F&F and IRS income limits

badcow47 said:
I would agree, but that threshold is ridiculous.
Some of the knife purchases are years old .
The cost accounting will be a bit tricky. They are focusing their efforts on the wrong segment of their tax base.
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Maybe they are not. They are simply building a list of tax-evasions, so it can be used against you at some point in time in future.
 
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sharp_edge said:
This^.

I don't think the IRS will have to manually go through the tax files they received to figure out who is not reporting if they PayPal G&S goes over $600. It perhaps takes a short and simple IRS computer program to get that done on millions of tax payers within a few seconds.
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Nothing but a blink for AI.
 
The IRS doesn’t “manually” go through returns to trigger audits. They have algorithms for it. It’s a numbers game, and they’ll go after the people failing to report the largest amount. If anyone thinks some agent with a business degree is combing through all returns to find a dude with a 1099 for $600, you’re probably still checking under the bed for the boogeyman. What they might do is send out an automated letter if they don’t match within a % basis.
 
nbp said:
Maybe.

Apparently the IRS IT systems are majorly outdated and generally don’t work very well with other. Plus a lot of people still send in their forms in paper.

www.taxpayeradvocate.irs.gov

NTA Blog: Antiquated Technology Poses Risk to Tax Administration - TAS

Here, I will discuss the desperate need for multi-year funding for IT modernization of IRS computer systems and infrastructure.
www.taxpayeradvocate.irs.gov www.taxpayeradvocate.irs.gov
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After the trillions that the gov has been wasting, I don't think that I would bet on that.
 
I obviously don’t. I’m one of the few in this thread advocating for honesty in use of PP and when filing taxes. My point was only that their systems are probably not as adept at processing millions of taxes returns per second as some above have alluded to. They’re years behind in paperwork as they are chronically understaffed and underfunded. That doesn’t mean people should be dishonest though.
 
Unless being advertised via the internet somehow, knives are a hard sell. Recently I’ve been focusing more on my firearm hobby as it doesn’t require anything internet related. Well, at least in the state I live in. Even so I don’t sell to strangers. I also have the option to deal directly with an FFL which although not profitable; is less of a hassle. I have a few nearby I built a rapport with so it’s not ALL bad. I’ll continue to enjoy the freedoms I still have as long as I can.

Personally I choose not to violate the rules by using F&F. And of course I would never ignore the 1099-K. With that my knife buying has been culled. I have more than I should anyways.
 
nbp said:
I obviously don’t. I’m one of the few in this thread advocating for honesty in use of PP and when filing taxes. My point was only that their systems are probably not as adept at processing millions of taxes returns per second as some above have alluded to. They’re years behind in paperwork as they are chronically understaffed and underfunded. That doesn’t mean people should be dishonest though.
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Are people being “dishonest” by being upset that someone is trying to take more of their hard-earned money away?
 
Paratrooper06 said:
Are people being “dishonest” by being upset that someone is trying to take more of their hard-earned money away?
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"Honest" and "Dishonest" are subjective terms that are dependent on point of view.

I'm confident King George III thought the Townshend Acts were totally honest, just, and lawful from where he sat an ocean away.
 
PeteyTwoPointOne said:
"Honest" and "Dishonest" are subjective terms that are dependent on point of view.

I'm confident King George III thought the Townshend Acts were totally honest, just, and lawful from where he sat an ocean away.
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Yep, and the 97% of people that were indifferent or outright supporters of his probably thought paying more taxes was the “honest” thing to do. Anyway, I digress and I’m going out of bounds. I’ll see myself out.
 
Paratrooper06 said:
Are people being “dishonest” by being upset that someone is trying to take more of their hard-earned money away?
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I think we all agree that the vaaaaast majority of sales of personal items in hobbies like ours are at a loss and are not subject to taxation. None of us wants to pay taxes we are not legally obligated to. However, I still want to make sure that whatever solution I choose and however I decide to use services like PP or file my taxes are within the rules and laws. My person sense of what honesty is requires me to do my best in that regard, whether I like how a business or government operates or not.

Furthermore, I like to think that my honesty with PP and with the government should be a sign to other members that I will be honest with them. When someone is quick to cheat one person or entity, it makes me wonder if they might not be willing to cheat me too. For example, I am baffled at customers of mine who try to encourage me to lower their prices by offering them “cash prices”, obviously thinking then I won’t report the income. All the while they invite me into their homes to do work. Why would you encourage someone who has access to every room of your home to be dishonest? It’s crazy to me.
 
nbp said:
I think we all agree that the vaaaaast majority of sales of personal items in hobbies like ours are at a loss and are not subject to taxation. None of us wants to pay taxes we are not legally obligated to. However, I still want to make sure that whatever solution I choose and however I decide to use services like PP or file my taxes are within the rules and laws. My person sense of what honesty is requires me to do my best in that regard, whether I like how a business or government operates or not.

Furthermore, I like to think that my honesty with PP and with the government should be a sign to other members that I will be honest with them. When someone is quick to cheat one person or entity, it makes me wonder if they might not be willing to cheat me too. For example, I am baffled at customers of mine who try to encourage me to lower their prices by offering them “cash prices”, obviously thinking then I won’t report the income. All the while they invite me into their homes to do work. Why would you encourage someone who has access to every room of your home to be dishonest? It’s crazy to me.
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So you think everyone using f&f here on the forum is suspect as far as to whether their distrust and annoyance with frivolous tax laws correlates with dishonesty in transactions here on the forum? Well, that’s a new one. If that’s the case, you’re going to be blacklisting about 90% of the members on the forum.
 
nbp said:
I think we all agree that the vaaaaast majority of sales of personal items in hobbies like ours are at a loss and are not subject to taxation. None of us wants to pay taxes we are not legally obligated to. However, I still want to make sure that whatever solution I choose and however I decide to use services like PP or file my taxes are within the rules and laws. My person sense of what honesty is requires me to do my best in that regard, whether I like how a business or government operates or not.

Furthermore, I like to think that my honesty with PP and with the government should be a sign to other members that I will be honest with them. When someone is quick to cheat one person or entity, it makes me wonder if they might not be willing to cheat me too. For example, I am baffled at customers of mine who try to encourage me to lower their prices by offering them “cash prices”, obviously thinking then I won’t report the income. All the while they invite me into their homes to do work. Why would you encourage someone who has access to every room of your home to be dishonest? It’s crazy to me.
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I don't disagree in theory but often cash price discounts are given because the seller is saving on credit card transaction fees.

I also personally only request G&S for PayPal, and there is a moral element there where I think if I'm playing with their service that I should play by their rules. That being said, I'm also a conservative, so I'm well used to simply existing in a world where I just can't choose not to do business with people and companies who aren't vocal supporters of the same things I support. PayPal isn't great or even good. But I'm not going to proselytize to other people about it or rant about people insisting on F&F payment. I suspect they'll suffer in the long run when either PayPal or the IRS catches up to them, and then I'll probably laugh a little bit, but it's not my business and not my problem what they do.
 
madcap_magician said:
But I'm not going to proselytize to other people about it or rant about people insisting on F&F payment. I suspect they'll suffer in the long run when either PayPal or the IRS catches up to them, and then I'll probably laugh a little bit, but it's not my business and not my problem what they do.
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I don’t dabble in schadenfreude on this matter. Selling a few knives for the enjoyment of this hobby isn’t exactly under-the-table six-figure income. If people can avoid paying double taxes on a few knives a year, I won’t laugh about it if the IRS hammers them.
 
tokerblue said:
The government is always looking for money. I just can't imagine them wasting their time on the average person. Even if the average person sold $2000 worth of goods, how much of that would be income? Even if they made a decent profit of $1000, the taxable income of that isn't worth the few hours of an IRS agent's time or salary. They're currently so short staffed and backlogged that I can't imagine they'll be able to do this any time in the near future.

I filed for an extension last year and it still took almost 6 months for the IRS to send me my refund.
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Then why did they set the limit so low at $600 before a 1099K is triggered? If they really weren't concerned about the "average person" then they would set the limit at a more reasonable say $5000 or even $10,000.
 
ToxicBot11 said:
Then why did they set the limit so low at $600 before a 1099K is triggered? If they really weren't concerned about the "average person" then they would set the limit at a more reasonable say $5000 or even $10,000.
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It's so they "can" get involved in everyone's finances at any time. Doesn't mean they'll spend resources on every single person.
 
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