Primarily Petroliana Shop Talk Forums Shop Talk Petroliana Forums General Petroliana Discussion PayPal tax report

I'm confused. Different press articles say different things.
A 1099k form to be issued after $600 total received.
One article says " friends and family " transactions exempt.
Anybody checked with a " Tax advisor" yet?

I havent talked to tax advisor but we are already gearing up for this. Asking prices on ebay need to go up, again, to cover paying taxes on it. We are keeping every receipt we can think of to create a cost basis, but good look to the tax man to figure out what we paid on an item we bought years ago or us for that matter.

Just one more reason why I won't sell on Ebay,or use Paypal.

Agree a 100% I'm done with all of it.

We stopped selling on feebay and just about to drop PayPal too.

I also refuse to use either of these two. Just too much hassle.

I cant really afford to give up on ebay, too many good buyers on there. I can up the costs of my items though to compensate for all their fees and now tax implications.

Ebay collects sales tax from the buyer of an item on their platform.
Ebay then is responsible for submitting state tax as they base it on the purchaser's ship to address and have collected it.

So when did Ebay start 1099 the seller? 2022 or 2021?

Found this March 2021 online document regarding Ebay subject:

Starting next year, the federal threshold for issuing the 1099-K will drop to $600 with no minimum transaction level, due to a provision in the recently enacted American Rescue Plan Act. (Some states already have lower minimums.)

This means that in early 2023, you could receive a 1099-K for online sales you make in 2022. And this would be the case whether you’re an occasional seller or are operating as a business, as long as you sold more than $600 worth on a single platform. It doesn’t necessarily mean you’d be taxed on the money, but you would need to account for it on your tax return.

One aspect I don't understand is that ebay is charging/collecting sales tax for purchases made by US buyers from Canadian sellers??

I understood the sales tax, the 1099K is for federal income tax.
looks like amount over $600 a year gets a form.
You need receipts for cost and sales.
Looks like it doesn't matter if it's " Friends" or not.

What the hell?? So eBay is charging the buyer tax for the government (which I knew) and now the seller is getting taxed on the same money over $600 for the same sale?????

If I buy an item for over $600 at the store, yes I pay sales tax, but the store doesn’t pay tax on their incoming money !!!

And they’re going to tax friends and family money on PayPal ??? WTH.

Does anyone know if the seller is taxed over $600 on other platforms such as google pay or Venmo ??

I dont think friends and family is affected, as those are not suppose to be "goods". If you get paid for goods via F&F, technically you are suppose to file on those but it wont trigger a 1099.

Any payment service is affected, Venmo included. It's not ebay, paypal, venmo, doing this, they are responding to government regulation unfortunately.

I think Facebook marketplace is OK for now, but paypal will get you if they pay through there I think.

I think the thing to do is have a cost basis ready to go on everything. We are collecting every receipt we can get. Here's some info:

https://newsroom.paypal-corp.com/20...ing-Requirements-Your-Questions-Answered

Of course they do, every business is taxed on income coming in, that is where receipts, expenses, etc. Come into play to lower that tax.

Only if you were to get audited

Dang, I didn’t know that. Then they also pay taxes when they originally bought the same item from their supplier too !!!!!! Then the same money is used to pay the employees who get taxed on their paycheck. Whew.

If a seller does not have a sales tax account number and pays tax on items to resell, that tax, the cost of the item, shipping and other legit expenses are deducted from his gross sales to get a net profit that is taxed as income.

A vendor who charges sales tax gets an account number from the state. He uses that number when he buys inventory to resell and doesn't pay a sales tax on it. He also can deduct inventory costs and other expenses to determine taxable net profit income.

Facebook auctions are next. If you're selling in those auctions better keep the records for taxes for everyone of those broadcasts are archived on facebooks servers.

If current proposals pass,everyone who does any commerce through their bank account is gonna have to deal with this ... if you run your sales through a bank account that sees $10,000 run through it per year(which includes all of our personal bank accounts) ... it can now be tracked by the irs.

Hairdressers, home health care workers, wrenching on the side, selling petro, etc ...

They will be looking for sources of $ hitting your account that's not linked to a w2 or 1099.

They're already hitting crypto exchanges and making them send out 1099's.

Our world is changing, it's gonna be tough to get $ in and out of the economy without it being tracked.

Face to face $ transactions still good ... just put the cash in your safe.

looking at my ebay statement a little closer it seems I'm paying commsion on the total sale plus tax, plus shipping location? Doesn't seem right to pay a commision on the tax. Taxing the tax

I had heard that proposal was put aside. It needs to stay dead, hopefully!

I got a 1099 form over the weekend for my 2021 Ebay sales. I've already talked to my tax people and I have to pay tax on $6,500 for my 2021 Ebay sales. I know it really sucks. I understood if it was under $20k you were good till 2022, I guess not. I pulled all my Ebay listings and I'm done. It's been a good ride for many years but the party's over.

Unfortunately, it isn't Ebay that is the problem, it is the IRS and the Feds. The IRS is still trying to figure out how to tax you at swap meets and shows.

The exact reason they want to get rid of cash.

..and the reason why I won't convert to Krypto currency either.

Let make the gas shows the place to buy and sell and go back to cash sales!!!

.. ...

Interesting

https://www.journalofaccountancy.co...099-k-threshold-cautions-criticisms.html

great article...thanks for posting.

There was an editorial in the Wall Street Journal a couple of weeks ago about the form. It explained many issues; how millions of people will be affected next tax season, they'll have no idea its coming, and the IRS has no way to handle the influx of questions and needs people will have. Nothing new, but its getting more and more attention. Whoever wrote it called out the need to change the amount that requires the form. Hopefully Congress will listen. Unlikely, but I have many dreams.

PayPal

Tax rules have changed
We’ve got you covered with all the details:
Beginning January 1, 2022, the IRS implemented new reporting guidelines for individuals receiving goods and services payments on PayPal and other platforms totaling $600 or more per year.

So what exactly does this mean for you?

Well, if you’re getting payments from friends and family members, this won’t apply (lucky you!). Friends and family payments are things like splitting a bill, sharing apartment expenses, or paying back friends. None of these are reported.


The new tax requirements only apply to goods and services payments. These transactions are tagged in the app by a buyer, indicating they’re purchasing something like a couch from a seller. Payments received by a Seller Profile are also goods and services payments.

If you receive over $600 in goods and services payments, we’ll automatically keep track of these payments and provide you with a 1099-K form at the end of the year. If your tax info is not complete, we’ll reach out to you with instructions.

And remember, this only applies to receiving goods and services payments. Payments that you send are not reported.


This info isn’t tax advice. Please consult your tax advisor about these. If you need more info, you can learn more here.

Thanks paypal.

ebay is holding my funds until I give them a SSN for a 1099 form

The little Guy gets Screwed again !

#&%@