How will the new 1099 limit change the buyer / seller platform on Ebay?
Mizzou
Posts: 529 ✭✭✭✭
I know, I know it shouldn't make any difference if you pay your taxes anyway. However, we all know that just doesn't happen in many instances.
So my question is, what will be the after effects of the new 1099 limit of $600 which starts 1/1/22?
My guess is that a large number of small time sellers will simply close up shop on Ebay and use other venue's such as garage sales, flea markets...I can't imagine the new $600 limit encouraging more sellers to the market place. If this happens, will the remaining sellers raise, lower or keep their prices the same.
Wisdom has been chasing you but, you've always been faster
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It will most likely be a pain in the butt for occasional sellers that are selling personal items they are no longer interested in and are most likely selling for less than they paid for them.
Will the IRS send notices to folks who don't claim $600 (or more) somewhere on their tax returns? It's going to be interesting to see what happens.
it's crackers to slip a rozzer the dropsy in snide
Depends on what buyers are willing to pay.
No wait a second, we were told that if you make less than 400k your taxes would not go up a dime. Lied to again huh !
So what if I live in a state that does not tax coin and bullion sales. 1099's are a problem if you ask me.
If you think about it, most small businesses on average, do not start turning a profit until as late as the third year. If a majority of sellers decided to stay and declare losses as a small business on Ebay, this could blow up in the government's face.
Wisdom has been chasing you but, you've always been faster
If your taxes go up only because you weren’t paying them previously, that isn’t your taxes going up. Besides, there is federal tax on the gains from coin and bullion sales even if you don’t have a state tax. The 1099 hasn’t changed anything.
For most seller it will change nothing to sell
You're making this statement with the assumption that sellers were reporting all Ebay income under $2000 - And we all know that just didn't happen
Wisdom has been chasing you but, you've always been faster
We don't pay sales tax on coins in my state. So I assume a 1099 would not be generated. With that said if I get that 1099 by mistake then I'll have to defend myself guilty until proven innocent.
He was making that statement based on a previous post that claimed taxes were being raised.
Amazing what happens when you ignore everything said right before that. I have no sympathy for people who owed and didn’t pay taxes before and now can’t get around them.
Sales tax and income tax are completely unrelated. And if you get a 1099 for something whose sale doesn’t incur income tax in your state, it’s still no taxable. It is most definitely taxable at the federal level, and if you don’t pay it, you aren’t guilty until proven innocent, you’re just guilty.
1099s have nothing to do with sales tax. You understand that sales taxes and income taxes are different things, right?
I am confused but not guilty of evasion. Coins I've sold in the past were subject to gains only over 10k.
@airplanenut - You're absolutely correct, the 1099 hasn't changed anything however, the new limit for receiving a 1099 changes everything.
Wisdom has been chasing you but, you've always been faster
Accountants are excited for the coming work. There will be total confusion for many small sellers when this hits.
Successful BST with drddm, BustDMs, Pnies20, lkeigwin, pursuitofliberty, Bullsitter, felinfoel, SPalladino
$5 Type Set https://www.pcgs.com/setregistry/u-s-coins/type-sets/half-eagle-type-set-circulation-strikes-1795-1929/album/344192
CBH Set https://www.pcgs.com/setregistry/everyman-collections/everyman-half-dollars/everyman-capped-bust-half-dollars-1807-1839/album/345572
On eBay? Most coins aren't rare and for the few that are, these are not the kinds of things that occasional, small-time sellers sell. Nobody will even notice.
I guess if I have to hire an advisor it would be noted that my losses would exceed my gains anyway.
Do I care what criminals do in response? Those little sellers can all disappear and you won't notice any difference.
The 1099 applies to income tax not sales tax. It should definitely be issued.
Being in business for themselves, it'll be good for them to experience what regular businesses have always had to deal with. Don't you think?
It doesn't just affect coin sales, it's anything you sell that total's more than $600 combined. Clothes, pocket knives...
Wisdom has been chasing you but, you've always been faster
This is the solution to the issue -
Wisdom has been chasing you but, you've always been faster
Of course that's so. My reply was based on this being a coin forum, not one for clothes or pocket knives.
The largest change for current sellers NOT paying income taxes will be that they will be paying income taxes next year and will be reported by ebay and paypal. The second largest change for those ebayers will be keeping records, as ebay no longer keeps sellers records past 90 days. I have read their are ways to find seller records for two years under seller preferences but could not find it. Record keeping, while a normal practice for most sellers here, are not a common practice for the majority of ebay part timers and will become a must.
I would imagine yard sales will boom for non collecting items next year. lol
Jim
When a man who is honestly mistaken hears the truth, he will either quit being mistaken or cease to be honest....Abraham Lincoln
Patriotism is supporting your country all the time, and your government when it deserves it.....Mark Twain
this is not a new tax. It is the IRS's new way of ensuring that you pay an existing tax.
State exemption for bullion is limited to paying sales tax. It has no affect on the taxes you pay on the profit from your sales.
Repetition of ignorance is ignorance raised to the power two.
I get that, it's just that many small time sellers have a variety of goods for sell, not just coins.
Wisdom has been chasing you but, you've always been faster
the 1099 reports your income from the sale of coins. It has nothing to do with the sales tax exemption your state gives you when you buy coins.
Repetition of ignorance is ignorance raised to the power two.
only if you have been not been paying taxes that were due on your income. This is the reason the IRS started the 1099s, to flush out non-payers. Unfortunately they burden the businesses and payment processors with the job of tracking and issuing the info on the 1099.
Repetition of ignorance is ignorance raised to the power two.
You can pull monthly reports for a couple of years
and sales ...
as opposed to what it used to be .... the 60 day only BS
One fantastic change that eBay made is being able to go back and see information for a few years
They've made a lot of good improvements. Fees are lower. The ebay shipping options are a tremendously good deal, especially the first class letter.
I have always done my my tax reporting from reports and information generated on PayPal, which was always hard to find, but there at least.
This will be a transition year, with the new eBay reports. We will see in a couple months when I get my paperwork ready for my CPA.
Do I understand that if I buy something that's preowned on ebay for $600 dollars I will get taxed and when I sell that item on ebay for $600 that item will be taxed and if that buyer sells the same item for $600 it will be taxed... so technically that item could be taxed a hundred times, every time it is bought or sold? That's a nice racket! I'd like to get in on that action!
If you paid $600 for an item and then sold it for $600 no taxes should be owed. Same for future purchaser/sellers. That's why records are so important. Keep records of s/h costs, supply expenses and any associated expenses, suchas postage, trips to PO, UPS or FedEx. Many will find that they have lost money for several years and to have never known it.
Jim
When a man who is honestly mistaken hears the truth, he will either quit being mistaken or cease to be honest....Abraham Lincoln
Patriotism is supporting your country all the time, and your government when it deserves it.....Mark Twain
You get taxed on the profit. 1099s report the income. It is up the taxpayer to reduce that gross income with expenses before arriving at the taxable amount.
It has always been commonplace for a dollar to get taxed over and over each time it is earned and spent. Yes, it is a nice racket and why the government likes to see money change hands often (known as money velocity).
Repetition of ignorance is ignorance raised to the power two.
Consult your tax Acct.
As an eBay seller one needs file sch c. Otherwise the tax man considers your sales entirely taxable.
Get a copy of sch c and it’s instructions.
Keep copies of all support for sch c.
It will be interesting to see how people prove actual cost of items. I have never been given a receipt at a coin show.
Successful BST with drddm, BustDMs, Pnies20, lkeigwin, pursuitofliberty, Bullsitter, felinfoel, SPalladino
$5 Type Set https://www.pcgs.com/setregistry/u-s-coins/type-sets/half-eagle-type-set-circulation-strikes-1795-1929/album/344192
CBH Set https://www.pcgs.com/setregistry/everyman-collections/everyman-half-dollars/everyman-capped-bust-half-dollars-1807-1839/album/345572
Yes, you have to kind of force the issue a bit but so far none of the dealers I have bought from have said no. I haven’t bothered with low end bullion album level material, though.
The problem, as I see it, is for the truly casual person who is not running a side business who may be selling something obtained many years ago and doesn’t have the receipt. My understanding is you can probably claim the original retail price without too much fuss but the record keeping problem is a real problem for the casual person selling who is not a business. Ignorance of the law is not an excuse but at the same time changing (effectively retroactively) the rules is also problematic.
What remains to be seen is how this will be enforced and managed over the next few years and any future modifications made to the policies.
Same applies to any retail transaction. Buy it at a coin store, sell it at a flea market, etc.
IT HAS NOTHING TO DO WITH EBAY.
That's because most of those SOBs are tax evaders. I hope the state and federal tax people crack down in coin shows next.
No income taxes. You would have sales tax on all retail sales.
Of course sales tax(per state), I thought we were speaking of the new 1099's for income tax laws going into effect next year. My bad.
Jim
When a man who is honestly mistaken hears the truth, he will either quit being mistaken or cease to be honest....Abraham Lincoln
Patriotism is supporting your country all the time, and your government when it deserves it.....Mark Twain
We originally were. It now appears to be degenerating into general grousing about taxes.
If one is selling goods, it is their responsibility to conform to the law (IRS). I do not sell coins or any other products. Well, I do sell my skills, talents and abilities... But the payment is in the form of a paycheck with all the required deductions. If I do decide, at some point, to sell possessions, I will certainly keep records and report income. Just the way I am.... Cheers, RickO