Sellers/ selling electronic fees and taxes? PayPal, Venmo etc..

[Amputee Marksman]

I won a P320XC at a Sig Event. They sent me a 1099 for the full retail price.
I have won guns from S&W and Ruger and neither of them sent me any 1099s.

 

[TrackDayRdr]

Just submit a schedule C to IRS. Income as reported on 1099. Then add cost of goods sold, might be 90% of income, shipping costs, might be 30% of income, you have an offset against regular income. I believe you have to show profit in 2 years out of 5? IRS is not going to audit you unless you claim outrageous home office expenses.

That's not the proper approach to reporting casual transactions.

 

[TrackDayRdr]

I won a P320XC at a Sig Event. They sent me a 1099 for the full retail price.
I have won guns from S&W and Ruger and neither of them sent me any 1099s.

Ordinary income. Don't report that on Sch C or otherwise subject to self-employment income.

 

[TrackDayRdr]

What's the practical advice on how to handle these 1099s though when going through TurboTax (for example)? Do you add the 1099 and pay the taxes? Ignore it? Sorry - I'm a moron when it comes to taxes, and plenty of other stuff now that I'm thinking about it.

Scroll up. I already commented the proper reporting procedure.

 

[not new guy]

Scroll up. I already commented the proper reporting procedure.

Thank you.

However, if you do NOT have a business and have card transactions greater than $600 you report the income on your return and a corresponding credit for "casual transactions not for profit".

I always just use TurboTax and I'm not sure I've ever seen a spot to add a corresponding credit but I'll deal with it whenever I get around to filing this year.

 

[TLB]

Here is how it works so you can all stop speculating and assuming some cosmic crisis:

ALL of the funds transaction clearing houses (Paypal, Venmo, Square, etc) are required to REPORT on a 1099-K when total transactions for the year exceed $600. That doesn't mean these will be taxed. There are no withholdings at the source. If you are routinely selling items for profit then you have a business. If you have a business the difference between net sales and your item cost is subject to income and self-employment taxes. However, if you do NOT have a business and have card transactions greater than $600 you report the income on your return and a corresponding credit for "casual transactions not for profit". No tax. Case closed.

For the poshmark, eBay, Etsy and other people who are regularly buying and selling items for a profit, that is a business. For the thrift store kings reselling Savers items for profit: that's also a taxable business. If you have an occasional yard sale and sell more than $600 worth of junk, those are casual sales - no tax. If you're splitting the Sox tickets and have a 1099-K from that? Casual transactions.

What about selling unused personal Bruins tickets through Ticketmaster to the tune of a few thousand dollars on the 1099 (but not for a profit overall)?

 

[TrackDayRdr]

What about selling unused personal Bruins tickets through Ticketmaster to the tune of a few thousand dollars on the 1099 (but not for a profit overall)?

The difference between the cost of the tix and what you sell them for is taxable income.

 

[67ray]

Decoding 1099-K Reporting Limits: A Guide for eBay Sellers | TaxAct

The IRS has new reporting thresholds for online sellers. TaxAct and eBay have partnered to explain these tax changes and what they mean for your tax return.

www.taxact.com

Yet ebay sent me a 1099k this year, on ~$1200 in sales.



So is the delay for filers, or for eBay on sending out 1099ks (but the taxes are still reportable)?

The actual IRS announcement: IRS announces delay for implementation of $600 reporting threshold for third-party payment platforms’ Forms 1099-K | Internal Revenue Service



Translation: We're making it up as we go along?

The article you cite says:
As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.

Guess they happily do things they are not required to do.

 

[Lxpony]

I've got a 1099k from PayPal the past 2 years. In the trash it's gone both times..

 

[MGnoob]

I find my hair starts falling out around tax season.

It was another horror show.

I’ll bet you anything it cost more money to collect the taxes than they get. That’s how the government operates.

 

[Amputee Marksman]

Ordinary income. Don't report that on Sch C or otherwise subject to self-employment income.

First, 1099 misc claimed as "other" income.

Second, I am not a tax expert but why would I ever claim it on a Sch C when clearly it is not income from self employment or a business?

 

[TrackDayRdr]

First, 1099 misc claimed as "other" income.

Second, I am not a tax expert but why would I ever claim it on a Sch C when clearly it is not income from self employment or a business?

I guess no good deed goes unpunished.

You seem to know lots about taxes - are you looking for a job? My office is hiring but you'll have to leave the cantankerous comments at home.

 

[Amputee Marksman]

I guess no good deed goes unpunished.

You seem to know lots about taxes - are you looking for a job? My office is hiring but you'll have to leave the cantankerous comments at home.

I'm honestly not trying to be a dick. I apologize if you took it that way. A better choice of words would have been why would someone with a few brain cells claim it on a form that is labeled Schedule C Profit or Loss From Business.

I am not a tax guy and would never claim to be. Whatever I know I learned from filing my own taxes over the years. In a lot of years when I was younger and had a lot more going I would pay a CPA to do them. I did however always looks them over and try and understand everything he did and where all the numbers came from.

 

[Snora]

And @2000 could certainly push a person into a different tax bracket

It's not like hitting a new tax bracket suddenly increases the tax rate below that bracket so what's the big deal?

 

[namedpipes]

Ok.

I have a log splitter I no longer need. It's probably worth $800-900. If I sell it on Craigslist for that and get paid with paypal, I'm supposed to report this as income because paypal would send me a 1099. If I omit it, the IRS will send its minions to kill me. If I don't, I get to pay income tax on something I sold for less than I paid for it.

If I'm audited years later, I'm expected to produce the receipt for when I bought it to prove I didn't profit. Only maybe I paid cash for it originally and don't have it.

This is insanity. Are they consulting with Massachusetts law makers, to get this so fouled up?

 

[zboys]

A 1099k is different than a 1099.
Throw the 1099k in the trash and carry on.
Way to much paranoia and government ass kissing in this thread

 

[TrackDayRdr]

A 1099k is different than a 1099.
Throw the 1099k in the trash and carry on.
Way to much paranoia and government ass kissing in this thread

The IRS is generally going to ignore small dollar 1099-K forms but don't be so cocky. These days crypto transactions are being reported on 1099-K so the IRS isn't ignoring those although there is a line on your return to answer as to whether or not you had any crypto transactions during the year. The 1099-K bully in the room is the state sales tax auditors.

Properly reporting a 1099-K on your return takes little to no effort vs leaving the door open to potentially having to respond to the issue at some point in the future.

 

[TayNinh_66]

That's not the proper approach to reporting casual transactions.

If you receive a 1099K and only have 1 or 2 transactions then Schedule 1 would be an appropriate and simpler solution.

 

[MaverickNH]

Opinion | The IRS’s Act of $600 Mercy

The agency again postpones a new third-party 1099-K tax-form deluge.

www.wsj.com

Meanwhile you can steal under $1000 of goods without fear of prosecution. But that’s Reparations, not Income…

”While rarely a bearer of good news, the Internal Revenue Service on Tuesday postponed a $600 reporting threshold for payments received via online platforms such as Venmo, eBayand Airbnb.”

 

[jkelly1229]

No idea, but it smells.

Say I loan my kid $1000 so he can cover a car repair, which he pays for, including any applicable sales/service tax. He then repays me when he has the money.

1. The actual transaction (paying for the repair) was taxed. The mechanic also (later) pays income taxes on what he earned.

2. My boy is taxed $240 on the personal loan to him.

3. I'm taxed $240 when he repays me.

Yet only the first line was a taxable transaction.

Sounds like it's time to dump services like paypal and use cash, to me.

Sounds like you need to hand him cash

 

[Lxpony]

Yawn... Ive gotten 1099-K from Paypal the past few years for online sales I do and Ive always just thrown it out...