Paypal and 1099k's

[81cutlass]

Saw this on one of my other hobby pages. Thought I would FYI for everything that uses Paypal. I am no CPA but from what I understand if you do more than $600 of sales on ebay, paypal, or anything else you will now get taxed as the seller (not just your state sales tax that's already done through ebay and others), it's the SELLERS medicare, social security ect. tax that is now mandated. It looks like the govt snuck in the change under the 'Rona bill.

It used to be $20,000 and 200 transactions, so if you did less than $20,000 of business AND less than 200 transactions through ebay or paypal you wouldn't get a 1099K. You were still 'responsible' to report the income but there was no way for the IRS to see. Now they do.

But now if you do over $600 of business through ebay or paypal you automatically get a 1099k.


So a situation here is that you part out a G body and sell the interior for $300 on marketplace, sell the fenders on craigslist for $100, sell the bumper supports on GBF for $200, and the headlight switch for $5, and get paid through paypal for everything, you 'made' $605. That $605 goes to your AGI so if you made $50,000 AGI last year from your main job, you now make $50,605 and are personally responsible for paying the income, social security, and medicare taxes in that $605.

Say goodbye to paypal and ebay! Time to start using checks and cash again!

New Reporting Requirements for Money Earned Online - Form 1099-K - Financial Solution Advisors

Airbnb owners, Etsy sellers, gig workers, and others using online platforms to earn extra cash will be subject to new reporting requirements in 2024 with Form 1099-K.

www.gunnchamberlain.com

Paypal Changes You Should Know About - Stepanchuk

Paypal Changes You Should Know About - Stepanchuk

stepanchukcpa.com

 

[L92 OLDS]

Wow, thanks for sharing that. This is going to hurt eBay and PayPal in the long run. Can you still gift money sent through PayPal and would this avoid the automatic tax?

*Edit*

Looks like gifting money could still be tax-free.

“ transactions requiring 1099-K include only transactions for goods and services. This means a 1099-K need not be filed when an individual uses PayPal or similar services to reimburse friends or relatives for expenses or to make charitable contributions.”

 

[motorheadmike]

Holy sh*t. Everyone wants their pound of flesh.

Hooray for small "s" socialism, it's expensive.

 

[84dragcutlass]

Thats nuts, that is really going to take the incentive out of it for people to sell things that they have laying around on marketplace or other online sites to make a little extra money. Not to mention that the government has already taken taxes out on most things since lets face it you paid on it when you got the item in the first place. Very interesting thanks for sharing.

 

[ck80]

Thats nuts, that is really going to take the incentive out of it for people to sell things that they have laying around on marketplace or other online sites to make a little extra money. Not to mention that the government has already taken taxes out on most things since lets face it you paid on it when you got the item in the first place. Very interesting thanks for sharing.

Not sure about the incentive part.

We stopped using PayPal about 5 years ago, and refused to join any of those other electronic payment schemes for a laundry list of reasons.

Sure, once in a while we had someone say they weren't interested in something if we wouldn't take (insertecraphere) but someone else always stepped up and paid cash.

Interesting side note. Tax code used to always say you only had to pay tax on gain of personal asset sale - ie I sell daily driver plain Jane car, it usually didn't appreciate while I owned it. So no gain, no tax. But if I bought it for 5k and sold it for 10k I was on honor system legally bound to report the gain as other income not reported elsewhere.

I'm not going to dig too deep on this because idgaf about PayPal or eBay selling, but, sounds like there ought to be a tax code defense if you claim or show no gain.

 

[69hurstolds]

Well, it's the burn pile for those spare NOS parts I'll have left over. Then I can WRITE THEM OFF as a loss because I was going to sell them on Ebay but then they caught fire. So if it could be taxed if sold, then it's value can be written off if lost in a fire.

It's not going to take effect until 2022. So look for that 1099 in 2023.

Or figure out another way to sell stuff. You KNOW Ebay is not going to say anything to their sellers about this. It won't matter, people will run for the hills as soon as the sellers find out anyway. And anything going through PayPal will be a friends/family thing.

I'll be done with Ebay soon as it is.

They're looking at EVERYTHING. And I mean everything. The big push is to go electronic for transactions simply so they can be MONITORED. Cashless system. The ploy is it'll make it so EASY for the buyer to not have to carry cash or worry about someone not getting a payment because you'll see it happening in a blink of an eye. But all that will get recorded. They're going to know if you have any extra money going in and from where if you use places like credit cards, Paypal and other similar payment systems.

It's not going to be an ask, either, I'm afraid. It'll just happen and then there you are. So get used to paying taxes or quit selling your sh*t or trying to make money on the side/under the table.

 

[ck80]

Well, it's the burn pile for those spare NOS parts I'll have left over. Then I can WRITE THEM OFF as a loss because I was going to sell them on Ebay but then they caught fire. So if it could be taxed if sold, then it's value can be written off if lost in a fire.

It's not going to take effect until 2022. So look for that 1099 in 2023.

Or figure out another way to sell stuff. You KNOW Ebay is not going to say anything to their sellers about this. It won't matter, people will run for the hills as soon as the sellers find out anyway. And anything going through PayPal will be a friends/family thing.

I'll be done with Ebay soon as it is.

They're looking at EVERYTHING. And I mean everything. The big push is to go electronic for transactions simply so they can be MONITORED. Cashless system. The ploy is it'll make it so EASY for the buyer to not have to carry cash or worry about someone not getting a payment because you'll see it happening in a blink of an eye. But all that will get recorded. They're going to know if you have any extra money going in and from where if you use places like credit cards, Paypal and other similar payment systems.

It's not going to be an ask, either, I'm afraid. It'll just happen and then there you are. So get used to paying taxes or quit selling your sh*t or trying to make money on the side/under the table.

Sounds like an argument to bring back swap meet participation...

 

[oldmansmonte]

Saw this on one of my other hobby pages. Thought I would FYI for everything that uses Paypal. I am no CPA but from what I understand if you do more than $600 of sales on ebay, paypal, or anything else you will now get taxed as the seller (not just your state sales tax that's already done through ebay and others), it's the SELLERS medicare, social security ect. tax that is now mandated. It looks like the govt snuck in the change under the 'Rona bill.

It used to be $20,000 and 200 transactions, so if you did less than $20,000 of business AND less than 200 transactions through ebay or paypal you wouldn't get a 1099K. You were still 'responsible' to report the income but there was no way for the IRS to see. Now they do.

But now if you do over $600 of business through ebay or paypal you automatically get a 1099k.


So a situation here is that you part out a G body and sell the interior for $300 on marketplace, sell the fenders on craigslist for $100, sell the bumper supports on GBF for $200, and the headlight switch for $5, and get paid through paypal for everything, you 'made' $605. That $605 goes to your AGI so if you made $50,000 AGI last year from your main job, you now make $50,605 and are personally responsible for paying the income, social security, and medicare taxes in that $605.

Say goodbye to paypal and ebay! Time to start using checks and cash again!

New Reporting Requirements for Money Earned Online - Form 1099-K - Financial Solution Advisors

Airbnb owners, Etsy sellers, gig workers, and others using online platforms to earn extra cash will be subject to new reporting requirements in 2024 with Form 1099-K.

www.gunnchamberlain.com

Paypal Changes You Should Know About - Stepanchuk

Paypal Changes You Should Know About - Stepanchuk

stepanchukcpa.com

Our government using in "Emergency" situation as a guise to pass legislation that hurts the American people in a way TOTALLY UNRELATED to the emergency itself? You don'y say???

And yes, use cash. Keep cash alive. It's critical for your privacy and freedom.

 

[pagrunt]

More reason not to sell on the grid. This will motivate me to sell what I need to before the end of the year. I'll be abusing the freinds & family loop hole untill they start sniffing around that option.

 

[Wheelspinner]

I used friends a lot on PayPal as I sell a lot of military truck parts to friends. It’s a small community. Got notified by PayPal a few weeks ago that I am now banned from accepting friends and family. Even from family. And friends.

So my sales circle got much smaller for cash sales only.