eBay 1099K

[khauser86]

We can disregard the 1099K if we had less than $20K in gross sales correct?


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[mjohnatgt]

NOOOOOOO.
Income is income. You will need to file the 1099K with your taxes and then figure out where to put your cost into the items on the tax form in order to reduce your liability to your profit. If you do not file the 1099K, but the IRS already received it, there will be a mismatch between your submitted docs on your 1040 and what the IRS was given. This will get you on their radar.

[khauser86]

This is the message I got from eBay…

“A recent technical issue resulted in a 1099-K form being incorrectly provided to you. Please disregard the incorrect 1099-K form. The incorrect 1099-K form was not sent to the IRS or California Franchise Tax Board.

We’re working to resolve the issue and ensure that it will not happen again. Unless you had more than $20,000 in gross sales and 200 transactions in 2021, we will not submit a 1099-K form to the IRS or the California Franchise Tax Board.”


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[RandAlThor]

This is the message I got from eBay…

“A recent technical issue resulted in a 1099-K form being incorrectly provided to you. Please disregard the incorrect 1099-K form. The incorrect 1099-K form was not sent to the IRS or California Franchise Tax Board.

We’re working to resolve the issue and ensure that it will not happen again. Unless you had more than $20,000 in gross sales and 200 transactions in 2021, we will not submit a 1099-K form to the IRS or the California Franchise Tax Board.”


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To be safe I would print out that email and stick it with your tax documents for 2021, that way if by some chance the IRS contacts/audits you about this, you can show them this email.

[asujbl]

To be safe I would print out that email and stick it with your tax documents for 2021, that way if by some chance the IRS contacts/audits you about this, you can show them this email.

And the IRS will laugh and laugh... because the 20,000/200 "requirement" is totally made up

You have to report your income regardless. The IRS doesn't care what triggers a 1099 from eBay and/or PayPal

The email won't mean a damn thing... OP can still print it out to have record, the IRS might then let them amend without I&P, but that email won't get you out of reporting sales

[RL 1953]

do not try to cheat the IRS, they will find you.

[mjohnatgt]

This is the message I got from eBay…
“We’re working to resolve the issue and ensure that it will not happen again. Unless you had more than $20,000 in gross sales and 200 transactions in 2021, we will not submit a 1099-K form to the IRS or the California Franchise Tax Board.”
Cue Dirty Harry: "I guess the question you gotta ask yourself is this: Do I feel lucky? Well, do ya punk?" How much do you trust eBay?

[LRV]

Yep disregard it & when you get one for this year just rip it up..

[quackhead]

Yep disregard it & when you get one for this year just rip it up..


Just like this....


https://media3.giphy.com/media/JUw63Y3GTHbltowXcz/giphy.gif

[oddstuff]

Starting this year, 2022, the threshold has been lowered to $600. A lot of people will be getting 1099s in January/February 2023.

[DynaEtch]

Starting this year, 2022, the threshold has been lowered to $600. A lot of people will be getting 1099s in January/February 2023.

Yep it's going to be pretty nuts and probably will come as a surprise to lots of people. Ebay will likely be hurt due to this once casual sellers become aware.

There is already a small push in Congress by some Democrats to revamp that $600 number to a higher number or back to what it was, but unclear if it will see any success.

The reasoning, which makes sense, is that a lot of small time sellers will end up overpaying in taxes due to this. Casual sellers selling used clothing, old stuff from around the house, could very well be sent a 1099-K. These kinds of sales arent really profit as they typically sold for much less than for originally purchased. But, since a lot of sellers either wont even deduct that (or cant because of complexities in estimating, plus no receipts kept from 15 years ago), it gets counted as pure income and means they are overpaying. In short, it's going to be a mess, lots of casual sellers hurt by overpaying in taxes and bad news for small business.

As for cards, I wonder if the new Ebay vault/digital wallet thing is ebay's response to this new rule.....it says that money made from sales goes into a digital wallet that can then pay for other items, sort of like COMC. I wonder if that doesnt count as a payment transaction into a bank and isnt reported by them....unless a cashout perhaps, like COMC. Not sure how that will work.

[crazy4kinsler]

I just had a thing pop up on my ebay. It says my payments are only hold until I upload my SS#. I'm guessing it's a scam/phisy email thing. But how do I work around it and get paid?

[mjohnatgt]

I just had a thing pop up on my ebay. It says my payments are only hold until I upload my SS#. I'm guessing it's a scam/phisy email thing. But how do I work around it and get paid?
Log in through eBay and confirm it's from them. Others have reported that they got the same message once they went over a threshold for reporting in their state. So I'd be surprised if yours was a scam.

[crazy4kinsler]

Yea, I clicked on it. And it showed my name then the last 4 of my SS#. Then it asked me to put in my whole number. But it appears they already have it. And another question...

I already pay taxes quarterly with my resale certificate. So will I be taxed double? I am still paying taxes on eBay whenever I purchase (I don't purchase but about 1-2 items a quarter because I'm being charged taxes for some reason). So I guess I"ll be one of those that Biden will double tax?

Log in through eBay and confirm it's from them. Others have reported that they got the same message once they went over a threshold for reporting in their state. So I'd be surprised if yours was a scam.

[discodanman45]

Yea, I clicked on it. And it showed my name then the last 4 of my SS#. Then it asked me to put in my whole number. But it appears they already have it. And another question...

I already pay taxes quarterly with my resale certificate. So will I be taxed double? I am still paying taxes on eBay whenever I purchase (I don't purchase but about 1-2 items a quarter because I'm being charged taxes for some reason). So I guess I"ll be one of those that Biden will double tax?

Politically this is unnecessary to even mention. You are not being double taxed. The tax rules for businesses are almost exactly the same even with Trump and the 1099-K form doesn't matter. Whatever estimated taxes you pay will be applied in 2023 when you file taxes. They don't double. My advice is to hire an accountant if you don't understand these rules.

[LRV]

And another question...I already pay taxes quarterly with my resale certificate. So will I be taxed double?

You no longer need to collect your state's tax on sales as Ebay collects & remits it for you now..

[ReggieBush22]

Just found out the money I made from selling my own personal items will now be taxed? This is insanity.

Anyone know how this works? Do they take the amount in the 1099-K and consider it "income" and add it to the rest of my income and it's just taxed as usual? Or something else?

[discodanman45]

Just found out the money I made from selling my own personal items will now be taxed? This is insanity.

Anyone know how this works? Do they take the amount in the 1099-K and consider it "income" and add it to the rest of my income and it's just taxed as usual? Or something else?

You should be able to do lots of deductions to minimize this. You can do the following.

1. Use the 1099-K as a Schedule C and treat your "hobby" like a business.
2. Declare the income as a Schedule D and treat it as a capital gain. The IRS doesn't expect a 1099-K form to be used for this, so you will have to contact them about this.

If you don't know what a Schedule C or Schedule D are, please use an accountant. They will make your life a lot less stressful! :)!

[LRV]

Just found out the money I made from selling my own personal items will now be taxed? This is insanity.

Got news for you, money you made from selling any items has ALWAYS been taxed.. :rolleyes:

[shrevecity]

Yea, I clicked on it. And it showed my name then the last 4 of my SS#. Then it asked me to put in my whole number. But it appears they already have it. And another question...

I already pay taxes quarterly with my resale certificate. So will I be taxed double? I am still paying taxes on eBay whenever I purchase (I don't purchase but about 1-2 items a quarter because I'm being charged taxes for some reason). So I guess I"ll be one of those that Biden will double tax?

Huge difference in state sales taxes and federal income taxes. Your reslae certificate is the State of Texas sales tax. Which for Ebay you no longer have to report BUT Texas will still want you to file somethingeven if its zero if all your sales are on Ebay then you don't have any to report to Texas as Ebay collects it.

Again that has nothing to do with the Federal Income Tax. Thy are 2 seperate things.

[khauser86]

“You may have heard about a new tax law that went into effect this year. We believe this new regulation just doesn’t make sense. It creates confusing and unnecessary paperwork for millions of casual sellers on eBay, who will now receive tax forms even when they don’t owe taxes.

To help support our sellers, we’ve been working to put pressure on Congress by bringing our community together to make their voices heard. We need sellers like you to speak out today and tell Congress to act in the interest of sellers across the US.
Here’s what’s happening

Companies like eBay are required to report sales to the IRS using a tax form called a 1099-K. Until recently, you would only get a 1099-K if you sold over $20,000, or more than 200 items. Starting this year, new legislation has lowered that threshold to just $600, even if that was from a single sale all year. Where it gets complicated is you’ll get this form even if you don’t owe anything, because not all sales are taxable–for example, if you sell something for less than you paid for it. That means millions of sellers will now get unnecessary tax forms, creating confusion and pointless paperwork–both for the IRS, and for small-time sellers who aren’t set up to deal with it.

Imagine selling an old bike for $800 that cost you $1,500 a few years ago. Since you didn’t make a profit, the IRS doesn’t consider that taxable income. But under this new law, you’re still going to get a 1099-K. And now you’ll have to prove to the IRS that you don’t actually owe any taxes on that sale, which makes for complicated accounting work.
Here’s what you can do

We’re asking our community to take action today. Recently, new legislation was introduced in Congress to raise the threshold and limit the number of sellers getting these unnecessary forms. But we need your support to make sure it will pass!

Go to our eBay Main Street website and tell Congress to act now to support Americans selling online. It will only take a few minutes, and if we succeed, it can save you, and millions of other sellers the hassle of needless tax forms for years to come.
Speak out today ➔

We’re committed to making sure all our sellers are set up for success, and will continue to keep you updated. 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 it affects you.

Thanks for being part of the eBay community.”


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[discodanman45]

That email shows that the 1099-K is killing their sales. Lots of sellers must be leaving their platform.

[smackvay]

That email shows that the 1099-K is killing their sales. Lots of sellers must be leaving their platform.

Sellers are leaving ebay as they dont protect sellers anymore. I have 5500 feedback on 2 accounts and used to be able to call and get help with issues, but once that went away and they stretched buyer protection out so long i quit. Not worth it

[paparoke]

Sellers are leaving ebay as they dont protect sellers anymore. I have 5500 feedback on 2 accounts and used to be able to call and get help with issues, but once that went away and they stretched buyer protection out so long i quit. Not worth it

They've made a few improvements over the past few months to help. Like they limited sports card returns to 3 days after delivery to reduce buyers remorse purchases and I believe they are going to implement instant payment required for buy it now purchases to reduce unpaid orders. I think those are good steps forward.

[DynaEtch]

They've made a few improvements over the past few months to help. Like they limited sports card returns to 3 days after delivery to reduce buyers remorse purchases and I believe they are going to implement instant payment required for buy it now purchases to reduce unpaid orders. I think those are good steps forward.

Yep, some others that come to mind are Authenticity Guarantee (which I argue is a plus for sellers selling high end cards and a piece of mind), immediate payment required with offers, and Standard Envelope (well I guess that's over a year old now). They are making strides....

I just wonder how many will leave the platform when the >$600 1099K hits a ton of sellers next year. It's no wonder ebay is trying to encourage people to speak up to their congressional representatives, and put pressure on this etc.

[discodanman45]

Just wait until the IRS sends bills to the people who didn't put the 1099-K on their taxes. There won't be any audit, just a bill for the taxes calculated on the 1099-K. Can't wait for the chaos later this year!

[paparoke]

Yep, some others that come to mind are Authenticity Guarantee (which I argue is a plus for sellers selling high end cards and a piece of mind), immediate payment required with offers, and Standard Envelope (well I guess that's over a year old now). They are making strides....

I just wonder how many will leave the platform when the >$600 1099K hits a ton of sellers next year. It's no wonder ebay is trying to encourage people to speak up to their congressional representatives, and put pressure on this etc.
How can I forget the standard envelope? It probably accounts for 75% of my sales as people love the cheaper shipping option. The insurance program has worked smoothly for me thus for(3 for 3 in claims) and I can argue is less risky than shipping first class without insurance.

I agree with you on the $600 threshold, I think ebay sees the writing on the wall and it is going to hurt their business badly. I hope that they adjust the threshold for next tax year. Maybe instead of $20K, put it in the middle at $10K.