taxes

[finders456310]

how many sellers will leave ebay due to paying taxes on $600.00 worth of sales for one year.i will be one on dec 31st 2021 my last day.

[rebell45]

The income will still be reported to the IRS anyway.  eBay is just following the law.

[soh.maryl]

Uh, what you are looking at is an IRS rule, not an eBay rule.

Just wanted to make sure you know that.

[tdumonde2014]

83,463 +/-

[eleanor*rigby]

Receiving a 1099-K (as required by federal law) does not mean you have to pay taxes on $600 worth of sales. 

Give me strength. 🙏

[kensgiftshop]

@finders456310 

You should already be claiming your income on your taxes.

[maxine*j]

In the first place, it has always been your responsibility to report income to the IRS (and to the state you live in, if it is a state with an income tax).

In the second, income and taxable income are not the same things.  The income tax owed on $600 (or $6,000 or $60,000 or $600,000) can be anything from zero on up. 

Or do you not know that because you have never reported your income or filed an income tax return? 

=

[itsjustasprain]

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@finders456310 wrote:

how many sellers will leave ebay due to paying taxes on $600.00 worth of sales for one year. i will be one on dec 31st 2021 my last day.

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Few if any are going to quit over that. By the time you deduct your expenses for acquisition, postage, packaging, gas mileage to post office, ect., your actual income from $600 worth of sales is really going to be - what - half of that, maybe? And since when did $300 of net income shove you into the next tax bracket? 

You are not going to notice any difference to your final tax bill from $600 worth of sales on Ebay. Just carry on.

[shado-x]

how many sellers will leave ebay due to paying taxes on $600.00 worth of sales for one year.i will be one on dec 31st 2021 my last day.

It's hard to believe a seller threatening to leave because of making "too much money".....lol

[redmodelt]

Not they are threatening to leave because the now will have to do what many of us already have been doing, including us that sell under the 600 level. Actually eBay should have been providing that form all along to Oregon sellers (there are other states too), ours is and has been at the 600 level for a long time.

[theteamsetguy]

Whether a seller receives a 1099 is irrelevant on whether you should report your sales on your taxes. The 1099 will have your gross income which is not the same as taxable income. I would suggest you consult a tax professional and not rely on my or any one else on this board for that matter. In most cases you should be able to deduct your COGS, Ebay fees, shipping fees, mileage driving to buy your items or to the post office, Paypal fees, and ect. Actually after deducting expenses you might even show a loss and depending on how you file which would actually reduce your taxes owned.

[katzrul15]

They are not "reporting" $600 of your sales.  If your sales, in a 12 month period exceed $600, e-Bay will send a 1099-k to the IRS for the TOTAL amount of your sales.  Whatever the amount is.  And yes, it will include sales tax and shipping and the item price, as your GROSS Sales on the site.

The IRS has always mandated that all revenue be accounted for, regardless of how you generated the revenue or where.  This oddly, included all online sales.  If you did not receive a 1099-k previously and yet sold here, a Seller might be in for a really rude awakening if the revenue was not reported.  Especially, if your feedback on here shows that you were a Seller previously.  And of course, if e-Bay is asked, they will provide any documentation requested of them.

We started selling in 2004 online.  Since 2005 tax filings, we have paid federal taxes and state and local income taxes relative to same.  Some how "casual" or "hobby" sellers never seemed to think the rules applied evidently based on all the posts on these boards.

How many will leave?  Could not care - as a Seller who has paid taxes, I am delighted that it will suddenly and abruptly be an even playing field on here.  

[7606dennis]

Actually, all income from sales on eBay is subject to income tax and is suppose to be reported whether or not it exceeds $600 and you're sent a 1099.

[duffy4444]

   Actually, a lot of sellers will probably leave eBay over the new lower $600 threshold for a 1099-K.

   However, as some other posters here have reminded sellers like yourself, you should have always been reporting online sales on your tax return, when you have been using the venue in a fashion that makes money (including thinking it is merely a "hobby").

   A lot of sellers, like myself, have always reported and paid taxes on our online sales income (which is required by law), and the final tax on our online sales was not that great after taking generous expense deductions. A lot of us are glad to see that the playing field is going to include nearly everyone now, who have been getting away with skipping out on reporting this income for years. Those sellers get no sympathy from other sellers like me... welcome to the club!!

Cheers, Duffy

[dbfolks166mt]

     This is a complicated subject and for a lot of us nothing new. Following is a simplified/condensed version. First and foremost you are NOT paying taxes on $600 worth of sales because of the new federal law. Lots of sellers who's states have had similar laws in place for quite sometime have been receiving 1099's for while. Even before the 1099 issuance taxable income should have always been reported. What the new federal law requires is that every third party financial processor who processes more than $600 in transactions for an individual, or business, over a calendar year to be issued a 1099 which shows the gross amount of the financial transactions. 

     Similar to the gross income on your W-2 this is NOT what you pay taxes on. What comes off of the gross figure is all the expenses: fee's, shipping, packing supplies/materials, mileage to and from the post office or other shippers, operating expenses like computers, software, printers, Cost of Goods Sold, bad debt expenses (scam losses/refunds), etc. Sorry you don't get to take off the sales tax since eBay is collecting that and remitting it that is their write-off. This will give you a net income/loss which is what you pay taxes on or get a tax credit for. 

     It is complex to determine whether you are running a for profit business or you are doing this as a hobby or simply downsizing and/or disposing of stuff you no longer want or need. You will need to figure out whether you file a schedule C or report this as misc. income. I won't go into that but you can read the IRS publications that cover determining which category you fall into. 

     Ending your eBay activity may or may not keep you from getting 1099's. If you receive funds from any third party financial provider: PayPal, Venmo, Due, Stripe, Google Pay,  etc. you will continue to receive 1099's from those entities. This year I look forward to receiving 1099's from eBay, Venmo, 2 PayPal accounts and several other third party providers. 

     The only ones who really benefitted from the new law(s) are/were the tax prep companies and accountants. While the government's intent was to tighten the reigns on unreported income this may ultimately cost more to implement and manage than it produces in increased tax revenue given the smaller amounts of taxable income being reported. Take for example somebody who receives a 1099 for $10,000.00 in gross transactions. The subtract COGS, fees, shipping......... and they have a net taxable income of $3,000.00. Depending on what tax bracket you fall into you are talking a maximum of just a little over $1,000.00 in additional taxes. How much effort would/will the government expend in generating computer code, handling audit cases, added people, office space, people benefits............. to gain that additional $1,000.00 in additional tax revenue.