Congressional Letter Supports Protecting Sellers from Increased Tax Reporting

[thenightman]

https://www.ebaymainstreet.com/news-...m_medium=email

Play nice, everyone.

[Biohazarddfl]

Originally Posted by thenightman

https://www.ebaymainstreet.com/news-...m_medium=email



Play nice, everyone.

Good find. There are good and easy links in there to just click and have an email sent off to your congressperson

Sent from my SM-G973U using Tapatalk

[mjohnatgt]

I presume the toothpaste is already out of the tube for this issue. And the money they would make from it has already been spent. So, changing the law now would plunge our federal deficit even lower. I doubt this gets any traction unless they create some other revenue stream or cut something out of the existing annual budget. Good luck.

[fabiani12333]

How did they come up with the $600 threshold? It seems arbitrary.

[coachnip13]

The best point being made is the confusion it's going to cause among the millions of people who sell junk like it's a garage sale and who would actually have no tax liability.

[mjohnatgt]

Originally Posted by fabiani12333

How did they come up with the $600 threshold? It seems arbitrary.

That's been a reporting requirement for stuff like state lotteries for a while. PSA sent me a tax receipt when I won a 1993 SP Jeter PSA 8 in a contest, so that I would know to declare it as winnings on my taxes a few years ago.

[theshowandme]

I believe Virginia was doing this all along. Firing off an email to my congressmen.


Sent from my iPhone using Tapatalk

[base set]

Originally Posted by fabiani12333

How did they come up with the $600 threshold? It seems arbitrary.

That’s the threshold for reporting labor expenses to the government for tax purposes. After you pay someone $600 for services rendered, they either have to be paid as an employee with tax withholding and employer contribution matching, or they can be declared an independent contractor who does their own tax reporting. If the latter choice is made, the $ paid to such contractors are reported to the government with a 1099 form and the business that paid them doesn’t withhold taxes from the payments.

Up to paying out $599 to one person, that doesn’t have to be reported to the g-men.

So a $600 reporting level from an eBay, etc. would have matched that threshold for reporting labor expenses.

[thenightman]

Originally Posted by fabiani12333

How did they come up with the $600 threshold? It seems arbitrary.

Just as perplexing is the fact that they threw it into the bill last minute.

[NeedChapmans]

Forgive me, I didn't see the figures in the message.

What did the congressmen/women suggest the limit should be? I see they sent a letter asking for a higher threshold, but I didn't see what that threshold was. Did they suggest an alternative?

[NeedChapmans]

And not to drive this down the wrong road, the LOL is just too great to ignore.

The party that wrote and passed this legislation (entirely) is now the party trying to change it, before it's even taken effect! That letter is signed by only one side of the aisle, and those same people voted for this.

Makes me laugh.

[TimBuckTwo]

Lemme get this right.

I buy something at retail and pay taxes on it. I sell on ebay and they charge fees on the payment (including juicing me for fees on the shipping charge which should be illegal). Then I have to pay the man for the profit and what not because I live in the country (business) of America. And do all the accounting minutiae of every one of these little transactions up to $600 and past when one sale can blow that number out of the water. And multiply that by millions of sellers doing the same thing.

This country is a business. It is all in the volume of people and churn and the bits and pieces they can take from you in volume.

[TimBuckTwo]

Originally Posted by NeedChapmans

And not to drive this down the wrong road, the LOL is just too great to ignore.

The party that wrote and passed this legislation (entirely) is now the party trying to change it, before it's even taken effect! That letter is signed by only one side of the aisle, and those same people voted for this.

Makes me laugh.

Tell me how backwards my state is. This same party rams laws through and passes them and your only recourse it to go out and petition people to get an item on the ballot to reverse a law that only the party thought needed to be on the books. NOT the people of the state.

[NeedChapmans]

I think for a lot of people on this board, the new law won't be too big of an issue because many will know that they can only pay tax on the profit of their sale, not the entire sale and thus it's easy to minimize (or even zero out) any of the tax loss.

However, for the general public, it's a nightmare. Most Americans will get a 1099 in the mail for the first time, and most Americans will have no idea what to do with it. Unfortunately for them, when Turbo Tax or H&R Block or Tax Act etc. prompt them to add their 1099's to their very simple tax returns, they will do just that and the software is going to calculate the full amount as income.

Most won't know any better and then when that software hits them with a strangely reduced rebate or an increased owed amount, rage will come.

[iluvfish2]

Thats the problem with the forms...Its only reporting income. It doesnt even at least account for the money thats spent/sent out through paypal. That should also be included so at least there's a cash in vs cash out basis for a 1099 (/ what schedule G? - I forget).

This is something that paypal could easily be doing along with any other entity as well. It would at least help. Im not sure can you even go into your paypal account and look at yearly statistics like this? IE money sent, money received, transactions totals, etc?

[NeedChapmans]

Originally Posted by iluvfish2

Thats the problem with the forms...Its only reporting income. It doesnt even at least account for the money thats spent/sent out through paypal. That should also be included so at least there's a cash in vs cash out basis for a 1099 (/ what schedule G? - I forget).

This is something that paypal could easily be doing along with any other entity as well. It would at least help. Im not sure can you even go into your paypal account and look at yearly statistics like this? IE money sent, money received, transactions totals, etc?

The limitation of the 1099 is just that; income only. The burden of the write down falls on the filer and for 75% of America that uses the free file options that report their W-2 every year with a touch of retirement income, they're going to be taken advantage off all the way (Year 1 at least).

[hammertime]

Originally Posted by iluvfish2

Thats the problem with the forms...Its only reporting income. It doesnt even at least account for the money thats spent/sent out through paypal. That should also be included so at least there's a cash in vs cash out basis for a 1099 (/ what schedule G? - I forget).

This is something that paypal could easily be doing along with any other entity as well. It would at least help. Im not sure can you even go into your paypal account and look at yearly statistics like this? IE money sent, money received, transactions totals, etc?

You can create reports but they aren't very user-friendly...I just track it myself in a spreadsheet as I go but when I used to try to figure it out at the end of the year it seemed like you could either get a report of all payments sent, or everything (sent/received). Didn't seem like there was anyway to get a report just of payments received.

[shrevecity]

Originally Posted by TimBuckTwo

Lemme get this right.

I buy something at retail and pay taxes on it. I sell on ebay and they charge fees on the payment (including juicing me for fees on the shipping charge which should be illegal). Then I have to pay the man for the profit and what not because I live in the country (business) of America. And do all the accounting minutiae of every one of these little transactions up to $600 and past when one sale can blow that number out of the water. And multiply that by millions of sellers doing the same thing.

This country is a business. It is all in the volume of people and churn and the bits and pieces they can take from you in volume.

Nothing illegal about charging fees and taxes on shipping charges. Credit Card companies have charged retailers for decades on that as well as tax collected.

On the other if you sell for a loss then you don't have to pay anything if you sell for a profit all that is taxable is what is over what you paid for the item not the whole item.

Point is you should have been keeping track of this stuff long ago this was not a new development it was made known about this time last year there are many stories and posts here about it happening.(did you really think they were going to give us money without some consequences?)

The scary part is if you get a 1099 next year the IRS could see that as a flag that you have had unpaid unclaimed income for the previous years I think its up to 5 and they can go back and hit you on those as well.

Remember the 20K was not the low end requirement to report it was the minimum in which Paypal Ebay or whoever had to send you a 1099 so that means if you did not get one does not mean you did not have to report anything.

[Bcr]

Originally Posted by NeedChapmans

I think for a lot of people on this board, the new law won't be too big of an issue because many will know that they can only pay tax on the profit of their sale, not the entire sale and thus it's easy to minimize (or even zero out) any of the tax loss.

However, for the general public, it's a nightmare. Most Americans will get a 1099 in the mail for the first time, and most Americans will have no idea what to do with it. Unfortunately for them, when Turbo Tax or H&R Block or Tax Act etc. prompt them to add their 1099's to their very simple tax returns, they will do just that and the software is going to calculate the full amount as income.

Most won't know any better and then when that software hits them with a strangely reduced rebate or an increased owed amount, rage will come.

Exactly this. What's funny is that the whole point was to help the lower class and they are doing the opposite instead.

[shrevecity]

Originally Posted by hammertime

You can create reports but they aren't very user-friendly...I just track it myself in a spreadsheet as I go but when I used to try to figure it out at the end of the year it seemed like you could either get a report of all payments sent, or everything (sent/received). Didn't seem like there was anyway to get a report just of payments received.

The Ebay reports you can create are actually pretty complete in regard to your income fees paid refunds given and shipping costs(provided all your shipping was through Ebay)

[NeedChapmans]

Originally Posted by shrevecity

The Ebay reports you can create are actually pretty complete in regard to your income fees paid refunds given and shipping costs(provided all your shipping was through Ebay)

eBay has excellent reports this year; worked out all the issues from years past really user friendly and straightforward.

[NeedChapmans]

Originally Posted by Bcr

Exactly this. What's funny is that the whole point was to help the lower class and they are doing the opposite instead.

Have to believe this is intentional. Surely the same people signing this letter (who voted for this change) knew how it would play out and the plan was always to send the checks, then attempt to cancel the tax hike later.

[shrevecity]

Originally Posted by NeedChapmans

Have to believe this is intentional. Surely the same people signing this letter (who voted for this change) knew how it would play out and the plan was always to send the checks, then attempt to cancel the tax hike later.

I reconcile and pay quarterly taxes on my sales and they have made it to where I can do a quarter in less than 30 minutes as long as I do my daily and monthly reports correctly(which I do get lazy on at times)

That way it should take me no more than an hour to do my entire year in February or when I do it.

Mileage can be your best friend 55 cents per mile is the credit. So if you drive to a card show and buy cards to flip record that mileage. Driving to the Post Office record it, Gotta drive to Wal-Mart go get groceries and wele you are there you buy some shipping supplies.. Record it.

[NeedChapmans]

Originally Posted by shrevecity

I reconcile and pay quarterly taxes on my sales and they have made it to where I can do a quarter in less than 30 minutes as long as I do my daily and monthly reports correctly(which I do get lazy on at times)

That way it should take me no more than an hour to do my entire year in February or when I do it.

I've chosen to overpay on the regular wages and then just do the annual in March. I usually come out owing a small interest penalty overall; but the amount doesn't motivate me to change!

[mjohnatgt]

Originally Posted by shrevecity

The scary part is if you get a 1099 next year the IRS could see that as a flag that you have had unpaid unclaimed income for the previous years I think its up to 5 and they can go back and hit you on those as well.

This is the biggest issue. Those that have been evading owed federal income taxes for years should be sweating it.
All those people that thought the increased child tax credits was just free government cheese didn't realize they were the ones doing the churning. Someone's got to pay for it.