Bad Paypal 1099

Yeah, after this year it’s just buying for me, or at least that’s the plan. Maybe I can figure out how to use cryptocurrency.
 
I wonder if PayPal will begin keeping track of purchases in such a way to account that as potential inventory? I'd hate to have to pay tax based on a year end inventory valuation of knives I've bought. I've never sold through PP and right now am glad I haven't.
 
I've been both keeping a spreadsheet of my knife collection 'inventory' as well as both knives sold, their prices when bought and sold, and the PayPal fees and shipping charges I've incurred. I've been creating bills of sale as well the whole year. I am a bit in the black for 2021, but I did more buying and selling than usual and would still not end up with a whole lot of taxable income out of it.
 
It seems strange that this seems to only apply to PP. I am not hearing mention of sales through any of the other digital methods being affected
I am guessing they are just behind the curve, and it will be coming down the line
 
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Paypal is on its way out in my book as well. Its crazy to think that we as collectors/traders/sellers in this hobby are now subject to the big brother regulatory establishment as well. We do have other payment platforms to utilize such as venmo, zelle or crypto (if you have the time to figure it out). I have been keeping a spreadsheet as well for all my purchases since i started collecting. The phantom protection you get from paypal as a buyer all goes out the window if they find out it was for a knife anyway.

On the flip side to this, having a 1099 forces you into a schedule C on your return. We now have the opportunity to set our 'Hobby' up as a business, opening up a pathway to further deductions for day to day living costs (depending on your current tax status), such as possibly home office, internet/cable connections, cell phones, printers, etc. Even travel if you go to a show. Also, if you claim a loss for the year (as most of us collectors typically do) its right off your net income. Consult your local tax professional LOL.
 
nautiquess said:
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On the flip side to this, having a 1099 forces you into a schedule C on your return. We now have the opportunity to set our 'Hobby' up as a business, opening up a pathway to further deductions for day to day living costs (depending on your current tax status), such as possibly home office, internet/cable connections, cell phones, printers, etc. Even travel if you go to a show. Also, if you claim a loss for the year (as most of us collectors typically do) its right off your net income. Consult your local tax professional LOL.
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Then it likely will be considered a hobby not a business :)
 
Those filing a schedule c claiming you run a business rather than this being a hobby, are you planning to upgrade membership to dealer here?

Somewhat tongue in cheek, but it does raise the question again of when you're a dealer.

Soon Spark's lawyer is going to be filing requests for everyone's tax returns to be released to verify :p
 
nautiquess said:
On the flip side to this, having a 1099 forces you into a schedule C on your return. We now have the opportunity to set our 'Hobby' up as a business, opening up a pathway to further deductions for day to day living costs (depending on your current tax status), such as possibly home office, internet/cable connections, cell phones, printers, etc. Even travel if you go to a show. Also, if you claim a loss for the year (as most of us collectors typically do) its right off your net income. Consult your local tax professional LOL.
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Honestly, if we are going to get dinged like a business might as well get the benefits too. Hope some folks do that and stick it to the gov for poking their nose in here. Way too much work for me to be bothered. If I was just getting in and severely as addicted to buying and selling as I once was, it would be worth it. Lots of transactions, no profit so plenty of loss to write off. Uncle Sam would lose money on that one! Of course, it may be more complicated than that. I just don't give enough of an F. It is a hobby after all, not a need.

Not sure if paypal bowing down and outing collectors is in their best interest. Lots of folks are going elsewhere. And other places that make money off hobbyists selling are going to be impacted too.
 
kreole said:
Those filing a schedule c claiming you run a business rather than this being a hobby, are you planning to upgrade membership to dealer here?

Somewhat tongue in cheek, but it does raise the question again of when you're a dealer.

Soon Spark's lawyer is going to be filing requests for everyone's tax returns to be released to verify :p
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They'll say, "jeez, you're really bad at this".
 
P Peter Hartwig makes a good point.

You can't just declare a hobby a business. Well, you can, but if you get audited, the IRS has a rule where it's considered a business only if you made a profit 3 out of 5 years. Otherwise, they'll classify you as a hobby. You can't just keep taking a loss every year on something like this.

Schedule C is a big trigger of audits, so just keep the above in mind.

Always good to talk to an accountant, as a few people have said.
 
This reminds me of when I was doing side work through a service, kind of like being an Uber driver, but I only did a couple jobs a year through this service. It was IT work and they took the lions share of what was billed but was nice to have extra money at the time. I got a request for Tax ID information or they would close my account I asked why this was suddenly requested and they said I did over $700 worth of work. I knew I had not done even $500 through them so I asked them more about it turned out they were including the total parts cost in my "income" which was not accurate. Their system at the time explicitly said parts are not figured into their income calculations and tech were responsible for tracking and reporting that on their own. I basically just charged a rounded cost, I maybe made $0.50 off a part, as I didn't want to add that headache so I chose not to profit on parts.

Well I guess if I start trading on here again I will be accepting MO and Cryptocurrencies
 
Peter Hartwig said:
It seems strange that this seems to only apply to PP. I am not hearing mention of sales through any of the other digital methods being affected
I am guessing they are just behind the curve, and it will be coming down the line
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If you think that sounds strange read this V
The American Families Plan calls for banks and other financial institutions to report more than just a taxpayer’s interest earned, capital gains and losses. Banks and other financial institutions would also be required to report “aggregate account outflows and inflows.” In other words, the IRS will know about all of your bank accounts, whether you earned income on that account or not, how much is in the account in a given year, and how much was transferred in and out of the account. It is unclear how this would work, but what is clear is that this new reporting obligation will create a massive compliance effort on the part of financial institutions, and eliminate a massive blindspot that the IRS is currently enduring.
 
I'm sure this is merely a coincidence . :)
The Biden administration is proposing hiring 87,000 new workers for the Internal Revenue Service (IRS), effectively doubling the agency’s size, as part of a plan to beef up enforcement efforts and find billions of dollars in tax revenues that go uncollected each year.
 
As a side note, our Texas based credit union sent out letters warning about the requirement to report all transaction over $600 to the IRS, as part of biden's bill. The letter encouraged us to contact state and federal legislatures to voice disapproval of the bill.
 
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skyhorse said:
I purchased a knife from a member here years ago , the very next day he mailed me the knife and I mailed him a USPS money order . We didn't even bother to leave each other feedback. :)
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Prior to my accounts being merged I had a feedback score of 120+, probably 70 to 80 percent of that was conducted using a USPS M/O whether buying or selling. I have no problem going back to that... hell I might even consider a Walmart Vanilla Card now 🤣... piss on the IRS and more taxes.
 
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