New eBay tax reporting requirements.

[Old Folder]

Thought I would pass on the below eBay news alert to all AAPK members. I know there are many members her that sell on eBay.
I have not sold on eBay for many years, though I have been a member since Sept. 1995.
I read the below alert concerning the new eBay tax reporting structure beginning on Jan. 1, 2022.


"eBay Announces Mandatory Collection of Social Security Numbers."

eBay announced on Dec. 20 that the online marketplace will be required to collect Social Security numbers — or Individual Tax Identification numbers — from all sellers who sell product (over the course of the year) worth more than $600.

Effective Jan. 1, 2022, eBay sellers will receive a 1099-K if they sell at least $600 of goods through the e-commerce platform in 2022, with no minimum transaction level. This is down from the current income threshold to be issued a 1099-K by eBay, which stood at $20,000 in annual sales with a minimum of 200 transactions. This may impact the 2022 tax return filed in 2023.
Once the $600 threshold in annual sales is reached, eBay will require sellers to provide their full 9-digit Social Security number or Individual Tax Identification Number before they can continue to sell on the platform. Failure to provide this information will result in payouts being put on hold and the ability to list on the platform may be restricted. eBay may also deduct backup withholding from future payouts.
This change comes after President Biden signed the American Rescue Plan Act of 2021 back in March. This new tax reporting law is part of IRS efforts to streamline 1099 reporting and tax compliance.

However, not every transaction will be taxable. In most cases, a taxable event will not occur if an item is sold for less than what the seller originally paid. For example, if you bought an item for $500 the previous year and then sold it online for $250, it’s unlikely that you will be subject to income tax. Nonetheless, it is wise to keep receipts for anything purchased which you may later consider selling on eBay.

eBay encourages sellers to talk to a tax professional to determine whether they have taxable income, and to determine how to report amounts listed on their 1099-K. Not properly reporting earned income could cause your return to understate your tax liability. In this case, the IRS may impose a penalty equal to 20% of your underpayment, according to TurboTax."

Dan

[cody6268]

I said this over on another forum, and I'll say it again here.

I am willing to bet that the lower threshold was the brainchild of politicians that eBay and PayPal likely contributed to heavily. They ended up shooting themselves in the foot. I am sure that made a major headache for many aside from those who do, in fact, sell as a business. I am sure those who are just clearing out, selling as a hobby, or to help support a hobby will end up abandoning eBay. $600 isn't a whole lot of money at all. This threw a wrench in my getting the majority of about 500-600 model cars I have in the outbuilding (at least 400 or so) most of which haven't seen the light of day in 4-5 years.

a taxable event will not occur if an item is sold for less than what the seller originally paid. For example, if you bought an item for $500 the previous year and then sold it online for $250, it’s unlikely that you will be subject to income tax.

Aside for the purpose of warranties to things like computers, appliances, or TVs; I rarely keep the receipts to anything. Neither to most people. And if I get rid of them, it's usually the county dump as they no longer work. And for junk most people are getting rid of, they don't either. It's just not that practical.

For all but a handful, I know I paid a dollar. And that's true because that's what they've sold for like forever. But then the IRS would say I didn't.

[tongueriver]

I think that there will be enough backlash that at some point in the future this regulation will be reversed. In the meantime, my plans on moving some several hundred knives will not happen on that venue. $600 isn't even candy money. Bah; humbug.

[Bladeaholic]

I doubt this will be reversed. This administration is all about TAX, TAX, and more Tax, and once it's in place it will be hard to get rid of. That's a huge drop from $20,000 down to $600.00. Seems they are out to bleed the little man dry. Keep your receipts and be prepared to do more tax prep. or as stated move to another venue.

[1967redrider]

Asleep at the wheel.

[srm65]

What do you all think PayPal's position will be? Thoughts

[robpa]

Well, if ya have to claim income, ya get to claim xpenses. The govt pulled that with me and horses so, I lost money every year for 20 years which gave me a break on my earned income. Office, gasoline, vehicle depreciation, etc., etc. Play their game.