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Sell on ebay? The $20,000 IRS reporting threshold is now been lowered to $600

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  • davewesendavewesen Posts: 6,691 ✭✭✭✭✭

    it is time to turn hobby and garage sale losses into Sch C losses

  • djmdjm Posts: 1,565 ✭✭✭✭✭

    If you don't want to pay taxes on the money there is a simple legal solution to the problem:

    Simply open an IRA or SEP-IRA and put the profits from your online selling their and take the adjustment to your gross income.

  • cameonut2011cameonut2011 Posts: 10,181 ✭✭✭✭✭

    Surprise!

  • WQuarterFreddieWQuarterFreddie Posts: 3,032 ✭✭✭✭✭

    @djm said:
    If you don't want to pay taxes on the money there is a simple legal solution to the problem:

    Simply open an IRA or SEP-IRA and put the profits from your online selling their and take the adjustment to your gross income.

    Wait...What? Wouldn't this just be delaying the inevitable? Pretty sure you still have to pay the taxes when you withdraw the money back out of the IRA....

  • djmdjm Posts: 1,565 ✭✭✭✭✭

    @WQuarterFreddie said:

    @djm said:
    If you don't want to pay taxes on the money there is a simple legal solution to the problem:

    Simply open an IRA or SEP-IRA and put the profits from your online selling their and take the adjustment to your gross income.

    Wait...What? Wouldn't this just be delaying the inevitable? Pretty sure you still have to pay the taxes when you withdraw the money back out of the IRA....

    If you do it right the beneficiary of the IRA pays the taxes. If you only take MRD you can get close to no taxes if you no have no other income.

  • SoFloSoFlo Posts: 542 ✭✭✭✭
    edited March 15, 2021 6:08PM

    You have to pass the bill to find out what's in it

    Wisdom has been chasing you but, you've always been faster

  • jmlanzafjmlanzaf Posts: 36,855 ✭✭✭✭✭

    @Mizzou said:

    @jmlanzaf said:
    Not in my experience. The IRS listens to reason. >

    You're joking right?

    No. Not at all.

    Every interaction I've had with them was very reasonable.

    All comments reflect the opinion of the author, evn when irrefutably accurate.

  • daltexdaltex Posts: 3,486 ✭✭✭✭✭

    @jmlanzaf said:

    @JimTyler said:

    @jmlanzaf said:

    @JimTyler said:
    it’s low earners that won’t be able to cheat on their taxes meanwhile the millionaires can continue their tax loopholes. It’s kinda like what my wife says when I drive 5 or 10 miles an hour over the speed limit and someone goes racing by. She tells me I’m the guy the cop can catch. Easier to catch those $600 guys not worth hiring a lawyer than the millionaires who can tie you up in court forever.

    And yet millionaires pay the most taxes and get audited most frequently.

    You don’t know that someone told you that. I’m certain as a percentage of real income they do just fine.

    The only time they seem to pay less is when their income is largely due to long term capital gains. This is for two reasons: lower long-term capital gains rates and no FICA/Medicare taxes on investment earnings. However, this "loophole" does not apply to the rich, it applies to everyone. If you are retired with only SS and 401k income, you also have a much lower tax bill than a working stiff in the SAME tax bracket.

    And don't forget that almost half of all wage earners pay zero income tax.

    Yeah, you might not, but people making more than $250,000 pay 3.8% Medicare tax on investment income. That comes from Obamacare.

  • jmlanzafjmlanzaf Posts: 36,855 ✭✭✭✭✭

    @daltex said:

    @jmlanzaf said:

    @JimTyler said:

    @jmlanzaf said:

    @JimTyler said:
    it’s low earners that won’t be able to cheat on their taxes meanwhile the millionaires can continue their tax loopholes. It’s kinda like what my wife says when I drive 5 or 10 miles an hour over the speed limit and someone goes racing by. She tells me I’m the guy the cop can catch. Easier to catch those $600 guys not worth hiring a lawyer than the millionaires who can tie you up in court forever.

    And yet millionaires pay the most taxes and get audited most frequently.

    You don’t know that someone told you that. I’m certain as a percentage of real income they do just fine.

    The only time they seem to pay less is when their income is largely due to long term capital gains. This is for two reasons: lower long-term capital gains rates and no FICA/Medicare taxes on investment earnings. However, this "loophole" does not apply to the rich, it applies to everyone. If you are retired with only SS and 401k income, you also have a much lower tax bill than a working stiff in the SAME tax bracket.

    And don't forget that almost half of all wage earners pay zero income tax.

    Yeah, you might not, but people making more than $250,000 pay 3.8% Medicare tax on investment income. That comes from Obamacare.

    Ok, but still far less than the tax on wages which is double that or the self employment tax which is four times that.

    All comments reflect the opinion of the author, evn when irrefutably accurate.

  • kiyotekiyote Posts: 5,588 ✭✭✭✭✭

    It’s all so confusing. As a little guy I will just pay my tax bill as asked.. we’ve always done that.

    "I'll split the atom! I am the fifth dimension! I am the eighth wonder of the world!" -Gef the talking mongoose.
  • AUandAGAUandAG Posts: 24,943 ✭✭✭✭✭

    Has the 200 in transaction been eliminated or is it now $600 + 200 transactions?

    bob ;)

    Registry: CC lowballs (boblindstrom), bobinvegas1989@yahoo.com
  • DelawareDoonsDelawareDoons Posts: 3,413 ✭✭✭✭✭

    @AUandAG said:
    Has the 200 in transaction been eliminated or is it now $600 + 200 transactions?

    bob ;)

    Eliminated.

    "It's like God, Family, Country, except Sticker, Plastic, Coin."

  • CoinPhysicistCoinPhysicist Posts: 603 ✭✭✭✭
    edited March 16, 2021 8:13AM

    I report all my profits on my schedule C and pay the taxes I should. But screw this. Once this becomes law, I will not longer be accepting anything but checks, cash, money orders, and zelle for anyone who wants to do a digital transaction.

    Successful transactions with: wondercoin, Tetromibi, PerryHall, PlatinumDuck, JohnMaben/Pegasus Coin & Jewelry, CoinFlip, and coinlieutenant.

  • jmlanzafjmlanzaf Posts: 36,855 ✭✭✭✭✭

    @CoinPhysicist said:
    I report all my profits on my schedule C and pay the taxes I should. But screw this. Once this becomes law, I will not longer be accepting anything but checks, cash, money orders, and zelle for anyone who wants to do a digital transaction.

    If you are reporting everything, I'm not sure why you care if they 1099 you. ???

    All comments reflect the opinion of the author, evn when irrefutably accurate.

  • DavideoDavideo Posts: 1,363 ✭✭✭✭

    @kiyote said:
    It’s all so confusing. As a little guy I will just pay my tax bill as asked.. we’ve always done that.

    Who is asking you to pay your tax bill? Unless you are referring to an accountant, taxes don't work this way. For example, in this scenario, eBay could send you a 1099, but there isn't any sort of bill associated with it for how much actually owe in taxes, if any.

  • jmlanzafjmlanzaf Posts: 36,855 ✭✭✭✭✭

    @djm said:

    @WQuarterFreddie said:

    @djm said:
    If you don't want to pay taxes on the money there is a simple legal solution to the problem:

    Simply open an IRA or SEP-IRA and put the profits from your online selling their and take the adjustment to your gross income.

    Wait...What? Wouldn't this just be delaying the inevitable? Pretty sure you still have to pay the taxes when you withdraw the money back out of the IRA....

    If you do it right the beneficiary of the IRA pays the taxes. If you only take MRD you can get close to no taxes if you no have no other income.

    Yes, people really don't understand this. It needs to be considered when people are choosing between a Roth IRA and an IRA.

    The IRA is deductible in your current tax bracket on the LAST dollars earned, let's say 24%. If you are in your prime earning years, you are maximizing the deduction. Unless you are incredibly wealthy, your withdrawals START at 0% and then 10% and 12%, so your taxes are on your first dollars earned.

    [This, of course, assumes you don't begin withdrawals while you are still working.]

    All comments reflect the opinion of the author, evn when irrefutably accurate.

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