• The rules for The Exchange can be found here. Please read and follow them.

Bad Paypal 1099

sharp_edge

Gold Member
Feedback: 61 / 0 / 0
Joined
Jul 30, 2015
Messages
4,960
For me it's all about the hassle. Selling and shipping is enough of a hassle on it's own without having to keep track of receipts and do extra work when filing taxes. It really sucks the fun out of things. It will likely impact my potential buying too.

I don't think we are just a blind spot either. The government wants to collect money on ALL income or they wouldn't have set the threshold so low. They don't care how much extra work it is for you to report it correctly or for someone else to enforce it because you're paying for that too.

Exactly my thinking.
 

PeteyTwoPointOne

Platinum Member
Feedback: 574 / 0 / 0
Joined
Jun 10, 2014
Messages
7,045
Although it's not 100% solely their fault, I'm hoping RaidPal, Venless, AppleTrash, et. al. get kicked in the balls so hard from lost revenue this year that they hire an army of high dollar hot-shot lobbyists to repeal this new law...talk about yer repressive economic tax policy!
 

Gastonknife

Gold Member
Feedback: 82 / 0 / 0
Joined
Dec 15, 2008
Messages
1,830
Although it's not 100% solely their fault, I'm hoping RaidPal, Venless, AppleTrash, et. al. get kicked in the balls so hard from lost revenue this year that they hire an army of high dollar hot-shot lobbyists to repeal this new law...talk about yer repressive economic tax policy!

Let's not forget that we can also exercise how we vote. If you do not like this new law, remember who came up with it.
 

Heirphoto

Gold Member
Feedback: 61 / 0 / 0
Joined
Jun 13, 2007
Messages
1,353
Could you post links to those Toutube CPA/ebay seller videos you mentioned before, please. Thanks
The content creator is Not Your Dad's CPA on Youtube. He is a CPA and an eBay reseller. Don't want to post the link itself as I am not 100% sure he is correct but all of his videos deal with things we all face as 'resellers".
 
Feedback: 0 / 0 / 0
Joined
Jul 31, 2017
Messages
1,165
The content creator is Not Your Dad's CPA on Youtube. He is a CPA and an eBay reseller. Don't want to post the link itself as I am not 100% sure he is correct but all of his videos deal with things we all face as 'resellers".
Thanks for sharing the info, I really appreciate it.
 

Gastonknife

Gold Member
Feedback: 82 / 0 / 0
Joined
Dec 15, 2008
Messages
1,830
According to CNBC it sounds like we need not worry


I believe you are misreading it - We need to worry. Goods and services falls into this.

The article you note is focusing on Friends/Family type payments.
 

Random Dan

Gold Member
Feedback: 31 / 0 / 0
Joined
Jan 21, 2012
Messages
1,581
I believe you are misreading it - We need to worry. Goods and services falls into this.

The article you note is focusing on Friends/Family type payments.
The article doesn't mention the distinction between GS and FF paypal options.

When they say "commercial payments" does that mean GS you think? I wouldn't have thought reselling things as commercial but maybe that is what they mean.
 

Blues

hovering overhead
Staff member
Super Mod
Feedback: 25 / 0 / 0
Joined
Oct 2, 1998
Messages
26,930
Commercial involves buying / selling.

F&F involves sending money to someone you know...and is not buying / selling (commerce). (In theory.)
 

Random Dan

Gold Member
Feedback: 31 / 0 / 0
Joined
Jan 21, 2012
Messages
1,581
Ok so for paypal they could say GS = commercial, FF = noncommercial, but what about the other services that don't make the distinction? If I split rent with someone using venmo or zelle, how does the IRS know those aren't business transactions?
 

Docscoot

Gold Member
Feedback: 9 / 0 / 0
Joined
Nov 28, 2021
Messages
265
We need a blade forums parking lot swap meet 5 times a year. We can trade knives and barter with roasted coffee beans. This impeding 1099 for cumulative sales over $600 is really irritating.
Love this idea, I’m in!!
 

Random Dan

Gold Member
Feedback: 31 / 0 / 0
Joined
Jan 21, 2012
Messages
1,581
This article states explicitly that personal items sold at a loss do not qualify.


If you sell personal items for less than you paid for them and collect money via third-party payment apps, this new legislation won't affect you. For example, if you buy a couch for your home for $500 and later sell it on Facebook Marketplace for $200, you won't owe taxes on the sale

I'm still not sure what we're supposed to do when filing though.
 

3D Anvil

Gold Member
Feedback: 1 / 0 / 0
Joined
Oct 4, 2021
Messages
218
If they want to play this game, then fine. If you sell more than a few items a year, set up a sole proprietorship for tax purposes. Keep records of your costs for the items you may sell. Since most of these types of sales result in a loss, your "business" will report a net loss, which you can deduct from your ordinary income.*

* I am not a tax attorney and this is not legal advice. :)
 

PeteyTwoPointOne

Platinum Member
Feedback: 574 / 0 / 0
Joined
Jun 10, 2014
Messages
7,045
This article states explicitly that personal items sold at a loss do not qualify.




I'm still not sure what we're supposed to do when filing though.

Yup, and herein lies the issue, imho...a bunch of damn extra paper shuffling on our behalf that only serves to justify some new-hire bureaucratic bean counter's existence.

This bean counter will undoubtedly have some sort of quota of un/under-reported tax they will be burdened with "recovering" and will nit pick and curry comb your records <regardless of your preferred filing methodology> until they find it.

At that point, the Herculean burden to prove/disprove will be on your shoulders, and it's then that you'll cave in, give up, and pay up to avoid penalty and interest and just to get them outta your life.
 

3D Anvil

Gold Member
Feedback: 1 / 0 / 0
Joined
Oct 4, 2021
Messages
218
Yup, and herein lies the issue, imho...a bunch of damn extra paper shuffling on our behalf that only serves to justify some new-hire bureaucratic bean counter's existence.

This bean counter will undoubtedly have some sort of quota of un/under-reported tax they will be burdened with "recovering" and will nit pick and curry comb your records <regardless of your preferred filing methodology> until they find it.

At that point, the Herculean burden to prove/disprove will be on your shoulders, and it's then that you'll cave in, give up, and pay up to avoid penalty and interest and just to get them outta your life.
I seriously doubt they will bother with these small sales. The IRS is already massively understaffed and only about 0.3% of returns are audited. I would bet that most returns falling in that .3% range involve 7-figure and above incomes.
 

Docscoot

Gold Member
Feedback: 9 / 0 / 0
Joined
Nov 28, 2021
Messages
265
I seriously doubt they will bother with these small sales. The IRS is already massively understaffed and only about 0.3% of returns are audited. I would bet that most returns falling in that .3% range involve 7-figure and above incomes.
I generally agree with this. But just for a scary contrary datapoint, the one time I was audited was a year as a student when my income was well below the poverty line. I think there’s some number of audits, maybe rare but they exist, that really are just random bad luck.
 

Gastonknife

Gold Member
Feedback: 82 / 0 / 0
Joined
Dec 15, 2008
Messages
1,830
The problem here is the 1099. The IRS will get that from PayPal as an example. They are not going to ignore those. Additionally they plan to hire more staff. Then the burden of proof receipts etc falls on you. They are not going to take your word for it. Finally, why do you think they made the threshold such a nominal amount ....$600????
 
Top