The IRS and PayPal

TEAforONE

https://newsroom.paypal-corp.com/2021-11-04-New-US-Tax-Reporting-Requirements-Your-Questions-Answered

Looks like this has been delayed once again. No 1099-k until you hit the $20k mark.
This should help hobbyists remain hobbyists.

SCompRacer

TEAforONE wrote: »

https://newsroom.paypal-corp.com/2021-11-04-New-US-Tax-Reporting-Requirements-Your-Questions-Answered

Looks like this has been delayed once again. No 1099-k until you hit the $20k mark.
This should help hobbyists remain hobbyists.

Some states, like Illinois shut that down. IIRC IL requires a 1099K with over 1K in sales. I learned that the hard way.

This is an old 12/2022 article I had bookmarked.

https://www.hellobonsai.com/blog/how-to-avoid-paypal-1099

VR3

The 600 rule is pure trash and a government over reach

The 20k and 200 transactions makes way more sense

TEAforONE

Just about everything the government does is over reach.

invalid

So if they are treating hobbyist as a business, then when you sell something and buy something more expensive is it then considered a loss?

VR3

Losses won't count as taxable income but you can't write off the loss either

TEAforONE

invalid wrote: »

So if they are treating hobbyist as a business, then when you sell something and buy something more expensive is it then considered a loss?

If you’re looking for logic,our government is the wrong place to look.

SCompRacer

VR3 wrote: »

Losses won't count as taxable income but you can't write off the loss either

Yeah, you'd have to be a business to do that. The pither is as an individual you cannot deduct shipping or ebay fees. You pay tax on the total amount.

xschop

We're all friends and family here.

invalid

VR3 wrote: »

Losses won't count as taxable income but you can't write off the loss either

I don't think that is correct, they are treating you as a business at that point, if a 1099 is issued you certainly can write off losses.

invalid

Sorry you are correct, it's a 1099k, but if you have a loss then you don't pay anything.

invalid

I guess I'll have to register an audio business and then write off the losses.

invalid

Actually I looked it up, you can use a schedule D form and not pay anything, unless you are a business then a schedule C.

F1nut

Let's see if the mods delete this one.
It's a part of a failed policy of the current administration.

invalid

So if you work for 100 different people and it's under $600 you don't have to claim the 59,900 if you received 1099's?

sucks2beme

For 2024 the limit is $5000. But any service can report via the 1099k
for any amount. And now that Fednow has become a major player
in bank to bank money transactions, they pretty much can see everything.
And any bank account with $600 in it is reported by banks as well.
They are going after the small guy regardless of what they say.
Ebay is going to get hit hard by this. Selling used cars is about to get
real interesting too. I'm sure moving a couple of grand around is going
to raise a red flag. The war on cash transactions is about to get real.
CBDC is coming soon.

polrbehr

invalid wrote: »

I guess I'll have to register an audio business and then write off the losses.

Do it. Really.
There are so many tax write-offs that the average person can't take, but a small business can. If they want to go after the small guy, their best bet would be to eliminate small biz exemptions and write-offs.

heiney9

This has become a real problem for buyers. People either don't understand the rule or are overly cautious. Recently I bought the new amp and the seller didn't want to use PayPal because of this exact reason. I don't blame people as it's a lame rule as people shouldn't be taxed on person to person sales of used personal items.

I even think it's s*h*i*t*t*y that Ebay has to charge sales tax on the sale of used personal items. I just got into buying some more tubes lately (as if I need more) and was surprised the "buy it now's" all charged sales tax. Maybe the auctions don't (but I bet they do). It's actually put me off of buying more stuff on Ebay (which is good). As an aside, I found another stash of tubes I forgot about and some of the tubes I just purchased I already have......oh well. Mostly filling some voids and quads. Still looking for an early 50's CBS 12AX7 black plate (all I find are GE's w/CBS labels). Only made for about a year or two very early (50-51). Has Tall horseshoe getter.

If people stop accepting PayPal, then the buyer has very little recourse should the deal go south or have an issue. Eventually I convinced him to accept PayPal for payment, but 90% of the items (off Ebay) that I see for sale all ask to be paid by check, Venmo, Zelle, or PayPal friends and family and it's to the avoid the ridiculous $600 IRS rule that may or may not ever go into effect.

H9

sucks2beme

It's coming. They need $$$ to keep the wheels turning. They are
going to find every side hustle and under the table payment.
And there is a plan to rebuild Ukraine after the war ends.
You're looking at a trillion dollar project. God only knows how
Many domestic spending boondoggle are in the works.

pitdogg2

You pay tax on everything you buy on eBay. The problem I have with that is I pay a higher tax than I would should I go buy the same item at Best buy here in town. The tax rate for me is I'm sure a Chicago rate of sales tax.

mhardy6647

Some places have no (state) sales tax. Some have no state income tax, either. I am just sayin'.

heiney9

pitdogg2 wrote: »

You pay tax on everything you buy on eBay. The problem I have with that is I pay a higher tax than I would should I go buy the same item at Best buy here in town. The tax rate for me is I'm sure a Chicago rate of sales tax.

I just don't think we should be taxed on person to person used items. I believe it's a governmental rule and it's a stupid one. Some items can change hands 10-15 times over it's lifetime and charging tax on it every time is wrong on so many levels.

There has to be a better way to collect taxes on those transactions that are truly taxable. Rather than just charging a tax on every single item. It really has limited my Ebay shopping because I ain't paying any more taxes.

Now if you're a retail store and you have an Ebay store to also sell, then I could see charging tax like you would at a store front or virtual store. But if Brock wants to buy a used amp from Joe because Joe got a new amp and then there's a "sales tax", that's pure BS and just a money grab by the gov't.

**not trying to make this political** I think the rule is very misguided and misses the mark by a long shot for what it is trying to do. And that's to catch people who are trying to avoid paying sales tax on an legitimate taxable item.

I also shouldn't have to pay income tax on an item I bought 12 years ago and now sold. The income I earned to buy the item originally was already taxed and now you're saying I'm supposed to declare how much $$$ I made selling my personal items?

H9

pitdogg2

Some items can change hands 10-15 times over it's lifetime and charging tax on it every time is wrong on so many levels

Absolutely!!



Here in my town they talked up a garage sale tax, can you believe that horse hockey? It got so much flack that city hall shelved the idea. The point they were even thinking about it speaks volumes!! Seriously if they want that tax how about going after the begging at the stop lights, after all that should be considered "income" and rightfully should pay income taxes.

treitz3

They just need to back off, period. It's not like they are responsible enough with what they do rob tax us with.

Tom

TEAforONE

Power corrupts, absolute power corrupts absolutely.

GlennDog

heiney9 wrote: »

that's pure BS and just a money grab by the gov't

H9

ZACTLY!

siggy material

invalid

This type of stuff has always been taxable, now they have a paper trail. I do agree it should not be taxed, but it is and has been for a long time.

skipshot12

Frick those rat ****!
We just need to go back to the barter days… tax that!

invalid

skipshot12 wrote: »

Frick those rat ****!
We just need to go back to the barter days… tax that!

I agree, but the powers that be say it is illegal, no paper trail though so good luck with that. I would want to know were they draw the line with that, if I help a friend with his roof and don't expect anything in return, then he helps paint my car months later is it still considered bartering?

Keiko

F1nut wrote: »

Let's see if the mods delete this one.
It's a part of a failed policy of the current administration.

I'm offended.

Meanwhile, back on Maui. . .

Keiko

https://c.tenor.com/hmMI4U5PjyUAAAAM/read-my-lips-no-new-taxes.gif