(Topic ID: 316343)

So Ebay Sends out 1099 Tax Forms Now?

By SantaEatsCheese

1 year ago


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  • 154 posts
  • 54 Pinsiders participating
  • Latest reply 1 year ago by CrazyLevi
  • Topic is favorited by 4 Pinsiders

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    #1 1 year ago

    I guess I'm never selling a pinball machine on Ebay. Last month I took my son to some estate sales to look for comics for him, and happened upon some old video games in boxes and some old Warhammer sets. After dropping $100, I have sold them for $1500 on ebay over the course of the month (easy money). I just got a notice that I had sold too much, and they were sending me a 1099. Ebay makes selling the small stuff relatively easy (although I still hate the post office), but now they want you to pay taxes on private party sales for used stuff like pinball machines? Count me out.

    #2 1 year ago

    Literally everybody does now. We all have to get used to it for all online transactions that aren't "Friends and family."

    I sold one unwanted ticket on Stubhub this year, for $500.

    Gave another one away because I didn't want to deal with the 1099 for going over $600.

    26
    #3 1 year ago

    It is part of the American Rescue Plan Act of 2021.

    Buckle up - this is only the tip of the iceberg.

    #4 1 year ago

    Several threads on this already. Levi, where's your cut and paste list?

    26
    #5 1 year ago

    Ridiculous considering these items were already taxed once (assuming if used) to begin with, that should be enough. Same goes for used cars being taxed multiple times. Give the lower and middle class a break, this is doing the exact opposite of that.

    #7 1 year ago

    Adding a 1099 to your taxes is a huge pain too to make it worse. You need the highest level of like TurboTax software ($$$) because you essentially own your own business now. It's extremely ridiculous, [Removed]

    #9 1 year ago

    It's a pain, no doubt, but you won't be paying tax. The IRS codes clearly states there is no tax on "personal goods sold at a loss". Document your purchase and sales prices. No tax.

    #11 1 year ago

    [Removed]. I no longer will sell anything on ebay or use any form of electronic payment for this reason (among others).

    I'd rather throw something in the garbage than sell it and have to file a 1099. [Removed]

    -1
    #12 1 year ago

    "It's a pain, no doubt, but you won't be paying tax. The IRS codes clearly states there is no tax on "personal goods sold at a loss". Document your purchase and sales prices. No tax. "

    Aside from the extreme burden of having to document purchases and sales, this only works if you are in fact selling at a loss. I don't know about you, but I am not looking for more pain in my world.

    Buy a pin for $5000 and sell it 15 years later for $6000 - you owe [Removed]!

    #13 1 year ago

    I've been on eBay since January of 1999. I now throw things away that are quite sellable. I'm not dealing with being double taxed on used junk. I now sell on Facebook marketplace but a lot of people now want to pay through PayPal and have you ship........NOPE!! I'd rather throw away new items than jump through hoops. In the near future the feds will be hitting yard sales to be sure they get their cut. The middle class suffers the most. [Removed]. Things are so much better now! Filled a tractor trailer with 126 gallons of fuel today It was $835. Remember when we used our own oil and gas was like $2.59 a gallon? Me to. Life sucks now.

    #14 1 year ago

    Isnt this tax a state tax ,The reported sales as income to the Feds ?Never for any sales tax but I wouldnt mind knowing what its about.A famous man once said taxes are for poor people.

    #18 1 year ago
    Quoted from Jamesays:

    Isnt this tax a state tax ,The reported sales as income to the Feds ?Never for any sales tax but I wouldnt mind knowing what its about.A famous man once said taxes are for poor people.

    Ok after thinking about this a little more I like it even less if thats possible.The buyer pays the state sales tax and the seller pays income tax if they sell enough stuff.

    #20 1 year ago

    I believe all traceable electronic transactions are subject to a 1099. This will impact pinball sales for sure. Cash on the glass is the only way to go for me.

    #21 1 year ago

    The only thing that has changed is you receive tax forms at lower thresholds. Whether you pay the income tax due or not is your business, but you've always owed tax on any profits whether it's a garage sale, FB marketplace, Ebay, Amazon, Craiglist, Pinside, etc. "Friends & Family" payments are no exception. Enough people are using that loophole now that it will be closed really quickly.

    Anything I purchase with the intent to resell for profit I've always paid income tax on. The ones that bother me are the personal possessions that just happen to go up in value. I have Funkos I've paid $10 for, kept 10 years, and are worth $1000 now. We all have pinball machines that have appreciated significantly. That's the kind of sale that should be done in cash in person. I figure it all balances out. My parents bought me probably $10-15k worth of baseball cards back in the late 80s and early 90s. Most of them went in the trash since then. At most the whole collection might be worth $1000 after over 30 years. In my mind, that loss should count against the gains from the pinball machines.

    #22 1 year ago
    Quoted from PinballTilt:

    Adding a 1099 to your taxes is a huge pain too to make it worse. You need the highest level of like TurboTax software ($$$) because you essentially own your own business now. It's extremely ridiculous, [Removed]

    Not really a "pain", it's pretty simple. But yes paying for the highest version of TurboTax sucks. Been doing so since 2003. I do my own taxes and it still costs me about $200 a year including filing in two states.

    #23 1 year ago

    Inflation might have to do with the nearly $5 trillion spent in relief type bills over the past 2+ years by two different administrations. I actually wrote $5 billion at first, can't even fathom $5 trillion...that's enough for 500,000 Fathom remakes at $10k each lol.

    Cares Act, March 25th 2020: $2 trillion

    Consolidated Appropriations Act, December 21st 2020: $900 billion

    American Rescue Plan, March 11th 2021: $1.9 trillion

    #26 1 year ago
    Quoted from PanzerFreak:

    Inflation might have to do with the nearly $5 trillion spent in relief type bills over the past 2+ years by two different administrations. I actually wrote $5 billion at first, can't even fathom $5 trillion...that's enough for 500,000 Fathom remakes at $10k each lol.
    Cares Act, March 25th 2020: $2 trillion
    Consolidated Appropriations Act, December 21st 2020: $900 billion
    American Rescue Plan, March 11th 2021: $1.9 trillion

    Didn't we just pass a $40 billion Ukrainian relief bill of some kind as well?

    #28 1 year ago
    Quoted from SantaEatsCheese:

    I guess I'm never selling a pinball machine on Ebay. Last month I took my son to some estate sales to look for comics for him, and happened upon some old video games in boxes and some old Warhammer sets. After dropping $100, I have sold them for $1500 on ebay over the course of the month (easy money). I just got a notice that I had sold too much, and they were sending me a 1099. Ebay makes selling the small stuff relatively easy (although I still hate the post office), but now they want you to pay taxes on private party sales for used stuff like pinball machines? Count me out.

    This has been a rule with the IRS for all time. You should’ve always reported that transaction.

    -2
    #29 1 year ago

    Well.....it looks like no one can figure why this has happened. I guess we should just accept it without complaint or question, and not say anything that might offend anyone. Whew! I feel better now.

    #30 1 year ago

    Maybe it’s just me but I don’t understand complaints about paying taxes. It’s simple in the sense that you owe taxes when you make money (profit). Make nothing and you won’t owe any taxes.

    Tax rates / brackets or how the money is being spent is a whole different discussion but when taxes are owed doesn’t seem very debatable.

    #31 1 year ago

    We are headed down a path that was brainstormed in the 50's and executed in the 60's.

    Having said that, if you earn a profit on a personal item that you resale, you should declare it has income based on the current definition in the tax code.

    It's only fair.

    #32 1 year ago

    My tax guy always reminds me every year....
    "If your paying taxes your making money"
    I will receive 4 1099's for 2022 now. Ebay, paypal, stripe, venmo.
    Passed 600 on all of those in Feb.
    Now, the trick will be list all the expenses and deductions.
    Don't forget, shipping charges and packaging are deductible.

    #33 1 year ago

    You need to keep good records. Buy something for $10 and sell it for $100, you owe tax on the $90 income. Pretty simple. It was always the rule. They are just trying to enforce it.

    #34 1 year ago
    Quoted from Methos:

    We are headed down a path that was brainstormed in the 50's and executed in the 60's.
    Having said that, if you earn a profit on a personal item that you resale, you should declare it has income based on the current definition in the tax code.
    It's only fair.

    if you buy NIB in a state with no taxes and ship to your state the shipping almost evens it out anyway.Different subject I know.

    #35 1 year ago
    Quoted from loneacer:

    Not really a "pain", it's pretty simple. But yes paying for the highest version of TurboTax sucks. Been doing so since 2003. I do my own taxes and it still costs me about $200 a year including filing in two states.

    You may not see it as a pain, but imagine getting that 1099 in January and having no receipts for what you sold. Now the government sees it as all profit. Sure you can search for receipts or try to get creative, this is the painful part. How much did you spend on gas? How much on shipping supplies? How much on shipping? How much was the stuff you bought? It's a pain for someone who has never dealt with that before or sold stuff they got several years ago and don't have the receipts anymore.

    One of my hobbies is cards. Well with cards if you get a cool card out of your hobby box or whatever and sell it, that's 100% profit. My understanding is unless you sell everything you got out of that box, you can't deduct the original purchase price of that box. I'm not a tax expert though

    #36 1 year ago

    In the North , they use the work surcharge... because tax on tax wouldn't be fair .

    #37 1 year ago

    Two words:
    Cash
    Craigslist

    #38 1 year ago

    It hasn't always been the rule. The threshold used to be 200 transactions or $20,000 transferred through a business account on a payment processing app. Now, that threshold has been dropped to $600. Remember all that hoopla in the news about how the administration was going to start looking into everybody's bank account that has over $600 in it? That was the spin the media put into it so that the talking heads wouldn't be lying when they said that wasn't true. What IS true is they're using that $600 threshold to squeeze every last tax dollar they can out of as many people as they can. This time, it'll hurt the little guys the most. Larger businesses have always been above that previous threshold, so it was never really a problem.

    Keep in mind that this is not about goods sold at all, it is about money transferred through third party payment processing companies/apps. So, eBay/PayPal/Venmo/CashApp/whomever will send you a 1099 regardless of what the items were that you sold and whether or not you sold them at a loss or made a huge profit. It's not about those details. All they did was process more than $600 of payments to you and that's what triggers the 1099. So far, the only recourse is to make sure that people sending you money through those apps is doing it as "Friends and Family", that'll avoid the auto-1099. Obviously eBay doesn't operate like that, so they're the exception to the F&F loophole. It's now up to you to prove to the IRS that you sold those items at a loss.

    Can one of you tax pros on here tell me how I'm supposed to do that with items that I've had either in my possession or my family's possession for over 40 years whose original sale price cannot be found on the internet? Even if I did know the original sale price of said item, do I get to adjust it for inflation and put that on my taxes somewhere/somehow?

    So far, the only way around this automatic-sending-of-the-1099 situation for online payment processing is to use Zelle. They're the only ones not reporting anything to the IRS. They leave the onus on the end user, as it should be. Most banks in the US use Zelle as their preferred payment processing app, so check it out with your own bank. They do have limits on the amount that can be transferred, but it varies with each bank. Some are daily limits, some are weekly. Call your bank to find out and if it works for you, great! As for selling pinball machines, though, cash on glass is most likely going to be the only way forward. At least until November or a new administration...

    #39 1 year ago
    Quoted from PinballTilt:You may not see it as a pain, but imagine getting that 1099 in January and having no receipts for what you sold. Now the government sees it as all profit. Sure you can search for receipts or try to get creative, this is the painful part. How much did you spend on gas? How much on shipping supplies? How much on shipping? How much was the stuff you bought? It's a pain for someone who has never dealt with that before or sold stuff they got several years ago and don't have the receipts anymore.
    One of my hobbies is cards. Well with cards if you get a cool card out of your hobby box or whatever and sell it, that's 100% profit. My understanding is unless you sell everything you got out of that box, you can't deduct the original purchase price of that box. I'm not a tax expert though

    Just do your best. You’re not gonna get audited. At the end of the day though, if you made more money selling something that you did spending money to own it/sell it, that’s profit and must be taxed. This has always been the case.

    #40 1 year ago
    Quoted from transprtr4u:

    In the North , they use the work surcharge... because tax on tax wouldn't be fair .

    This isn’t tax on tax. This is you selling goods for more than you paid for them. That’s called taxable income.

    Or in a lot of these cases, capital gains tax.

    #41 1 year ago
    Quoted from Miguel351:

    It hasn't always been the rule.

    We have always been required to pay income/capital gains tax.

    It’s only new that these companies have started to issue us 1099s. They always should’ve been doing it. The IRS only recently started making them do it.

    This is literally only about goods sold. All personal funds transferred between these apps will never get a 1099 issued to you. Make sure you’re using the payment apps properly and you’ll be fine. Used good and services for business transactions, friends and family for non business transactions. You make profits in the US, they will be taxed. It’s always been this way, we’ve just gotten away with not doing it.

    You could transfer a million dollars via friends and family and you won’t get a 1099. But if you sell 1 million bucks of stuff via friends and family to try and hide your business, you might get audited.

    Do you best to value the item you’ve had for 40 years. Do you best to approximate the cost of upkeep over that time. Take that off of what you sold it for. Then pay tax on any profit. You will not get audited if you make a good faith effort at this. But if you sell a ton of stuff, 100s it thousands of stuff, they might come looking into why you don’t have a business setup.

    I feel like we’ve talked about this before.

    #42 1 year ago

    Are they sending them certified mail?

    -6
    #43 1 year ago

    One of my 401k accounts has lost 20 grand this year - when it bounces back I'll have to pay tax on that 20k even though I already did once.

    #44 1 year ago
    Quoted from nicoy3k:

    Are they sending them certified mail?

    Electronic usually. Regardless how you get your copy, the IRS will have their copy of it.

    19
    #45 1 year ago
    Quoted from pinzrfun:

    One of my 401k accounts has lost 20 grand this year - when it bounces back I'll have to pay tax on that 20k even though I already did once.

    You need to research how a 401K works.

    #46 1 year ago
    Quoted from pinzrfun:

    One of my 401k accounts has lost 20 grand this year - when it bounces back I'll have to pay tax on that 20k even though I already did once.

    You have paid zero tax on your 401k account. You only pay tax when the money comes out. It’s all pre tax money going in unless you have a Roth account. That’s post tax money, so no tax coming out assuming it’s a qualified distribution.

    #47 1 year ago

    The government wants their cut ANYTIME money transfers hands. It doesn't matter if you sell it for a loss or not. Cash sales is probably one of the few things you can get away with until we go to a completely cashless system.

    Anything I have at home I don't want goes in a garage sale first, then the dump.

    #48 1 year ago

    It's always been the rule. You have always been required to pay tax on income. People aern't honest, so the government is finding ways to make people honest.

    Buy a Tron LE for $6000 in 2008, sell it for $18,000 in 2022. You owe capital gains tax(because it was a multi-year investment return) on $12,000. Same as if you made the money in the stock market. Even if its a cash transaction on craigslist, yes you owe the tax. Will they ever know? Harder to prove. Get audited, how will you explain that $18,000 of cash that went into your bank account? Thats why the Fed's want more information from banks about cash transactions. Again not new rules, just new ways of enforcement.

    #49 1 year ago
    Quoted from schudel5:

    It doesn't matter if you sell it for a loss or not.

    Haha. Yes it does. It’s literally the difference between paying tax or no tax. And in the case of losses in business, you can carry that shit forward. That’s how the Uber rich reduce their overall tax rates paid.

    #50 1 year ago
    Quoted from chuckwurt:

    You have paid zero tax on your 401k account. You only pay tax when the money comes out. It’s all pre tax money going in unless you have a Roth account. That’s post tax money, so no tax coming out assuming it’s a qualified distribution.

    i am obviously not awake yet.

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