Save all your receipts! Biden's garage sales tax kicks in next year.

[Stokely]

Reverb (which is like ebay specifically for musical items) has been sending sellers a 1099 for the past year.

As mentioned, it's for profits. So you buy some gear for $2000 and sell for $1500, you shouldn't end up paying anything.

Again it's kind of sticky if like me you bought something via CL with cash, and then might want to re-sell it. I didn't think to get a receipt--those sales are all as-is, and final, so normally what good would a receipt be... Thankfully I freaking HATE selling stuff and try my best not to do it. Facebook Marketplace--like Craigslist-- is full of scammers, lowballers and just plain weirdos. I state "Lowball offers will be ignored" and immediately get a 1-word reply with a very low-ball offer in it...like WTF dude.

 

[GodisanAtheist]

No it’s not onerous and you wouldn’t need a receipt, only a reasonable approximation of the cost.

This is such a total non-issue.

-Ultinately the onus is on the individual to provide a reasonable approximation of the cost of all items they've sold used through eBay (presumably anywhere?) in the event of a random audit yes?

This sort of smacks of the "industry build on a regulation" thing. I guess eBay will start charging sellers for tax services to simplify their situation in the event of an audit and make some extra money on that front.

 

[fskimospy]

-Ultinately the onus is on the individual to provide a reasonable approximation of the cost of all items they've sold used through eBay (presumably anywhere?) in the event of a random audit yes?

This sort of smacks of the "industry build on a regulation" thing. I guess eBay will start charging sellers for tax services to simplify their situation in the event of an audit and make some extra money on that front.

If you are selling large quantities of items through eBay this is clearly a sales business and so there’s no reason why you shouldn’t have to pay taxes like a regular business would. If you aren’t selling large quantities of items then compliance is easy.

This is all common sense. Why should people running a business through eBay get special privileges?

 

[GodisanAtheist]

If you are selling large quantities of items through eBay this is clearly a sales business and so there’s no reason why you shouldn’t have to pay taxes like a regular business would. If you aren’t selling large quantities of items then compliance is easy.

This is all common sense. Why should people running a business through eBay get special privileges?

- $600 in profits tho? I agree with the majority of your premise, it just doesn't line up with the threshold.

And putting the work to justify or prove income back on the individual is seriously dickish.

Going after billionaires for taxes is hard cause they write the law and have armies of lawyers to challenge the IRS. Going after Joe Fuckwad's eBay business is easier cause he ain't gonna put up the fight.

Generally people that make a lot and a little money get audited with middle income earners being the least likely to be audited (although odds of being audited are still absurdly low) in any situation. There will definitely be people who claimed EITC who also resell to make ends meet getting hurt by this.

 

[fskimospy]

- $600 in profits tho? I agree with the majority of your premise, it just doesn't line up with the threshold.

And putting the work to justify or prove income back on the individual is seriously dickish.

Going after billionaires for taxes is hard cause they write the law and have armies of lawyers to challenge the IRS. Going after Joe Fuckwad's eBay business is easier cause he ain't gonna put up the fight.

Generally people that make a lot and a little money get audited with middle income earners being the least likely to be audited (although odds of being audited are still absurdly low) in any situation. There will definitely be people who claimed EITC who also resell to make ends meet getting hurt by this.

If you aren’t asking people to justify or prove income then you are calling for all sellers on eBay to enter into some sort of national registry, for which compliance would be way way more onerous.

Nobody is getting audited into poverty over this, it’s just an absolutely reasonable and justified attempt to make people running a business through eBay to play by the same rules as someone running a business next door. It’s a great thing that we should all support.

 

[brycejones]

- $600 in profits tho? I agree with the majority of your premise, it just doesn't line up with the threshold.

And putting the work to justify or prove income back on the individual is seriously dickish.

Going after billionaires for taxes is hard cause they write the law and have armies of lawyers to challenge the IRS. Going after Joe Fuckwad's eBay business is easier cause he ain't gonna put up the fight.

Generally people that make a lot and a little money get audited with middle income earners being the least likely to be audited (although odds of being audited are still absurdly low) in any situation. There will definitely be people who claimed EITC who also resell to make ends meet getting hurt by this.

Pretty sure the $600 amount is the standard amount at which a business has to issue a 1099 to an individual. Frankly it seems more like a clarification that 1099 issuances need to be consistent.

 

[jmagg]

Massive inflation has caused used goods on the secondary market to be more valuable. The money used to buy new goods had been income taxed, then sales tax paid on items. This has caused used items to hold or even increase in value. Not sure if income taxing profits on used goods, that have held their value or increased in value should be taxed.

 

[brycejones]

Massive inflation has caused used goods on the secondary market to be more valuable. The money used to buy new goods had been income taxed, then sales tax paid on items. This has caused used items to hold or even increase in value. Not sure if income taxing profits on used goods, that have held their value or increased in value should be taxed.

selling something for more than you paid for it is…….INCOME….

 

[fskimospy]

This thread is sort of funny in that it’s basically people trying to justify why income from internet sales shouldn’t be taxed while they agree income from physical sales should be.

 

[[DHT]Osiris]

This thread is funny because it shows who doesn’t know how taxes work. It’s similar to those people who say getting a raise is bad because it puts you in a higher tax bracket.

Well done, @positivedoppler

This is literally a tax on grifters, upsellers, and scalpers. This should be celebrated. Govt can't do anything right I guess.

 

[repoman0]

Man I wish I didn’t have to pay tax on those used stock shares and bonds when I sell them on the secondary garage sale market at vanguard. Even worse that I have to track my original basis and tell the government about it.

 

[positivedoppler]

This thread is sort of funny in that it’s basically people trying to justify why income from internet sales shouldn’t be taxed while they agree income from physical sales should be.

You're assumption is wrong. The thread does not advocate not paying income tax, it even states " save all your receipts!" because how else do you prove the original purchase price of your used goods. Biden and the dems are once again going after the little guys. Actual business on ebay probably dont care since legit businesses already itemize everything and has everything documented. This impacts the used market or essentially folks running a garage sale on ebay. $600 is a joke, just look at for sale forums here. Is everyone on the fs/ft forum "grifters, upsellers, and scalpers? "

 

[brycejones]

You're assumption is wrong. The thread does not advocate not paying income tax, it even states " save all your receipts!" because how else do you prove the original purchase price of your used goods. Biden and the dems are once again going after the little guys. Actual business on ebay probably dont care since legit businesses already itemize everything and has everything documented. This impacts the used market or essentially folks running a garage sale on ebay. $600 is a joke, just look atcor sale forums here.

$600 is not a joke. When I used to do some independent work for builders they had to cut me a 1099 if they paid more than $600 in a year. $600 was not just a number picked out of thin air for this initiative.

 

[fskimospy]

You're assumption is wrong. The thread does not advocate not paying income tax, it even states " save all your receipts!" because how else do you prove the original purchase price of your used goods. Biden and the dems are once again going after the little guys. Actual business on ebay probably dont care since legit businesses already itemize everything and has everything documented. This impacts the used market or essentially folks running a garage sale on ebay. $600 is a joke, just look at for sale forums here. Is everyone on the fs/ft forum "grifters, upsellers, and scalpers? "

If you are paying the appropriate income tax then you’re going to be absolutely fine. Glad we agree.

 

[positivedoppler]

$600 is not a joke. When I used to do some independent work for builders they had to cut me a 1099 if they paid more than $600 in a year. $600 was not just a number picked out of thin air for this initiative.

That $600 is fine for business but its absolute nonesense for the used market. Selling a 3y old gpu like the 3080 ti alone will hit the limit. Unless you saved that craigslist text msg from 2 years ago that states " agree to buy it for $900" or probably higher during ghe cryoto boom.

 

[positivedoppler]

If you are paying the appropriate income tax then you’re going to be absolutely fine. Glad we agree.

That was never the scenario brought up on the title or the op. I dont even know why so many people decided to go there. This is specific to none business folks running a garage sale in ebay, especially computer hardware. I thought that was clear enough in the thread title an original post.

 

[Brainonska511]

That $600 is fine for business but its absolute nonesense for the used market. Selling a 3y old gpu like the 3080 ti alone will hit the limit. Unless you saved that craigslist text msg from 2 years ago that states " agree to buy it for $900" or probably higher during ghe cryoto boom.

What to do with Form 1099-K | Internal Revenue Service

Use Form 1099-K with your other records to help figure and report your correct income on your tax return. Find out what to do if the form is incorrect or if you shouldn’t have received it.

www.irs.gov

Perhaps the directions will help you out here. The last time I looked into this, it said nothing about keeping receipts or whatever.

And if you sell something for a gain, congratulations, you generated real income, so pay up.

 

[brycejones]

That $600 is fine for business but its absolute nonesense for the used market. Selling a 3y old gpu like the 3080 ti alone will hit the limit. Unless you saved that craigslist text msg from 2 years ago that states " agree to buy it for $900" or probably higher during ghe cryoto boom.

Well to be blunt the tax code of the United States doesn’t care about your feelings and doesn’t distinguish between new and used goods for purposes of resale. I already told where the $600 figure came from and it’s a long established part of the code.

 

[brycejones]

Is this any different than gamblers who get 1099s and then have to keep information about their losses to determine the tax owed?

 

[Zorba]

Yeah I'm not all aboard the "tax all the things" train here.

A $600 used item sale on eBay should not be taxed. If it's a new sale then *maybe* but the cap shouldn't be so low.

The idea that a person will be taxed for income on goods that they presumably have purchased with income that has already been taxed is a bit much.

It really feeds into the idea that Dems/Liberals want to take the little guy's money.

Technically, you are already supposed to be paying taxes on any profit. The only thing this changes is that eBay has to report it. The tax would only be on profit, i.e. new money, not the previous taxed money.

 

[Zorba]

This thread is sort of funny in that it’s basically people trying to justify why income from internet sales shouldn’t be taxed while they agree income from physical sales should be.

Not that long ago we had the same debates about online sales tax. Why you shouldn't have to pay sales tax to Amazon but have to to Best Buy.

 

[Lost_in_the_HTTP]

This is nothing new. The $600 to trigger a 1099 has been around for years and the Bay place has been sending them out all along. People that sell on multiple sites like Etsy and Bonanza may get multiple 1099s.


They're simply helping you document what you should already be reporting.

 

[Lost_in_the_HTTP]

You're assumption is wrong. The thread does not advocate not paying income tax, it even states " save all your receipts!" because how else do you prove the original purchase price of your used goods. Biden and the dems are once again going after the little guys. Actual business on ebay probably dont care since legit businesses already itemize everything and has everything documented. This impacts the used market or essentially folks running a garage sale on ebay. $600 is a joke, just look at for sale forums here. Is everyone on the fs/ft forum "grifters, upsellers, and scalpers? "

Again, this is nothing new. It's been in effect for many years.

 

[Lost_in_the_HTTP]

That was never the scenario brought up on the title or the op. I dont even know why so many people decided to go there. This is specific to none business folks running a garage sale in ebay, especially computer hardware. I thought that was clear enough in the thread title an original post.

No, it isn't. Not even close.

I'm in a program with Amazon that sends out items to be reviewed. They assign a fair market value to each item and if you receive more than $600 worth in a single year, you get a 1099. It's simply a standard IRS requirement for any non-employment related income over $600



The 1099 was established in 1917.

Form 1099 - Wikipedia

en.wikipedia.org

Joe was born in 1942. OP is blaming him for something that was created 25 years before he was born.

 

[Lost_in_the_HTTP]

"Note: It’s important to remember that these changes do not modify the tax law regarding income reporting. The IRS expects taxpayers to report all taxable income remains taxable regardless of whether a Form 1099-K is issued."

"However, the IRS says, “the casual sale of goods and services, including selling used personal items like clothing and furniture at a loss, could generate a Form 1099-K for many people, even if the seller has no tax liability from those sales.”"


And for those above who think $600 is too low, the plan is to go to $5,000 by next year:

"

IRS 1099-K delay: What happens next?​

The IRS will treat 2023 as a transition year.

• For the 2024 tax year (returns normally filed in early 2025), the agency says it’s planning a $5,000 1099-K reporting threshold.
• The $5,000 number is seen as a phase-in to implementing the $600 reporting threshold enacted in the American Rescue Plan.
• The IRS will also change Form 1040 to make the 1099-K reporting process more straightforward.

"The IRS will use this additional time to continue carefully crafting a way forward to minimize burden," Werfel said in a release, adding, "We want to make this as easy as possible for taxpayers.”

The agency says that the eventual change in the 1099-K reporting threshold can increase tax compliance, but the process must be managed carefully to ensure taxpayers know what to do with the forms."

Another IRS 1099-K Tax Change for Online Sellers

The IRS is delaying a 2023 1099-K tax reporting requirement for third-party payment networks like PayPal and Venmo, online marketplaces like Etsy and eBay, and millions of online sellers.

www.kiplinger.com