make any receipt you want.

Or record fake mileage saying you go to a Peddlar's Mall every day at 100 miles roundtrip @ $.51 a mile. But you really only go once a week. Offset any gains by $300 a week.

And on and on and on... They can avoid taxes today with one lie, and maybe next year it takes two.

You aren't really going to have any impact on that subset of sellers. But you will have a negative impact on a larger subset of casual sellers. If someone buys a Rolex for $5000 and later decides to sell it for $5000, but insured shipping was $180 and you paid $500 in sellers fees, then you lost money.

In the past you kept no records, and just didn't report any income, per the IRS guidelines. In the future, a 1099 is submitted. You must keep the records of the transaction, fees, etc. Then you must fill out at least two additional forms on your taxes, or pay additional money for someone to review your records and prepare it for you.

Your RIGHT to not pay tax on that transaction is the same after the new law, as it was before the new law. It's just that the law put greater burden on the seller.

The government should be in the job of removing burdens, not adding to them.

theteamsetguy · ‎03-12-2021

They will need a lot of people to create the programs used for the AI and robots. They will need a lot of people fix the robots. Most software engineers make at least $100k per year.

ptrainermel · ‎03-12-2021

I am so glad we got out in front of this many years ago. We have had our CPA handle this from day one. She was able to show us from day 1 that with good records of money spent on inventory, expenses, mileage records, etc. that there were plenty of LEGAL avenues to offset the money we took in on eBay. When you have someone that knows what they are doing and knows the ins and outs of filing your business taxes it's really not that big of a deal. We do very well on our 4 selling accounts...and when all is said and done the money we owe is peanuts. A CPA that knows what they are doing and is familiar with the legal ins and outs and what can be offset has been worth every penny to us. I think now we pay somewhere around $300 for our itemized business tax return and she is worth every penny.

To all those folks who were trying to fly under the radar under the old system of staying under $20k in sales + 200 transactions are in for a rude awakening.

farmalljr · ‎03-12-2021

1 The IRS says you have to report EVERY dollar of income. While there IS a threshold to taxation of that money, it certainly NEVER was 20K, but actually much lower.

2 What is dumb is thinking we need all the JUNK we buy. I have no problem if someone wants to have piles of useless stuff laying around. It's their money, not mine. But the way people spend money is an indicator of the "grip" on reality, they don't have. People buy stuff to make themselves "happy" and that doesn't work. Many people have storage units to store all the "happiness" they bought and have no use for. Many people buy stuff rent to own for 29.99 a week for the rest of their lives, because they are financially IGNORANT. The average person could not cut a one thousand dollar check, three seconds after they are paid. People are broke, because they are financially illiterate. So yes, that stuff is JUNK because they don't really need it, they just wanted it for a minute.

3 Sales tax has always worked like this. Goodwill charges sales tax, despite everything being used and donated. Used cars have always been charged sales tax. Your complaint is moot.

This is simply closing the loophole on small business (which this IS) and making seller report income. If not, they risk jail time and fines for evading taxes. This is about following the law. If you don't agree with it, you are free to get the law changed. I don't like paying taxes anymore than the next person, but I DO IT because its the law.

I'm FAR from a "socialist" and not an anarchist putz either. We are a nation of laws, and we need laws to keep order.

farmalljr · ‎03-12-2021

Short version of your post:

People operating AS A BUSINESS, are now going to HAVE to act like a business. Oh the inhumanity of it all! I will schedule a time to weep for them. Lol.

They are just as free to skip out on paying taxes, and the IRS is still free to flag their taxes and rake them over the coals. Good luck to them.

ptrainermel · ‎03-12-2021

What is the current 1099 amount that is being dropped down to the $600 in 2022? I honestly don't pay attention to it being we have a CPA handle our itemized business tax filing.... The last I remember dealing with Paypal was you had to be over $20,000 in total sales AND over 200 transactions on ebay to get a 1099....NOT either or BUT BOTH in the same tax year. Which meant as long as you stayed under $20k in total sales or under 200 total eBay transactions you never got a 1099 from Paypal.

wills_thrill · ‎03-12-2021

WRONG! Cleaning out your garage is not operating as a business.

Are sellers on E-Bay really this dense? Or just that jealous, vindictive and petty?

Maybe you should educate yourself:
https://www.irs.gov/pub/irs-news/fs-07-23.pdf

"A person must report a gain from a sale whether he or she operates a business or not.
A reportable gain is the income above the original cost or basis of the item."

Therefore, anyone selling items at a price below their original cost basis is A) not considered a business per the IRS and B) have no gains (you are wrongly calling the gross revenue "income") required to be reported.

Yet now these folks will have a 1099 filed against them. They will be forced to keep records like a business, when it previously was not required. Also, as an individual, YOU MAY NOT BE ABLE TO DEDUCT EXPENSES LIKE SHIPPING OR FEES.

They tax code states that individuals must itemize all deductions as part of Schedule A. This means that if you don't exceed the standard deduction, you technically won't be able to deduct shipping or fees from any sale. It is not an item by item deduction for an individual, but an annual aggregated deduction as a whole. As an individual, only the cost of the item can directly be deducted from the total sale price, which includes item price, taxes, and shipping.

There are also PLENTY of other unforeseen consequences. Say you share an apartment with a roommate and you do sell on E-Bay as a part time business. You make $300 a month doing it and you transfer that from your Paypal account as Friend and Family to your roommate to cover your share of the rent. You get a 1099K and report everything honestly as you should.

Guess what, your roommate is now going to have a 1099 filed on them for the friends and family transfers. And how exactly are they supposed to explain that on their 1040? Does splitting an apartment with someone now constitute a "business"? Or does this new Democrat tax code just burden people?

Again, to anyone with eyes and a brain, this is a Democrat cash grab out of the pockets of the lower and middle class. Hedge fund millionaires aren't cleaning out their garages and closets to sell online.

And I guess some people are so clueless they think it would be impossible to sell $600 worth of stuff lying around your house, when that $600 also includes the price of the item, sales taxes automatically charged, and cost of shipping. That would just be 40 $5 items shipped priority mail. Less than one inexpensive item per week.

wills_thrill · ‎03-12-2021

1). Yes, but you clearly don't know what income is, despite spouting off about it.

2). Sounds like you lead a miserable life where you have been crippled by your jealousy of others. Again, it is no individuals place to judge what another person decides to own. You can also not judge whether it makes them happy or not.

Your whole word salad is just a peek into the defects of your own psyche, that probably no one cares to see.

3). Nobody said anything about state sales tax. State sales tax is not federal income tax. And the reason Goodwill pays Federal income tax (or do they if they are a charity?), is because the original cost of their merchandise is $0. They sell it for $10. That measn $10 is a GAIN, and you are required to pay taxes on the GAIN.

If I bought a blender of $30 and sold it for $10. As a non-business individual, my GAIN is $0. And what I should report to the IRS is $0. But now with $600 1099's, that $10 blender sale will now probably be reported to the IRS as $22 ($10 item + $10 shipping + $2 taxes) and the individual will have to keep those records, and may still have to pay tax on the $10 shipping, because they must lump the shipping expense onto schedule A, and if they don't meet the standard deduction, they can't even deduct the cost of shipping and it gets taxed as income!

Cash grab from the middle and lower classes...

If you want to address fraud and businesses not reporting income, then find a way to do it that doesn't burden the non-business seller.

mdes162nj · ‎03-12-2021

I think a lot of small sellers may not realize that they will also be responsible for quarterly estimated taxes and Self-Employment tax as well as the bookkeeping involved in calculating costs, expenses and deductions. I believe Hobbyists have a different set of rules but I'm not famliar with them or how it's determined if you're a hobbyist.

farmalljr · ‎03-12-2021

Speaking of word salads......

You act like you are educated in regards to the IRS codes, and think you are a lawyer. I can tell from your drivel, you are neither. Offering your opinion as fact is unwise. You know not what you are talking about. You are merely bloviating.

Let me clue you in, I own a business. I am full time self employed. I have an accountant. I speak from real world experience, not as a couch potato critic. I am not giving opinion, I am giving facts. You can disagree with me as much as you want, I don't care. Your disagreement does not change the facts. I know what I am talking about because I am experienced in business, and what you can deduct and how. I already know how to run a business legitimately. I already am keeping records. I run my business PROPERLY. Just because others have not and the government has now clued into all the tax money people have been avoiding, well, sucks to be them.

Running a business requires keeping accurate records. If you want the government intrusion OUT of your sales, then have a yard sale (so long as your locality does not require permits and reporting of sales). Platforms like C-list exist for people like you who don't want to be bothered with conducting their business LIKE a business. If you want to use these online platforms, like it or not you will follow the rules or you will face consequences. What you do, doesn't matter to me because YOU will suffer the consequences. I don't give pity either, when someone gets pinched for playing the fool.

What is ultra clear, is you dislike the democrats and the progressive agenda. Me too. Having a hissy fit about it doesn't change anything. The rules are the rules. Either learn how to operate within them, or be a sad sack throwing a tantrum. Selling boils down to making money. Focus on that, rather than focus on the politics is what makes your bank account grow (if you do everything right). Complaining about politics gets you no where.

If it's just too difficult to make money here, then quit and find something else to do with your time that is profitable. For now, following the rules is part of the game. Like it or not.

yawe_1956 · ‎03-12-2021

@wills_thrill wrote:
I think that you miss that paying this tax will never be more than the honor system. And it does disenfranchise the casual seller, despite your disdain for tax evaders.

Simply put, the same people who evade taxes today, will still evade it with $600 1099's and there isn't anything you can do about that, because it is still ultimately the honor system.

Around my area, most auctioneers write what you win on a paper slip. You can buy those blank paper slips on Amazon. You can go to an auction and pay $5 for something. Come home and fill out a new paper slip by hand that says you paid $50, and put that in your records. Sell the item for $60 and you can probably show a loss one way instead of a gain the other.

Or buy something at a yard sale and make any receipt you want.

Or record fake mileage saying you go to a Peddlar's Mall every day at 100 miles roundtrip @ $.51 a mile. But you really only go once a week. Offset any gains by $300 a week.

And on and on and on... They can avoid taxes today with one lie, and maybe next year it takes two.
You aren't really going to have any impact on that subset of sellers. But you will have a negative impact on a larger subset of casual sellers. If someone buys a Rolex for $5000 and later decides to sell it for $5000, but insured shipping was $180 and you paid $500 in sellers fees, then you lost money.

In the past you kept no records, and just didn't report any income, per the IRS guidelines. In the future, a 1099 is submitted. You must keep the records of the transaction, fees, etc. Then you must fill out at least two additional forms on your taxes, or pay additional money for someone to review your records and prepare it for you.

Wrong answer.
That involves actually doing the paperwork.
And putting the lie in black and white.
Big difference, the tax evasion before involved doing nothing at all.
Doing nothing is convenient, so yes I am sure there will still be tax evasion but one more time:
IT IS A STEP IN THE RIGHT DIRECTION!
That's all I'm saying, not sure where you come off with this draconian all-or-nothing stuff.

Also it's not "I" who is forcing these people to do what they're supposed to be doing.
You can go back to whatever it is you were doing before, didn't mean to interrupt you.