Those of You That Use 3rd Party Payment, Read This.

[Coyote9]

That's fucking ridiculous.

Yes The Dan , it was so ridiculous that even the Democrats rraised it to $10,000 and that has not passed yet

 

[TheDan]

Yes The Dan , it was so ridiculous that even the Democrats rraised it to $10,000 and that has not passed yet

Two separate issues. https://www.texasguntalk.com/thread...nts-with-over-600-annual-transactions.108372/

The requirement for payment processors to report anything over $600 annually is in H.R.1319 - American Rescue Plan Act of 2021, which became law 03/11/2021.

 

[TheDan]

Apparently eBay is feeling the squeeze and starting an email campaign to reverse it. Received this today.

Hi Daniel,​ ​ 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.​

 

[Southpaw]

Update​

​

IRS announces delay in Form 1099-K reporting threshold for third party platform payments in 2023; plans for a threshold of $5,000 for 2024 to phase in implementation​

https://www.irs.gov/newsroom/irs-an...d-of-5000-for-2024-to-phase-in-implementation

 

[DaBull]

I read somewhere that Zelle will not have to report a 1099K because they are purely a fund transfer service, not a marketplace facilitator like Paypal and Venmo.

Also, the 1099K is just a flag to the IRS that says you may have income to report, it doesn't say you have to pay taxes on the reported amount. For example, if you have $50K on a 1099K from ebay, that is your gross. Once you do your taxes and subtract your cost of goods and shipping, you might have only made $10K which is what you pay taxes on. Like ALL the banking and financial transaction data the IRS wants to collect on everyone, it is not for immediate use (audits) unless your pattern is WAY out of the ordinary for the taxes you paid. Otherwise, it just sits there waiting for some reason to look at it. Like being a conservative, Trump voter, or pro-gun.

 

[deemus]

While mostly true, if you get a 1099-k and don’t report it, the IRS will send you a bill of tax owed on the total.

 

[TheDan]

Otherwise, it just sits there waiting for some reason to look at it. Like being a conservative, Trump voter, or pro-gun.

Exactly. We all have targets on our backs.

If you have a garage sale where you're getting rid of old stuff for 10-30¢ on the dollar, you don't have to pay taxes on that, but can you actually prove you sold those things at a loss.

With taxes you're guilty until proven innocent.

 

[Otto_Mation]

Exactly. We all have targets on our backs.

This is why the left and current administration wants 87,000 new IRS agents. Purely for the persecution of their adversaries.

 

[Sasquatch]

So when is PayPal or Venmo or whoever going to start requring social security numbers? How are they going to prove you area you, for the purposes of issuing a 1099-K?

 

[Southpaw]

So when is PayPal or Venmo or whoever going to start requring social security numbers? How are they going to prove you area you, for the purposes of issuing a 1099-K?

Ebay requested it back at the end of 2022.

PayPal is already requesting it. I only used it a few times for true payments between actual friends and family and received this last month..I was under the $600 threshold, so I just archived the email below....

Add your tax ID to avoid backup withholding

Tax laws have changed, but we’ll help you keep getting paid easily

The IRS requires us to send you a 1099-K when you receive $600 or more for goods and services each year.

Because of a change to tax laws, you’ll need to provide us with your tax ID, too.

What happens if we don’t have your tax ID

When you reach $600, your payments will go on hold. If we still don’t have your tax ID after 60 days, we’ll start sending 24% of your payments to the IRS for backup withholding.

Learn more about how this tax ID hold may affect you.

Or, log in to PayPal and add your tax ID to avoid a hold and 24% backup withholding when you’re paid.

 

[TheDan]

So when is PayPal or Venmo or whoever going to start requring social security numbers? How are they going to prove you area you, for the purposes of issuing a 1099-K?

https://help.venmo.com/hc/en-us/articles/217532197-Social-Security-Number