mam98031 • Volunteer Community Member • Buyer/Seller since 1999
@lonebuck-books wrote:For anyone who sells as a business or to make a profit, this shouldn't be a problem as you should have been reporting your income all along. Where this new $600 threshold can hurt people are those who sell off some of their own belongings and don't have receipts to prove what they paid for them when they originally bought it. The IRS will consider the entire sales amount as profit and will tax them for it. If you are selling stuff that you already own and are just trying to get rid of to pay off some bills, you shouldn't have to worry about a 1099 or trying to prove to the IRS that you are just selling off some old junk you had in your basement. If you were taxed on the income used to buy the item in the first place, you shouldn't have to pay taxes again when you finally decide to sell it off years down the road.
IMO the $600 threshold is too low. I personally thought $20K was too high. Probably should be somewhere in the lower middle area, say $2500 or so. That way people selling for a profit will mostly get a 1099 but Joe Blow selling off junk in his basement won't.
That isn't accurate. There are protections in the IRS rules for these types of sellers. It doesn't mean they don't have to report the income but they will not likely owe any additional taxes because of them in many circumstances.
So what is important is for EVERYONE to make sure they keep good records of costs and expenses.
@dbfolks166mt wrote:I am not sure this burden will fall on eBay, more than likely it will fall on Adyen as the financial processor. I received multiple 1099's last year from PayPal and Venmo since I live in a state that already has a state law that lowered the threshold reporting in October of 2020 and made it retroactive. I received nothing from eBay. It's the third party financial processors that are legally obligated to provide the 1099's.
It will be interesting to see how this impacts foreign drop shippers that are located in foreign countries but using U.S. based accounts and shipping origination points.
Adyen does not deal directly with ANY Ebay sellers. Adyen is a vendor of Ebay's they hired to process the literal money. Ebay manages MP. It should be MP that issues 1099Ks.
@dbfolks166mt wrote:You are 100% correct this is just the first step in a long line of things to come. The inflations have already started, gas is up almost $1.00 per gallon in my state due in part to increased state tax along with the pipeline hack fiasco. Biden may be promising to only increase taxes on corporations and the rich but what do you think the companies are going to do with those increases just absorb them? No they are going to pass them along to the bottom line consumer so this is pretty much a shallow promise. Be interesting to see what the eBay fees do if they increase the corporate tax rate. Nothing is free in life you end up paying for it in some shape, form or fashion. If it appears to be free from the government you pay for it 10 times over.
So you want to blame the President for the Memorial Day fuel hike that has happened in every single year long before he became president. How does that work? We have always seen higher fuel prices during the summer. But you are right, the pipeline damage certainly would add to this normal price hike, at least in the short run.
@annadryl wrote:@dbfolks166mt Good point that it's actually Adyen. Many seem to be under the impression that ebay has set up their own payment processing wing and are somehow in bed with the IRS. Some are still with Paypal, but supposedly by 2022 everyone will be in MP.
@tools* wrote:
@dbfolks166mt wrote:Actually they worry little about the financial burden on corporations because they are smart enough to realize the corporations are just going to pass that cost along to the average consumer. What do you think a Big-Mac is going to cost if they raise the minimum wage to $15 an hour.
If a McDonald's worker can finally get close to earning a living wage, a Big Mac will cost whatever it should cost. The obese will still be able to get their 1400 calorie burger, perhaps for a dollar more.
OMG How completely RUDE that statement is! Not to mention INACCURATE to think that ONLY "obese" people eat at fast food restaurants.
@tazzylou wrote:To everyone who is responding that I am trying to avoid paying income tax. I am not a business. I am just a person that is selling used items that me and my family have accumulated over the last 40-50 years just like a lot of Ebay sellers are doing. Selling my items on Ebay is not fun, its alot of work. If the government changes the law from $20,000 down to $600, mostly everyone that sells on Ebay will get a 1099K and have to justify to the IRS why this is not income.
The important thing to remember is that how you define a "business" is not necessarily IRS's definition. But really IRS has no requirement that you must be a legally set up Business in order to pay taxes. They have what IRS calls Hobby Income that covers most everything that isn't a legally formed business.
There are rules and there are some protection for sellers such as yourself. But don't assume you are fine until you do the research or consult a CPA that is experienced with taxes and internet selling. Just because someone is a CPA does not give them experience in those areas that you would need.
https://www.irs.gov/newsroom/five-things-to-remember-about-hobby-income-and-expenses
https://www.antiquetrader.com/collecting-101/behind-gavel-hobby-become-business
@home2thesea wrote:OP, I know it's a pain in the butt to have to do the accounting, not the least of which is paying self-employment taxes, but think about this...every bit you can add to your social security account will help you get a higher SS check when you reach retirement age. Last year, I didn't even make enough on eBay to get a 1099, but I still filed my taxes on what I made. I use software to track my income and expenses every week and file at the end of the year. If you keep on it, it's really not that difficult when it comes time to do your income taxes. Took me about half an hour because everything was already tallied and entered in the appropriate self-employment forms.
And that is exactly what everyone should be doing. Thank you for your post.
@tools* wrote:
@mam98031 wrote:
@tools* wrote:
@dbfolks166mt wrote:Actually they worry little about the financial burden on corporations because they are smart enough to realize the corporations are just going to pass that cost along to the average consumer. What do you think a Big-Mac is going to cost if they raise the minimum wage to $15 an hour.
If a McDonald's worker can finally get close to earning a living wage, a Big Mac will cost whatever it should cost. The obese will still be able to get their 1400 calorie burger, perhaps for a dollar more.
OMG How completely RUDE that statement is! Not to mention INACCURATE to think that ONLY "obese" people eat at fast food restaurants.
I was talking about a Big Mac specifically. Its fat and caloric content is outrageous.
If that were to be true, which it isn't, that doesn't change how rude that statement was.
FYI Big Mac's have about 550 calories, not almost triple the value you stated.
@dbfolks166mt wrote:Adyen is actually the third party financial provider that is handling the movement of the funds no eBay. All my 1099's last year came from the financial service providers, PayPal for not only eBay sales but for other forums and from Venmo. I believe you will find the 1099 will come from Adyen and not eBay just as it came from PayPal prior to MP.
I do not think that is accurate. Ebay manages MP. But let me phone a friend that will know for certain as she has been in MP for a few years now.
Who issues the 1099K Adyen or Ebay?
