eBay tax reporting changes

Starting in 2022, online sales (including for coins) greater than $600 will generate a 1099K and will need to be reported as income to the IRS. It used to be $20,000/200 transactions. I no longer sell on eBay but had always reported my income from sales anyway (even though well below $20,000), but this electronic paper trail should force the issue now.

https://www.cnbc.com/2021/03/26/its...g-the-irs-about-income-from-online-sales.html

 

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Yay, I'm not making close to that right now but I'll have to keep that in mind for future

 

Am I right says that only pertains to the Federal Income Tax.
eBay is collecting state taxes.

 

Yes, I would always report these sales on Form 8949 (Sales and Other Dispositions of Capital Assets and Schedule D (Capital Gains and Losses). I believe this revised federal tax policy is part of the new Cares Act.

 

Ebay is collecting and remitting state SALES tax. The 1099 will also be reported to your state, so the sale would also be taxable by them as well.

 

States have been pushing to collect sales tax for online sales across state lines, most interstate purchases I'm doing involve tax, more so this year, but also last year. Heck, I was reselling for a while and the State got wind of 40 or 50 TVs I was bringing into the state from New York, that I got a good deal on, and they audited me hoping to cash in on use tax that was owed. I have a resellers tax exempt certificate for my state, so as long as I sell the item, I don't pay tax to buy the item. anyways. They been trying to stop all the tax dodging in online sales and that's what that's all about.

the 1099K as I understand it, the 3rd party transaction platform must generate a 1099K and send a copy to you or the IRS for any transaction above $600.

You will report it with your income when you file your taxes, however like any business, you can subtract your expenses from to show only the profit/income, and if your costs exceed your business income for the year, you can subtract your loss there from your other income that is taxable.

or,,, I suppose with a collectible of high value, or selling as a hobby and not a business, it could be treated as a capital gain.

IF your sales are like a garage sale, selling your old stuff you own, there is no reason to report it, as you are likely taking a loss on the items, not a profit. It's depreciated over time in most cases and the few you profit on get outweighed by the ones you don't profit on.

Look I'm going to be honest here, this is to give these platforms hoops to jump through for reporting, and to also catch the people that aren't playing it straight and slipping under the radar.

if you are a business and selling on Ebay, and you are legit, you are paying the taxes owed, or using expenses to offset.

If you are a dude selling some things you own in a pinch to make a few extra quick bucks, again likely not a problem.

if you are "flipping" items, or going to thrift stores and buying things cheap and selling higher to profit, and NOT paying taxes on the profit, then you're probably going to have a bad time.

It's designed so that The IRS can see what you are doing on the side and if you are reporting the income or not. there's people staying below the 20K and 200 transaction threshold, using the loophole that was there and not paying taxes on the income, but more importantly, not reporting it, and since Ebay or whoever doesn't have to report it below that mark, the IRS has no idea who they are that are dodging it.

 

I've always just assumed that everything I ever move on eBay is a matter of public record, and if I neglect to report it as income, it'll come back to bite me at the worst possible moment. I'm small-time, but I'm pretty meticulous about reporting.

 

Safest to assume that. This is why benjamins in your wallet and transactions taking place at places like shows is handy. No need to have complete paper trails for something the government may have in interest in down the road. As long as no laws are broken today, and I am not aware of legal reporting requirements if you buy pm yet, (unlike stuff like bitcoins), I am in my rights to keep it confidential.

 

When most casual sellers start getting 1099K's from ebay they'll start looking for other ways to sell their goods. No one wants trouble with the IRS.

 

I wonder if Coin Talk will ever be compelled to issue these 1099s. Just a thought.

 

Well, that screws me!

 

It's good to live in a state that has no state income tax.

 

We get a double hit here in Idaho, if the feds don't get you, the state will, duh, unfair.

 

I'm in a state with state sales tax, but eBay to this day is NOT charging/collecting sales tax on every transaction and/or from/by every seller...it's very inconsistent. Heard it might be, state by state, when it all started, but after all this time...? Can't believe it's taking so long and/or why some aren't charging/collecting...though strictly as a buyer I'm not complaining...

 

I always wondered why I moved to southern Nevada, and not Arizona. Now I know why - Nevada does not have a state income tax. And Arizona taxes pensions as well as earned income. No wonder we are starting to get more and more Arizonians moving over to our state. In southern Nevada, it's right across the Colorado river. I don't sell many coins, too busy buying. Most sales are due to upgrading of coins I already have. Thanks for the tip.

 

i have a friend that just retired from the North Carolina Revenue Department. His job was to audit out of state businesses for sales tax violations. He was so busy and on the road so much, that his residence was a Post Office Box. He drove a Cadillac for many years. He would drive over 100K each year and trade it in. He got enough mileage reimbursement that saved it to pay towards the trade in. He tried to get me to come in with him, but I was married and had 3 children. I had been working for the State Auditors Office at the time. It would have been fun for a while....
But, I bet most states have sales tax auditors for in state sales as well as out of state sales. When I do my North Carolina State Income Tax, I use H & R Block, because they are the easiest to use, but there is a question that asks if you paid sales tax on out of state purchases, and if not, you had better answer truthfully because they have something in their arsenal of computers that can track out of state purchases. Amazon collects North Carolina sales tax at 7.5%.

 

Paypal generated a 1099-K on my tax year 2020 payments received from ebay sales. Now that ebay wants a bigger share of the transaction fees, they'll be generating Forms 1099-K. On the 1099-K I received from paypal, the total payments received includes paypal's transaction fees, payments received for shipping, and sales tax collected by ebay, as itemized on reports available on paypal's webpage. So the total shown on the 1099-K includes money that someone else got. I'll pay tax on the remainder after expenses, if there is any!