Get ready for those 1099-K's all you online sellers

[69hurstolds]

Starting tomorrow, online places on all these selling sites that actually handle the transfer of funds will be collecting sales and payment data on you, so by 2023's tax cycle, you'll get your 1099-Ks to document your Paypal, FB Marketplace, eBay, etc., sales in the U.S. Be on the lookout for it. While there's this "promise" that people making <400K per year won't have any taxes on them...look the f out. It's not that you shouldn't report income on your taxes, but the fact is now you have to act as a business if you sell ANYTHING over the interwebs with a money broker over $599.99 per year, even as a casual seller. If they don't handle the trade process or send funds, they shouldn't be

If you transact over $599.99 in sales by these entities, or less if they so choose, then you will receive a 1099-K for that for 2022 tax year. This will report total sales by that particular entity for goods/services. Don't think you can get by with selling $2K worth of G-body parts through Paypal doing the friends thing, for example. You may get by for a bit, but too much will trigger them to shut that off for you.

It will not take into account the sourcing costs associated with anything you sell. So that $2K in parts you sold through eBay, you'll need receipts or other bill of sale, etc., to attribute for initial cost. Yeah, that 8.5" rear end you traded a couple of mint fenders for back in 1995....wtf. Sell that for $1500 through Paypal. Good luck with that. I got sh*t older than dirt I've had forever. I guarantee you I don't have receipts for all that crap. Do you?

I think there will be a rise of bitcoin use....or you could make a donation gift to my cause to help me with...say...my medical bills. Yeah, that's right. Medical bills and other living expenses while dealing with my illnesses like fighting Covid and the flu, whatever is in fashion that week. Then you will get a nice "Thank You" gift in return totally unrelated, like an NOS side window seal for a set amount of donation level, or an NOS set of stainless capped lug nuts for SSIII for another donation level, etc. Or you could just LOAN me some money, then I'll pay you back in $$ or goods of equal value. I'll even send you a letter first asking for a "loan" that you can sign and send back with the loan proceeds. I hadn't really thought this through, so it's possible there's a trip up here somewhere. But now you gotta look. Also note that gifts to one individual per year is limited to $16K.

Just have your eyes open. You don't want a bunch of 1099-K's showing up at your house in 2023 unexpectedly.

 

[newmexguy]

There will be a rise in the use of postal money orders, mailed the old fashioned way. Shipping, tape, materials are now headed sky high, it is no longer worthwhile to try and sell any thing big. Only option I have is greyhound, and they closed their local kiosk, packages have to go to El Paso now.
Personally - am looking for a classic/specialty restorer or yard type of business to buy my remaining sheet metal in one shot rather than trying to sell piece by piece. Simply not worth the hassle anymore.

 

[Built6spdMCSS]

So here's the thing..

Your "profit" is supposed to be taxed, so they will have to prove how much I paid for said item.

Everything I sell is priced for what I paid for it, and when bought it was taxed at the time. I won't be subject to the double tax so price of the item just went up to cover the tax, the person buying it will pay for that. Basic economics. I won't take the loss.

People as a whole really need to wake up and see where they are getting robbed. Taxation is theft.

 

[CopperNick]

And the Paypal "friend" option has already been deleted. Tried to go that route with a recent buy and they whacked the seller with a "fee" for handling the transaction. Had to get back with him and cover that myself as it was not his fauilt that he got smacked by greedy bureaucrap and big brother "just do as we say because we think it is good for us" protectionism.



Nick

 

[83StreetMachine]

Honestly, if you are a casual seller, not running an all out online sales business, you have nothing to worry about.

Do I think it's BS? YUP! But I won't be losing sleep over my "earnings" selling the occasional part.

 

[ck80]

So here's the thing..

Your "profit" is supposed to be taxed, so they will have to prove how much I paid for said item.

Everything I sell is priced for what I paid for it, and when bought it was taxed at the time. I won't be subject to the double tax so price of the item just went up to cover the tax, the person buying it will pay for that. Basic economics. I won't take the loss.

People as a whole really need to wake up and see where they are getting robbed. Taxation is theft.

But here's also the thing. Ever hear the phrase you can't fight city hall?

IRS audits are a b!tch. It's nearly guilty until proven innocent once they have reasonable grounds. That 1099-k? They don't need to prove your gain. YOU need to prove your lack of burden. They just show you got funds. Then YOU need to prove acquisition cost.

BTW: AFAIK 'barter' is defined as taxable transaction the same as cash money income. They just need to ask how much the thing you swapped would've been worth as a cash money sale.

All those nearly 80,000 new auditors your fearless leader wants to hire for the irs will do nothing but look for ways you owe money. They're on salary. Fixed cost. You need to spend time and money defending yourself, and, if you win, you don't get to recoup your expenses.

So, do you pay an extra $500 in taxes, or, spend $5,000 in costs fighting on their ground, their location, your travel, to prove you never should've owed it?

You can BET usps and money order will be reported due to ID requirements to cash at the local office, or deposit at your bank where they report it anyways too

You going to avoid it? Switch back to swap meets. Never mark your online ads as 'sold.'

 

[83StreetMachine]

You going to avoid it? Switch back to swap meets. Never mark your online ads as 'sold.'

I've been doing this for a while, it never "sold". It's just not for sale anymore.

 

[Built6spdMCSS]

I just delete the post when it's gone.

Also, one of them things who's to say you sold it for that exact listed amount?

Civil War 2.0 is on the horizon..

 

[86LK]

Here Are the Deductions That Disappeared Due to Tax Law Changes

Here are the tax deductions that went away, and a few that stayed, with the implementation of the Tax Cuts and Jobs Act.

www.investopedia.com

Hobby Expenses. These expenses, up to the amount of income you earned each year, are no longer deductible even though you do have to report (and pay taxes on) any income you earn from your hobby. If you sell goods related to your hobby to customers, you can deduct the cost of those goods when calculating hobby-related income

Can I Deduct Legal Fees on My Taxes? - TurboTax Tax Tips & Videos

With recent changes to the tax laws and adjustments to what counts as being deductible or not, you might be wondering if you're able to deduct any of your legal fees. Follow our guide to determine which legal fees can and cannot be deducted on your taxes.

turbotax.intuit.com

In general, legal fees that are related to your business, including rental properties, can be deductions. This is true even if you didn't win the legal case in which the legal fees were incurred.

until a few years ago, I participated in a hobby (bagpipe band) where I made about $500-700/year. even though reportable over $600, it was worth it to me because of the huge deduction I got from mileage. since my hobby could also be construed as a 'second job' because we certainly did it to get paid, I checked with the IRS and got confirmation about the requirements of my 'second job'. I commuted to job 1 which was 105 miles away, every Monday night was band practice back home (job 2, 100 miles back). I was able to write off $2500 in mileage every year.
you just gotta look for the loopholes. in this case, you bought high-priced used goods (car parts) and then sold them for a loss. no one ever said you had to be smart to run a business or that a profit was required ("sold it for what I paid for it! Bill of sale? sure, I got lots of them!" scribble something down every time you buy something and throw it in a box).
me? I think swap meets are going to be thriving. I'll send a check or money order to someone I know who has been on a forum a long while, but not someone new.

 

[Drkuhar]

Illinois has also topped it off by adding a transaction limit , that i think it was three transactions trigger the threshold for state taxes on top of federal taxes