eBay tax reporting changes

Discussion in 'Coin Chat' started by TopcatCoin, Apr 12, 2021.

  1. serafino

    serafino Well-Known Member

    That's for sure, here in California we get heavily taxed. Our neighboring state of Nevada has no income tax ?
     
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  3. serafino

    serafino Well-Known Member

    California sales tax 9.75 %
     
  4. Hiddendragon

    Hiddendragon World coin collector

    So to prepare for this, do you need to save receipts for all the postage you buy and shipping materials? Do you have to keep track of the fees from eBay or will that be provided somehow? Would saving receipts from a coinshop purchase that you later resold be adequate for a tax document? There's no way to show that what you spent the money on at the coin shop is the same thing that you sold on eBay, or the difference in price between the two. I feel like the paperwork involved would be overwhelming.

    And it says at the end that a 28% rate gets applied to the sale of coins! Does that apply to things like everyday eBay coin sales or are we talking about auction house sales of rare coins worth tens of thousands here? No one can make money at that rate.
     
    serafino likes this.
  5. Jim Dale

    Jim Dale Well-Known Member

    I buy few things from ebay. Amazon collects sales tax for my purchases. How about the Mint? Will they start collecting sales tax?
     
  6. serafino

    serafino Well-Known Member

    Things are a changing. The good old days of sellers on eBay not paying much tax will be soon be gone. eBay is a huge marketplace and I'm surprised it took this long for the IRS to get serious about it.
     
  7. Hiddendragon

    Hiddendragon World coin collector

    This isn't about sales tax; this is about federal income tax that sellers have to pay.
     
    jafo50 likes this.
  8. rte

    rte Well-Known Member

    Same here...that translates to no more selling on ebay.
    I usually just have stuff that I'm cleaning up and out of the house OR something that someone else wants me to sell.
    Either way, done and done.
     
    imrich likes this.
  9. rte

    rte Well-Known Member

    Income would require that you made any money on the sale.
    The stuff I listed in the past I was just glad to see go to someone else who would have it.
    I'm not anymore interested in writing off a loss then a perceived gain.
    I ain't going to start a business and have to deal with the paperwork.
     
  10. rte

    rte Well-Known Member

    I can see a sales tax on a new item.
    Used to be that a USED item wasn't taxed when resold, now the wording is changed to transaction tax...
    Essentially taxing your item 2x.
     
  11. Jim Dale

    Jim Dale Well-Known Member

    Excuse me for the miscue. That means that if you are on some website to sell something, it will be up to you to report the sales as income, as it always has been. Many of you (I hope.) sell coins and other commodities on the Internet. In that case, it will be up to you to keep records of your sales and the cost associated with it, i.e., delivery charges, and any other costs associated with the sale. You will have to total your sales, delivery charges and the sales tax. The hard part will be keeping up with the sales tax for each state. You will also be required to make up any difference between sales tax due for each state and the amount of sales tax collected to include a copy of the sales tax statement from each vendor that is exempt from paying sales tax. Each state has a different rate. If your sales are sizeable, the accounting for your sales as well as keeping record of sales tax collected and due. There are some rather inexpensive programs that could help you keep a record of your sales. Again, if your sales are sizeable, you may need to hire a CPA specializing in small businesses. There are some very good accounting firms that are less expensive than a CPA, but hiring a CPA will take a great load off of your shoulders. I worked for the state of North Carolina because I hated doing taxes, however, my last job with the state was keeping up with the accounting records for all the businesses that due business with companies in the state. I had 9 people working directly for me, but each quarter, I drafted other employees in our division to reconcile the sales tax records. No matter how you deal with it, it is a serious challenge.
     
  12. Hiddendragon

    Hiddendragon World coin collector

    The post above is what worries me. I'm not concerned with sales tax because eBay handles that, but I sell a lot of low value coins. I might earn a few thousand a year but I might have 1,000 transactions. If I have to keep track of all these details it's definitely not worth my time and not doable. I'm not going to be keeping track of all this using complicated spreadsheets or hiring an accountant so I can indulge in a hobby. I enjoy selling extra coins that I have but it's not my job and doesn't pay my bills.
     
  13. Vertigo

    Vertigo Did someone say bust?

    That's why I love New Hampshire. We don't pay state tax on eBay or at the checkout.
     
    ToughCOINS likes this.
  14. Lehigh96

    Lehigh96 Toning Enthusiast

    Which is why the $20K was reasonable. If if I sell that much, my profit margin is less than 10%, even at the old threshold, I would only make $2K which isn't worth my time or the IRS. So now they lowered the threshold to $600, which means the IRS is coming after me to collect taxes on $60 Profit??????? That is just insane.

    This isn't a casino payout where the whole thing is taxable, people who sell on eBay have to buy the stuff they sell. The $20K is gross sales, not profit, and to go after taxes on anything less is an absolute waste of the IRS time.
     
    Tater likes this.
  15. Hiddendragon

    Hiddendragon World coin collector

    And how do you calculate profit? Do you keep track of what you paid for every coin? I don't. And what evidence would you need to prove everything if you were audited? Most people don't run their hobby like a business because it's supposed to be fun.
     
    Tater likes this.
  16. serafino

    serafino Well-Known Member

    How does that work, does New Hampshire have sales tax ?
     
  17. Lehigh96

    Lehigh96 Toning Enthusiast

    I actually do keep track of what I pay for each coin, but I have never kept my receipts because the damn threshold was $20K and I was always under it. Now they changed the rules of the game and expect me to have receipts for coins I bought years ago?????

    The only way for me to provide proof would be to match up my Paypal account payments with the amounts listed in my records with matching dates, but even that won't work because I don't always put the sale date, sometimes I use the delivery date.

    There is no doubt about it, this sucks. That said, I don't think they are going to be auditing many people below the old threshold unless they simply don't file taxes.
     
    Tater likes this.
  18. jfreakofkorn

    jfreakofkorn Well-Known Member

    Heard that fakebook will also have similar account(s) as in feebay in paying some kind of taxes on selling item(s)
     
  19. ToughCOINS

    ToughCOINS Dealer Member Moderator

    And that's the key . . . The IRS will first be looking for those who receive 1099s and don't claim that income on their tax returns.
     
  20. Jim-P

    Jim-P Well-Known Member

    That IRS report linked to the NYtimes article is a hard read. I'm sure if I tried to read it after lunch I would fall asleep. No mention of gig economy or people working under the table, just lumps the biggest group of evaders as nonfarm proprietors.

    The IRS should tap into USPS transactions to help them identify who might need a closer look. Anyone that does substantial web-based or mail-order business doesn't waste time waiting in line at the PO. A very large number of Click-N-Ship transactions without complementing amount of capital gain indicated on Form 1040 could be a flag. And since the 1099-K includes shipping costs but doesn't show them, the USPS numbers could also be considered an offset to 1099-K Box 1 payment passthroughs.

    Not so much with coins but I sold a few new old stock antique car parts on ebay such as wheel opening moldings and body side moldings. A substantial amount of the total cost captured on the 1099-K actually went to shipping expenses. I'll still report internet sales income to the IRS, but it will be nowhere near the amount shown on the 1099-K.
     
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