tax

[della5189]

600 limit. I think Ebay will be losing a lot of sellers, including ME !

[wisteriahill]

I thought it started 2022

[nocoolnamejane]

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@della5189 wrote:

I am retired and don't make enought to file taxes.  This might put me over the limit. That is why  20K was better then 600  .

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You still had to report your income before, the only thing that changed is that eBay is now required to also report your receipts to the IRS…

[laststopgeneralstore]

Don't blame eBay, blame the government. Also, good luck & don't forget to end your listings! Seriously though, why do you care? Sell more.... make more... Why wouldn't you want to strive to make as much money as you possibly can? Just because you have to pay taxes? That's extremely lazy and a really stupid reason if you ask me. I strive to pay more taxes every single year because that means I've made more money & more profit than the year prior.

[nocoolnamejane]

Also, haven’t you received over $600 already (the figure on the 1099 includes item AND shipping and handling amount received). I quickly added up your sales since May and that was nearing $400, s/h excluded.

[mam98031]

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@della5189 wrote:

I am retired and don't make enought to file taxes.  This might put me over the limit. That is why  20K was better then 600  .

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@della5189 

This is a mistake that way too many people make.  The minimum threshold on a FORM such as the 1099K does NOT set them minimum requirement for IRS to report your income.  It is simply a FORM and nothing more.

When the minimum threshold for a 1099K was at 20K, sellers that sold an amount below that threshold for the FORM were still responsible for reporting there income.  It wasn't a magic form that suddenly gave anyone permission to earn up to $19,999 tax free.

I'm retired too.  I still report all my income to the IRS every year.

So don't make the mistake that others have.  This form does not and has not ever set them minimum threshold for reporting your income.  IRS does NOT have a minimum threshold for that.

[mam98031]

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@wisteriahill wrote:

I thought it started 2022

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@wisteriahill 

You are correct.  It does start this year.  This year's 1099K will be issued in late January 2023 for all those affected.

[mam98031]

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@nocoolnamejane wrote:

Also, haven’t you received over $600 already (the figure on the 1099 includes item AND shipping and handling amount received). I quickly added up your sales since May and that was nearing $400, s/h excluded.

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Just to add to this @nocoolnamejane and @della5189 .  The 1099K reports ALL funds that come into your MP account BEFORE any deductions for fees, refunds or shipping.  You will have the opportunity to deduct those expenses on your income tax forms so you will only pay income taxes on your net income [after costs / deductions].

[nocoolnamejane]

Honestly, I do worry a lot of people are going to be in for a big bad surprise come tax season next year.

If it’s anything like in Canada, a lot of tax returns are checked with computer, with a program looking for anomalies and discrepancies, with random selection of returns looked over by a human.

But I do wonder if the new guidelines won’t trigger the IRS to check into all the people who will file a 1099K who had never done so before, since we know a lot of people either didn’t know they had to report all income even without the 1099, or who just decided to wing it and hope for the best.

That would be a LOT of audits…

[mam98031 · Accepted solution]

@nocoolnamejane 

Yes.  Come early next year the threads will be ablaze again on this subject.  And lots of people will be caught by surprise.  No matter how much this subject has been on the TV news, internet news, various marketplace communities etc, there will be lots of people that simply do not know.  And if you receive a 1099K you need to file a tax return that includes that information too.

Also even though it has been said more times than I can count that those selling just their personal items need to do their research NOW and learn the exceptions to having to claim your earnings as income, many don't.  The information is a bit hard to find, that is for sure, but too many casual sellers assume they will have to pay more taxes so they quite selling.  It simply isn't necessary and they are just cheating themselves out of a little money that they likely need.

As to audits.  Some will likely be well deserved.  I personally have chatted with several different sellers that intentionally kept their sales for a year's time just under the 20K threshold so they didn't have to pay taxes on the income.  They too thought that a threshold on a single FORM that IRS has somehow set the minimum threshold for ALL types of income and they didn't have to report it.  IRS has thousands of FORMS.  The minimum threshold on any one of those forms has never set the minimum threshold for reporting income.

[nocoolnamejane]

Is it that hard to find though?

I haven’t worked in the US since before the pandemic and I feel like a have a pretty good grasp of the issue. I also had no issues finding which states had lowered their treshold already and to what amount. 

I must admit, I find it all a bit puzzling 🤔 

[mam98031]

@nocoolnamejane 

It is hard to find.  I really haven't found a place where it is written in plain English and easy to understand.  If you have some links to share, please do.  I know I'd welcome them.

[della5189]

Thank you, I understand now.

[della5189]

Thank you.

[bearswatching]

I don’t understand why you think eBay is limiting you to $600 in sales. Where did you see this? As far as I know only new sellers have limits put on the dollar amount of their first listing (no million dollar mansions for your first listing! )This is confusing for newbies. 
 

[bearswatching]

Don, I think IRS agents are already dreading 2023! Hope they are being given lot of answers to the multitude of questions coming their way. There is too much speculation already being given regarding the “new” tax law. There is no “new” law.