Will new 1099-K thresold of $600 include sales made in 2021?

[mdes162nj]

The new 1099 threshold of $600 on any amount of transactions in place of $20,000 and 200 transactions goes into effect the end of Dec 2021.  Does any one know if it will apply to transactions made in 2021?  Or will it apply to transactions starting in 2022? 

[sextons-sweet-deals]

have not yet heard of this.

I know the 1099-MISC fits that rule.

Businesses send Form 1099-MISC, Miscellaneous Income, if you earn more than $600 in freelance work or contract labor during the year. ... In other words, Form 1099-MISC reports income from a particular business, regardless of the form of payment

[yawe_1956]

That is very good news, I am sure glad I don't have to do all the paperwork just because my sales didn't quite exceed $20,000... Also it will finally and hopefully catch up with those sellers who in the past simply never declared their ebay sales as income, and unfortunately there are likely more than a few of those.

As to the OP's question... 
I would assume it applies to 2021 sales, however we may still have to track them just to be safe.

[wrong66]

Can you supply a link to this announcement?

[mdes162nj]

I first read of it in Ina Steiners Ecommerce Blog and then found a few more articles via Google

https://www.ecommercebytes.com/C/abblog/blog.pl?/pl/2021/3/1615153514.html

and then Politico

https://www.politico.com/news/2021/03/05/gig-workers-coronavirus-relief-bill-losers-473902

and there are a few others you can find via Google

[kensgiftshop]

---

@yawe_1956 wrote:

That is very good news, I am sure glad I don't have to do all the paperwork just because my sales didn't quite exceed $20,000...

---

You should be claiming any income, no matter how much it is.

[tealt]

@mdes162nj 

According to Ina's blog,  she thinks it would apply to income starting in 2022.

Here's a previous thread on this topic:

https://community.ebay.com/t5/Selling/COVID-Bill-has-new-regulations-for-selling-on-eBay-in-2022/m-p...

[badgerboy2022]

For the tax year 2022. So no for 2021 unless they change the bill.

[releasethekraken_1]

---

@kensgiftshop wrote:

---

@yawe_1956 wrote:

That is very good news, I am sure glad I don't have to do all the paperwork just because my sales didn't quite exceed $20,000...

---

You should be claiming any income, no matter how much it is.

---

The way I read that person's comment, they ARE reporting their income; it's just easier if they have a 1099k as a starting point. 

[chaoscraig5v7o]

If we are selling personal items at a depreciated loss, do we now have to prove our cost bases for every sale??

What if we don't have receipts? 

[thetimetunnel]

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

[twiggs55]

This is going to apply to sales over $600 in the year, so most everyone selling on eBay will get a 1099-K, which you will then have to pay a high percentage for taxes. Going to really hurt the little person. It also applies to Etsy and any other on-line sales you may have. Here's part of the article to applies to most of us:

Under current rules, individuals who sell goods or services via platforms like Uber, Ebay, Etsy and others that use third-party transaction networks (i.e., PayPal) generally only receive a tax form if they engage in at least 200 transactions worth an aggregate $20,000 or more. That form, called a 1099-K, also goes to the IRS.

Starting next year, the federal threshold for issuing the 1099-K will drop to $600 with no minimum transaction level, due to a provision in the recently enacted American Rescue Plan Act. (Some states already have lower minimums.)

This means that in early 2023, you could receive a 1099-K for online sales you make in 2022. And this would be the case whether you’re an occasional seller or are operating as a business, as long as you sold more than $600 worth on a single platform. It doesn’t necessarily mean you’d be taxed on the money, but you would need to account for it on your tax return.

[splank1224]

This new rule is ridiculous, and will probably cost the govt in paperwork/processing more than it will make, and discourage selling. I have thousands in debt, I get a little welfare, now if I make 600 in a year, I have to claim it, justify it, possibly not pay tax on it anyway, and risk messing up my welfare on money I may or may not make? If I post something, it may not sell at all, but Im supposed to guess? Maybe lowering the threshold from 20,000 to 10 or 5,000 might make sense, but 600$ is ridiculous. Another reply said it will start in 2022, but that is too soon also.

[releasethekraken_1]

---

@splank1224 wrote:

This new rule is ridiculous, and will probably cost the govt in paperwork/processing more than it will make, and discourage selling. I have thousands in debt, I get a little welfare, now if I make 600 in a year, I have to claim it, justify it, possibly not pay tax on it anyway, and risk messing up my welfare on money I may or may not make? If I post something, it may not sell at all, but Im supposed to guess? Maybe lowering the threshold from 20,000 to 10 or 5,000 might make sense, but 600$ is ridiculous. Another reply said it will start in 2022, but that is too soon also.

---

$20,000 was never a threshold for reporting; it was a threshold for receiving the 1099k. You were always supposed to report your income.

It's been estimated that every $1 invested in IRS staffing and resources would result in another $6 collected. In a normal (non-COVID) year, that could nearly wipe out the budget deficit.

[m60driver]

It is just so much easier to scare, intimidate, and tax the little guy who is already living on the financial margins rather than to tax the Trumps of the world.  As Donald's once fellow landlord Leona Helmsley once said:  "We don't pay taxes; only the little people pay taxes".

The good news for the small sellers like myself is that the 1099K requires filling out a Schedule C which allows you to deduct things like mileage, gas, Internet expenses, a home office deduction, and all supplies.  I doubt many small sellers will, in the end, owe much in taxes, but the bookkeeping will be a hassle.