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New 1099-K tax reporting requirements

Solarstrike

Member

12-20-2021 12:45 PM

source:

New eBay 1099-K tax reporting requirements, PT. 1

"New eBay 1099-K tax reporting requirements​


We wanted to follow up with some additional information about how the new IRS tax reporting laws may affect you in 2022, and to let you know that this change requires us to collect Social Security numbers (SSN) or Individual Tax Identification (ITIN) Numbers from all sellers who sell over a certain threshold.

Starting on January 1, 2022, U.S. tax reporting requirements will require all online marketplaces and businesses like eBay which process payments, to issue a Form 1099-K to sellers who receive $600 or more in gross payments. Previously, only sellers with 200 or more transactions and at least $20,000 in annual sales received a Form 1099-K. The new requirements may impact the 2022 tax return that you will file in 2023.

What’s changing with the new requirement

Starting next month, when your 2022 sales reach $600, you will be asked to provide your full 9-digit Social Security number (SSN) or Individual Tax Identification Number (ITIN) before you can continue to sell on eBay. If you have not previously provided your full 9-digit SSN or ITIN, we’ll alert you in your account, and send you an email requesting this information when you reach the sales threshold.

What the IRS does and doesn’t tax

You should also know that many sales on eBay aren’t taxable, so even if you have $600 or more in sales and we issue you a 1099-K, you won’t necessarily be taxed on those sales because in most cases, you wouldn’t owe any taxes on something you sold for less than what you paid for it. For example, if you bought a bike for $1,000 last year, and then sold it on eBay today for $700, it’s unlikely that you would be subject to income tax because your sale price was less than the price you paid for the item. We encourage you to talk to a tax professional when reviewing your 1099-K to determine whether you have taxable income and how to report amounts listed on your 1099-K.

We’ll continue to keep you updated going into 2022. Look for emails and alerts from us that will help explain what’s changed, and what you may need to do next. In the meantime, you can learn more in our FAQ about Form 1099-K and how they affect you.

Thanks for being part of the eBay community.



The eBay Team"
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12-02-2021 09:21 AM

source
:
New 1099-K tax reporting requirements, PT.2



"We wanted to share an update about a change to federal tax reporting legislation that will impact people who sell on any online marketplace, including eBay.

Here’s what’s changed

As of January 2022, the IRS will now require all annual online sales over $600 to be reported using Form 1099-K. This requirement previously only applied to sellers with at least 200 transactions and over $20,000 in sales each year. This change will impact your 2022 sales and your 2023 tax filing; it will not apply to your 2021 sales and 2022 1099-K tax forms.

Here’s how this change will impact your 2022 taxes

Many sales on eBay aren’t taxable, so if your sales are over the $600 threshold it doesn’t necessarily mean you will be taxed on those sales. Only goods that are sold for a profit are considered taxable, so you won’t owe any taxes on something you sell for less than what you paid for it. For example, if you bought a bike for $1,000 a few years ago, and then sold it on eBay today for $700, that $700 you made generally would not be subject to income tax.

But you will now need to report these sales as part of your tax return and we’ll continue to share updates that will help you prepare for these changes.

Here’s what we’re doing

This change will impact millions of casual and small business sellers on eBay. It has raised concerns in our selling community and we’re working to bring these concerns to Congress. We believe this new legislation will cause confusion, over-reporting of non-taxable income, and privacy concerns for millions of Americans who are just trying to get by. We are continuing to highlight the undue impact this increase will have on small sellers on eBay, and are urging an increase to the reporting threshold.



Here are some of the issues we’re working to address in our conversations with Congress:

  • Overly complicated tax forms for smaller transactions.
  • Targets casual sellers who are not set up to handle this kind of tax reporting.
  • Doesn’t take into account the selling of used goods, which are rarely taxable income as they are sold at a price below the original purchase price.


Here’s what you can do

We invite you to join the conversation on eBay Main Street, where you can contact Congress on behalf of our community of sellers, small business owners, and entrepreneurs.


We will continue to keep you updated as this legislation evolves. Going into 2022, we’ll also share more detailed information that will help you understand what’s changed so you know what to expect in the upcoming tax year. We’ll keep you posted on how we will support you, and what steps you need to take. In the meantime, we want to remind you that this change will impact your 2022 sales and your 2023 tax filing; it will not apply to your 2021 sales and 2022 1099-K tax forms.


Thanks for being part of the eBay community."







Dog Tax GIF by Verohallinto
 
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eddie4

Genuinely Generous
Basically taxing you if you sell something more than you bought it for when it comes to reselling. Looking at you scalpers and thieves.
I assume you have to provide a receipt or some proof of purchase for it to not count as income tax? Otherwise, they consider it a gift and then it gets taxed?
I mean, how hard is it to create a fake receipt tho?

Meme Reaction GIF by MOODMAN
 
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Solarstrike

Member
Yesss YEEEESSSS, scalpers will weep.

Huge downside though if you sell collectibles. Onto alternate methods to sell those now!

I swear everyone always gets penalized due to a few f ups. No one wants to do the homework and figure out how to catch the aholes scalping. There should be a scalper tax. If a non business is selling more than one of the same item at extremely elevated cost, then they should be charged a "Scalpers Fee". Idk, something can be done instead of throwing everyone even those just trying to get by, into the same bracket.
 
Yesss YEEEESSSS, scalpers will weep.

Huge downside though if you sell collectibles. Onto alternate methods to sell those now!

Only if 3P Fanstoys Transformers products actually comes down to something reasonable then it can be seen as a miracle.
 

IntentionalPun

Ask me about my wife's perfect butthole
Just more bureaucratic red tape to make it harder and costlier to operate a small business. For every scalper it will hurt, it will hurt 1,000 honest business owners trying to get by.
If you aren't paying taxes on profits, or properly tracking revenue (Really what this form does) it's not an "honest" business lol

There's nothing "Costly" about this for "honest" businesses as they should already be tracking their revenue.
 
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Reallink

Member
Can't fix the loopholes that allow the wealthiest corporations/people in the history of the world to (not) pay negative taxes, got to get the poor people flipping yard sale trinkets to make rent.
 
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poppabk

Cheeks Spread for Digital Only Future
Do you really think scalpels are reporting their income?
That's the point. Now the income will be automatically reported and they will have to lie on their taxes if they want to avoid paying tax or take their sales more underground where the profits are likely slimmer.
 

TransTrender

Gold Member
Gross overreach of the Feds.
$600 is truly a bullshit number down in the noise.

How about actually increasing taxes on the rich, like the real 1% with all the wealth.
 

IntentionalPun

Ask me about my wife's perfect butthole
Gross overreach of the Feds.
$600 is truly a bullshit number down in the noise.

How about actually increasing taxes on the rich, like the real 1% with all the wealth.

It's a report to the gov, it slightly complicates your taxes, but you won't "pay tax" unless you:

1) Don't know how to do taxes
2) Are actually profiting
3) On your taxes you'd just say you didn't profit, likely won't get ?'d unless the amount is far above that $600

However, for all tax purposes.. save reciepts. Relatively easy these days though with most things bought online, or possibly with a phone number/account associated even if you buy in store.
 
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Solarstrike

Member
If you aren't paying taxes on profits, or properly tracking revenue (Really what this form does) it's not an "honest" business lol

There's nothing "Costly" about this for "honest" businesses as they should already be tracking their revenue.

How it used to be on eBay, you didn't have to pay taxes as long as you stayed under a certain threshold a month. At a certain amount of sales, $5000 as an example, you would be flagged as a business and then, have to pay business taxes on every sale after that threshold. I urge people if it's just them selling stuff or maybe them and their brother or whoever, to make sure you do not call yourself a business. That's the trigger word the IRS is looking for to come creeping. Ebay is quick to want to brand every Seller as a business! This is wrong!. I've talked to their customer support about it. There are rules and laws of business which explain what a business is comprised of, what it means, what is needed. Someone selling some old comics or toys they have a few times out of the year is not a business. Someone who purchases cases of Pokemon cards or a palette of i9-12900 CPU's and sells them for 2-3 times the retail cost at their licensed website/store regularly or on eBay, IS a business. Someone who regularly buys items in which they know are worth more than what the cost is and then sells them at a higher cost, SHOULD not be considered a business. It's not the Buyers fault the Seller chose a lower price. Many times, people just want to get rid of something and don't need the money.


The only remedy to this obvious penalty to scalpers and to keep the poor, poor is to always keep your receipts of the things you bought for the things you might sell. Keep a record. One thing is for sure, They'll be a lot less shortages of items next year. There shouldn't be any issue finding a new console, GPU, etc.
 
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TransTrender

Gold Member
It's a report to the gov, it slightly complicates your taxes, but you won't "pay tax" unless you:

1) Don't know how to do taxes
2) Are actually profiting
3) On your taxes you'd just say you didn't profit, likely won't get ?'d unless the amount is far above that $600

However, for all tax purposes.. save reciepts. Relatively easy these days though with most things bought online, or possibly with a phone number/account associated even if you buy in store.
Sure, yeah, I don't a shit about the paying taxes part.
My concern is the additional burden put upon business and tax payers, as well as the IRS, to process all of the additional forms.
It's rather absurd to set such a low limit, when they could have done a multitude of other things that didn't expand the size of the IRS nor increase the tax burden on business and tax payers.
 

IntentionalPun

Ask me about my wife's perfect butthole
How it used to be on eBay, you didn't have to pay taxes as long as you stayed under a certain threshold a month. At a certain amount of sales, $5000 as an example, you would be flagged as a business and then, have to pay business taxes on every sale after that threshold.

No, how it used to work is, you didn't get automatically reported to the government.

Legally, you owed the taxes if it was profit and like you said, if you did it as a business. Meaning if you are buying stuff below cost and selling at a profit.

Even if Ebay sends a 1099-K to the government, if you are "Selling old Pokemon cards", if you aren't doing so as a business you aren't taxed as a business. However you do in fact, legally owe capital gains tax.
 

IntentionalPun

Ask me about my wife's perfect butthole
Sure, yeah, I don't a shit about the paying taxes part.
My concern is the additional burden put upon business and tax payers, as well as the IRS, to process all of the additional forms.
It's rather absurd to set such a low limit, when they could have done a multitude of other things that didn't expand the size of the IRS nor increase the tax burden on business and tax payers.
There is zero additional burden on businesses, as those businesses would be under the "burden" of reporting their revenue.

For random folks selling stuff on Ebay, over $600 a year? Yeah I'd say this represents an extra thing to check off on your taxes, and that's an annoyance.. expect the simple tax services like TurboTax to be fitted for this, and likely have a threshold for "nobody will care" like they do for local/state sales tax you can report paying w/o entering receipts.
 

poppabk

Cheeks Spread for Digital Only Future
The IRS will go after any market that is worthwhile going after. You deal drugs - they want their slice of the pie. You pave a guys driveway in exchange for him putting up your fence - they want their slice of the pie. You sell something on eBay for more than you bought it for - they want their slice of the pie.
 
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StreetsofBeige

Gold Member
I dont do ebay, but OP's recap is great for telling me the way sellers get taxed. I always wondered if someone doing one giant sale at $1M would be enough for the taxman to come knocking. I guess the old way was no as you needed 200 transactions totaling $20k to be on the radar.
 

zeorhymer

Member
LOL. So the feds are gathering data to see how many people sell stuff. If they think they can make a lot of money, they'll tax everyone. That bike example is so laughable. Are they telling me that I have to keep a receipt for that bike so that I don't have to pay taxes on it when I resell it? Whatever. The convenience of selling stuff online is offset by the feds ready to grab that pie of yours.

Such a fascination with $600. IRS wanted to monitor account with $600 or more. Sounds like it's time to go back to putting cash under the mattress.
 

haxan7

Volunteered as Tribute
LOL. So the feds are gathering data to see how many people sell stuff. If they think they can make a lot of money, they'll tax everyone. That bike example is so laughable. Are they telling me that I have to keep a receipt for that bike so that I don't have to pay taxes on it when I resell it? Whatever. The convenience of selling stuff online is offset by the feds ready to grab that pie of yours.

Such a fascination with $600. IRS wanted to monitor account with $600 or more. Sounds like it's time to go back to putting cash under the mattress.
Exactly. The current administration has to get more money for all their big spending plans somewhere. They are coming for the little guy while their extremists run diversion tactics wearing tax the rich dresses.
 

Mistake

Member
$600 is such a low threshold. This is just so they can go after whoever they want. And because of this, identity theft will go through the roof
 
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Rest

All these years later I still chuckle at what a fucking moron that guy is.
Yesss YEEEESSSS, scalpers will weep.

Huge downside though if you sell collectibles. Onto alternate methods to sell those now!
Scalpers aren't going to report their income on their taxes.
 

SiteSeer

Member
If you aren't paying taxes on profits, or properly tracking revenue (Really what this form does) it's not an "honest" business lol

There's nothing "Costly" about this for "honest" businesses as they should already be tracking their revenue.
we should be giving tax -breaks- and eliminating red tape to small businesses not the other way around. but a government captured by billion dollar multinationals will go after the small fry and not the whales. 🤷‍♀️
 

Dr Bass

Member
Gross overreach of the Feds.
$600 is truly a bullshit number down in the noise.

How about actually increasing taxes on the rich, like the real 1% with all the wealth.
This is a dumb policy but, just out of curiosity, who do you think actually pays most of the taxes in the US?
 
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dorkimoe

Member
This is not anti scalper this is anti anyone who tries to sell anything. Its a fucking crock of shit.

So i bought something and paid taxes on it, then the person who buys it from me pays taxes and then i pay taxes again on selling it. Fuck that.

I was selling old shit i found in storage too, not reselling stuff I bought at a store, and turbotax makes you act like you are running a side business. Also i deposit money from paypal into Draftkings Sportsbook and withdraw that way too, get double taxes on that as well
 
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Sub_Level

wants to fuck an Asian grill.
Highly doubt this will affect the vast majority of Americans. The $600 figure is consistent with the 1099-NEC threshhold. Except unlike the 1099-NEC, just because you get a 1099-K doesn't necessarily mean you have to report anything on your taxes. Its just the IRS putting out feelers tracked via EINs and SSNs; they don't have the manpower or the budget to look at most taxpayers in depth.
 

poppabk

Cheeks Spread for Digital Only Future
You guys really think this was implemented in any part to stop scalping?

Get the fuck outta here lol. It's money on the table.
It was implemented to get their hands on some of the money people like scalpers are making. And will have the knock-on effect of making scalping slightly less profitable.
 

LiquidMetal14

hide your water-based mammals
I think a lot of us who even bother to sell are selling outside of ebay.

When I buy or sell I always ask the seller if they take Venmo, zelle, or PayPal. I couldn't stand all the fees with eBay and adding this makes it harder to even consider.

I had a friend tell me a out this a few weeks ago and told him I'd go to marketplace or even Offer Up.
 
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