threshold

[tktopgun]

what is the seller's threshold of selling before receiving a 1088 form?

[jameshen1]

What is a 1088 form?  Do you mean a 1099-K?

[monroe67]

"what is the seller's threshold of selling before receiving a 1088 form?"

Here's a cut-and-paste from taxact.com, a company that works with eBay on this 1099-K issue:

"Updated November 2023

If you sell items online, you’ve probably heard about new IRS reporting thresholds that were supposed to go into effect first in 2022, and then in tax year 2023. These threshold changes understandably caused much confusion for sellers  on eBay and other online marketplaces. As a result, the 1099-K threshold change has been postponed by the IRS once again, and the agency has announced a new threshold change set to go into effect in 2024.

To help keep sellers informed in the meantime, TaxAct and eBay have partnered to help you understand these tax changes and what they will mean for the tax returns you’ll file for the coming tax years.

Recap of the IRS reporting changes

For tax year 2023, eBay and other online payment platforms are only required to report transactions to the IRS once you hit an annual threshold of $20,000 in gross payments and at least 200 transactions. The IRS recently confirmed  these thresholds will remain in place for 2023.

Beginning Jan. 1, 2024, these thresholds will drop significantly. With the change, platforms like eBay must report payments totaling $5,000 or more in a calendar year, with no transaction minimum. This is part of a phase-in process by the IRS to eventually implement the $600 threshold originally brought about by the American Rescue Plan. As it stands, the threshold is expected to drop again to $600 for tax year 2025, unless the IRS makes more changes."

I've highlighted the last paragraph in green.  Without having checked any IRS website, I think this is the most current info available.  

Essentially, current laws/regulations for 1099-K reporting for 2024 are that eBay will send 1099-K forms to sellers whose gross payments are $5,000.00 and more, regardless of the number of sales transactions those sellers had.  

BUT !!!  In November of 2023, the IRS announced that the 2023 tax year's 1099-K limits would remain at $20,000 and 200 transactions.  
In 2022, the IRS made a similar announcement on December 23, giving programmers around the nation only eight days to fix their systems. 
Today is September 24, 2024.  So, it seems to me, at least in theory, the IRS has three more months in which they could, again, revise the 1099-K criteria for 2024.  

[kensgiftshop]

Don't know what a 1088 is, but a 1099 is $600.

All income is to be reported even if you don't receive a 1099.

[monroe67]

"Don't know what a 1088 is, but a 1099 is $600."

So -- this is the title of an IRS Announcement dated November 21, 2023, last year:

"IRS announces delay in Form 1099-K reporting threshold for third party platform payments in 2023; plans for a threshold of $5,000 for 2024 to phase in implementation"

(Emphasis added.)  And here are the first three paragraphs from that Announcement:

"IR-2023-221, Nov. 21, 2023

WASHINGTON — Following feedback from taxpayers, tax professionals and payment processors and to reduce taxpayer confusion, the Internal Revenue Service today released Notice 2023-74 PDF announcing a delay of the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023.

As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year. This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn't expect one and may not have a tax obligation. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.

Given the complexity of the new provision, the large number of individual taxpayers affected and the need for stakeholders to have certainty with enough lead time, the IRS is planning for a threshold of $5,000 for tax year 2024 as part of a phase-in to implement the $600 reporting threshold enacted under the American Rescue Plan (ARP)."

I have highlighted the currently planned  IRS threshold for 2024 for issuance of a 1099-K:  
                                                   $5,000.  Five Thousand Dollars.  I think that's pretty clear.  

eBay is one of many, many "third party settlement organizations", mentioned in the first paragraph.  
Thus, eBay is legally bound by these IRS regulations. 
The IRS, of course, is the legal authority for federal income taxation.  
Several of the 50 United States have lower dollar amount thresholds for 1099-K issuance (and taxation).  
So, even if you don't have gross sales of $5,000 on eBay, you still might receive a 1099-K because of your state's laws.  

[mam98031]

I see a lot of conflicting stories on the internet regarding the threshold for the 2024 1099Ks.  The page you quote above is the one I've always seen too and it clearly states that the IRS is PLANNING for the $5,000 threshold.  NOT that it has been approved, but they are PLANNING for it.

Now I'm seeing different sites reporting that the threshold IS $5,000 for the form this year.  But IRS site still says they are PLANNING for the 5k.

https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-...

[dbfolks166mt]

     There are multiple answers to your question. First it may depend on what state you live in there are a number of states have already set their own lower reporting thresholds you can find the individual state reporting thresholds at the following link. 

https://docs.stripe.com/connect/1099-K 

     At the federal level if the IRS or some other entity of the Federal Government does nothing before the end of the CY then the threshold or the 1099-K will be set at $600. However, the Federal Government has delayed the new threshold for the last two years and as others noted the IRS has a "plan" to set the limit at $5,000 for the 2024 tax year but who knows if that will really happen, if it will revert to the $600 limit or if they will delay it for another year and it will remain at $20,000.

[1nicebuy]

This question comes up a lot here it seems like.  If you are ever audited the IRS will require your bank statements and if you didn't not include even $1 of Ebay sales on your tax return, you will be forced to revise it.  My opinion is obviously the reason people are asking this question is they want to try to make money off Ebay and (illegally) avoid paying taxes on the profits.  I can't think of any other reasonable reason why this question would be asked.

Also keep in mind if the items you sold, cost you $4000 including shipping costs and you sold them for $5000 you are only going to have to pay taxes on $1000.

[mam98031]

The OP is in Ohio.  It does not appear that they require a 1099K, at least not yet.

So we are back to just one question.  What will be the 1099K minimum threshold per IRS for 2024?  Seems likely it will be $5,000, but I don't find anywhere that the IRS has confirmed this  yet.

[mam98031]

---

@1nicebuy wrote:

This question comes up a lot here it seems like.  If you are ever audited the IRS will require your bank statements and if you didn't not include even $1 of Ebay sales on your tax return, you will be forced to revise it.  My opinion is obviously the reason people are asking this question is they want to try to make money off Ebay and (illegally) avoid paying taxes on the profits.  I can't think of any other reasonable reason why this question would be asked.

Also keep in mind if the items you sold, cost you $4000 including shipping costs and you sold them for $5000 you are only going to have to pay taxes on $1000.

---

IMHO the reason this question is asked so much is because some believe [although incorrectly] that if they fall under the 1099K threshold, they don't have to report their internet sales income.

I highlighted a couple most popular INCORRECT myths that some sellers believe.  There of course are more.

1099-K facts vs myths

Myth: People will get a Form 1099-K from friends and family sending them personal payments.

Fact: Payments from friends and family should generally not be reported on a Form 1099-K. Form 1099-K reports payments for goods or services and should not report personal payments like rent, dinner, travel and other gifts or reimbursements gifts, no matter the amount. Generally, in payment apps, the default is personal payments unless the sender designates that they’re purchasing goods or services, or it is designated a business account.

Myth: If taxpayers didn't receive a Form 1099-K, they don't have to report income.

Fact: According to federal law, all income is taxable unless it is specifically excluded by tax law. Taxpayers should report any profits from selling goods or services, regardless of if they receive a Form 1099-K.

Myth: Individuals won’t get a Form 1099-K if they sold goods or services under the $20,000 and 200 transactions payment threshold set for 2023 and previous tax years.

Fact: The 2023 federal reporting threshold of over $20,000 and 200 transactions is a reporting requirement, but companies may still send a Form 1099-K for goods or services payments that are less than that amount. Payment apps and marketplaces that have held backup withholding for a payee during calendar year 2023 must file a Form 945 and a Form 1099-K. Also, their state may have a lower reporting threshold, which could result in receiving a Form 1099-K, even if the total gross payments they received in the year did not exceed the federal reporting threshold.

Myth: Taxpayers owe taxes on the gross amount reported on the Form 1099-K.

Fact: The form provides the gross, or total amount of payments individuals got per app or marketplace. Just because a payment is reported on a Form 1099-K does not mean it is taxable. Taxpayers will need to use the form and other records to determine their actual tax liability when they file their tax return.

More information is available to help determine an individual’s tax obligations at IRS.gov What to do with Form 1099-K.

Myth: People can only get a 1099-K if they’re running a business.

Fact: People may receive a Form 1099-K from payment apps or online marketplaces they used to sell goods or services, or accepted payments from a bank card. See Form 1099-K FAQs on Fact Sheet 2024-03 PDF for more information.

Myth: People don’t need to do anything with their Form 1099-K.

Fact: Individuals should use the information on the Form 1099-K with their other tax records to determine their correct tax owed. See Understanding your Form 1099-K and visit the Form 1099-K frequently asked questions for more information.

Someone who receives a Form 1099-K when they shouldn't have should take these steps.

Myth: There’s nothing available to help individuals understand their Form 1099-K.

Fact: The IRS has a variety of sources to help people understand their form and report their taxes accurately. See IRS.gov Understanding your Form 1099-K, What to do with Form 1099-K and Form 1099-K frequently asked questions.

https://www.irs.gov/newsroom/irs-never-mind-the-myths-know-the-facts-about-receiving-a-form-1099-k-i...

Or

https://www.irs.gov/pub/taxpros/fs-2023-06.pdf

[dbfolks166mt]

The OP is in Ohio.  It does not appear that they require a 1099K, at least not yet. The Ohio state government still has plenty of time to set their own threshold and make it retroactive back to 1/1/2024. Virginia changed their threshold in July but made it retroactive. 

So we are back to just one question.  What will be the 1099K minimum threshold per IRS for 2024?  Seems likely it will be $5,000, but I don't find anywhere that the IRS has confirmed this  yet.

     I am guessing it will remain at $20,000 or it will be $600. To get is set to $5,000 would actually require changing the original law. Given we are in an election year, we don't yet have a federal budget for 2025 and are on the verge of a shutdown I doubt Congress could get an amendment to the current law through along with getting Biden to sign off on it. 

     The Federal Government ineptitude is the reason it has remained at $20,000 for the last two years. The change was supposed to take effect for the 2022 tax year. 

[kensgiftshop]

---

@monroe67 wrote:

"Don't know what a 1088 is, but a 1099 is $600."

So -- this is the title of an IRS Announcement dated November 21, 2023, last year:

"IRS announces delay in Form 1099-K reporting threshold for third party platform payments in 2023; plans for a threshold of $5,000 for 2024 to phase in implementation"

(Emphasis added.)  And here are the first three paragraphs from that Announcement:

"IR-2023-221, Nov. 21, 2023

WASHINGTON — Following feedback from taxpayers, tax professionals and payment processors and to reduce taxpayer confusion, the Internal Revenue Service today released Notice 2023-74 PDF announcing a delay of the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023.

As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year. This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn't expect one and may not have a tax obligation. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.

Given the complexity of the new provision, the large number of individual taxpayers affected and the need for stakeholders to have certainty with enough lead time, the IRS is planning for a threshold of $5,000 for tax year 2024 as part of a phase-in to implement the $600 reporting threshold enacted under the American Rescue Plan (ARP)."

I have highlighted the currently planned  IRS threshold for 2024 for issuance of a 1099-K:  
                                                   $5,000.  Five Thousand Dollars.  I think that's pretty clear.  

eBay is one of many, many "third party settlement organizations", mentioned in the first paragraph.  
Thus, eBay is legally bound by these IRS regulations. 
The IRS, of course, is the legal authority for federal income taxation.  
Several of the 50 United States have lower dollar amount thresholds for 1099-K issuance (and taxation).  
So, even if you don't have gross sales of $5,000 on eBay, you still might receive a 1099-K because of your state's laws.  

---

Planning, but have they done it?

Myself, I think one should be sent for any amount earned.

[mam98031]

---

@dbfolks166mt wrote:

The OP is in Ohio.  It does not appear that they require a 1099K, at least not yet. The Ohio state government still has plenty of time to set their own threshold and make it retroactive back to 1/1/2024. Virginia changed their threshold in July but made it retroactive. 

So we are back to just one question.  What will be the 1099K minimum threshold per IRS for 2024?  Seems likely it will be $5,000, but I don't find anywhere that the IRS has confirmed this  yet.

     I am guessing it will remain at $20,000 or it will be $600. To get is set to $5,000 would actually require changing the original law. Given we are in an election year, we don't yet have a federal budget for 2025 and are on the verge of a shutdown I doubt Congress could get an amendment to the current law through along with getting Biden to sign off on it. 

     The Federal Government ineptitude is the reason it has remained at $20,000 for the last two years. The change was supposed to take effect for the 2022 tax year. 

---

OK, I didn't say Ohio will never have one.  Not sure of your point.  IMHO it doesn't matter right now.

IDK, you are guessing as you stated.  Guess we will wait and see.

[dbfolks166mt]

@dbfolks166mt wrote:

The OP is in Ohio.  It does not appear that they require a 1099K, at least not yet. The Ohio state government still has plenty of time to set their own threshold and make it retroactive back to 1/1/2024. Virginia changed their threshold in July but made it retroactive. 

So we are back to just one question.  What will be the 1099K minimum threshold per IRS for 2024?  Seems likely it will be $5,000, but I don't find anywhere that the IRS has confirmed this  yet.

     I am guessing it will remain at $20,000 or it will be $600. To get is set to $5,000 would actually require changing the original law. Given we are in an election year, we don't yet have a federal budget for 2025 and are on the verge of a shutdown I doubt Congress could get an amendment to the current law through along with getting Biden to sign off on it. 

     The Federal Government ineptitude is the reason it has remained at $20,000 for the last two years. The change was supposed to take effect for the 2022 tax year. 

OK, I didn't say Ohio will never have one.  Not sure of your point.  IMHO it doesn't matter right now.

     My point was while Ohio doesn't have their own 1099-K threshold at the moment they could potentially pass legislation at the state level before the end of the CY that makes a new threshold retroactive. This is what caught a LOT of Virginia sellers by surprise when Virginia passed legislation in July and made it retroactive. One day the threshold was $20,000 and the next day it was $600. 

IDK, you are guessing as you stated.  Guess we will wait and see.

     The main point I was trying to make is unless the Government does something to change the original law to incorporate the $5,000 "plan" then for CY 2024 tax year they will either let the new $600 limit kick in or they will postpone it and it will remain at $20,000 like it has for the last 2 years under the delay. 

     Given the speed at which the government moves the odds of actually getting legislation through at the Federal level before the end of the year are minimal.