NDK
Cave Dweller
Member since January 2009
Posts: 9,439
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Post by NDK on Jan 6, 2022 11:15:09 GMT -5
Here's a question I just thought of. Let's say Ali and I get busy with our rock shop business. Now we bought the starry night jasper from Tommy. If we were to report that as a business expense are we now screwing him because they'll want to see him report that as income? If you pay for it using paypal friends and family then Tommy wont be affected but at the same time you probably could not use it as an expense. If you pay for it using paypal goods and services then Tommy pays 1099 on it and you get to use it as an expense. That's how I see it anyway. Chuck We did pay friends and family, so I guess Ali would have to sell it to the shop and that would sever any burden on Tommy.
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Post by MsAli on Jan 6, 2022 11:28:01 GMT -5
It really makes on rethink if they want to sell goods or other services
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Post by roy on Jan 6, 2022 11:30:53 GMT -5
I have to think about it a little. I've made some high dollar purchases over the years. I bought them with money I've already paid income tax on. If the sales of used items is taxable, then a person (me) is paying "income" tax twice. In my mind, the sale of a used item isn't "income"...it's recouping money already spent... The IRS really doesn't give a shit what you think about it. Obey. ya they really dont ! but he has a valid point this tax shit is going to far all the more reason for us to fight this build back better deal with there being a section in it to fund 86,000 more irs agents they plan on taking us all to the cleaners! here is a note though Obamma passed a law back is his term that if you made more than 20,000 or had more than 200 transactions in a year with paypal you had to file a 1099 one thing thats not clear on this is this new form is a 1099k not sure if there is a diffrence or not
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Post by knave on Jan 6, 2022 11:54:41 GMT -5
Good grief I’ll be over 600 a year easy. This sucks
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Post by oregon on Jan 6, 2022 12:50:23 GMT -5
The question now is, is it worth it to continue it for someone who is probably not going to generate a whole lot above maybe a thousand or two in sales during the year? They are not leaving us much of a choice I guess - I don't want to reach this point next year and suddenly receive a 1099 for a bicycle I sold on Facebook.
yeah, I see this as the real problem. I've also been trying to de-stash, am pondering what to do. There are lots of caveats, but it's probably all going to boil down to having meticulous records, and learning how to file business taxes. e.g. if I sell a car via ebay or one of my collectible Curta calculators, that'll generate a 1099. As I understand, Ebay's 1099 will simply be gross profits; that will include expenses you paid them in fees, shipping, fees on the shipping, fees on the sales tax they collect... so without bookkeeping the Gross profits = profits I think.
Yes, if you were selling for profit you were already obligated to pay taxes on these types of activities. I have to look up more of the distinction between a hobby and a business, but my quick understanding is that generation of a 1099 may take that choice away from you, the 1099 would represent your income as hobbies have no room for deductions etc.
Sounds like Ebay has already been loosing a surprising number of buyers (as well as sellers), that's kind of a sign as there is probably more buyer protection there than anywhere. It'll certainly cause a mess next tax year for a lot of folks I imagine (as well as the IRS). $600 seems like a ridiculously low threshold here.
(I didn't mean for the original link to be a definitive source, that was simply the first link on the google page I had open)
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Post by stardiamond on Jan 6, 2022 19:15:45 GMT -5
I'm retired and in a very low tax bracket so there is very little impact on my decision to sell. What I will have to do is keep records of my expenses which isn't a bad thing. I knew that my income was greater than expenses and since it is a hobby that is all I cared about.
At the end of the year I will have my expenses documented and then before I file, I'll see what the rules are for expenses and the rules for filing. Materials and supplies should be simple. I reinvest my income into equipment and have equipment that I already bought that is being used; saws and grinders etc. Suppose I spend $3,000 on a new slab saw. I know I can't fully write it off but I should be able to take depreciation along with all the other equipment that I have bought in the past. Worst case, I'll just pay taxes on the income. If I were still working and had the income I had in the past I might revisit selling.
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Post by hummingbirdstones on Jan 6, 2022 19:31:11 GMT -5
If you pay for it using paypal friends and family then Tommy wont be affected but at the same time you probably could not use it as an expense. If you pay for it using paypal goods and services then Tommy pays 1099 on it and you get to use it as an expense. That's how I see it anyway. Chuck We did pay friends and family, so I guess Ali would have to sell it to the shop and that would sever any burden on Tommy. You guys snuck in just under the new year, right? Therefore, it's moot for 2021 taxes.
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Tommy
Administrator
Member since January 2013
Posts: 12,648
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Post by Tommy on Jan 7, 2022 11:32:34 GMT -5
All, please help us keep this important thread on point and not let it drift into the political realm any farther than it already has. Many of us (myself included) are fairly outraged by this ridiculous and confusing new tax collecting strategy but political posts are guaranteed to draw a political response and this one could quickly spin out of control and end up in the cave.
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Tommy
Administrator
Member since January 2013
Posts: 12,648
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Post by Tommy on Jan 7, 2022 11:37:21 GMT -5
If you pay for it using paypal friends and family then Tommy wont be affected but at the same time you probably could not use it as an expense. If you pay for it using paypal goods and services then Tommy pays 1099 on it and you get to use it as an expense. That's how I see it anyway. Chuck We did pay friends and family, so I guess Ali would have to sell it to the shop and that would sever any burden on Tommy. What a ridiculous position to put you guys in and to be quite honest I never thought about it quite like this. When I was doing my recent de-stash sales my motivations for asking for friends and family were to keep what I already felt were pretty good prices from going even lower after Paypal/Venmo takes a slice. As Robin said it's a moot point for now but it has given me an entirely different viewpoint and yeah, it kind of changes everything
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Post by MsAli on Jan 7, 2022 11:54:38 GMT -5
I know for me personally I have to look at why I wanted to sell in the first place and whether it is justified now. I love making stuff and have rocks that I'll never get through so I made the decision to sell and help fund the "hobby" and maybe make a little extra for other stuff. Half the time with the cost of shipping I don't even come ahead at all which now with this law finally in effect, I really cannot see this being profitable at all. (It's not about me paying taxes either, we live in a country where we should expect that we are not gonna be able to make extra money without the government somehow figuring a way to get some of it) It's just it's a PITA to figure it all out and whether its worth it now
Plus I have some other adventures up my sleeve.
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Post by rockjunquie on Jan 7, 2022 12:02:42 GMT -5
My state started the 600 cap in 2020. Caught me by surprise. I quit selling. I have now decided to donate a lot of my jewelry. I give away a lot, but I still have plenty to get rid of. This way, I can still keep making stuff when I want to and have a place for it to go.
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Post by rockjunquie on Jan 7, 2022 12:05:18 GMT -5
Over the years, I have had people buy my stuff for resale. I have never gotten a 1099 for doing that. Last year, I claimed all my rock purchases. I don't think anyone had to account for that. Paul fencejumper- did you get hit with taxes on my big purchase from the auction?
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Post by knave on Jan 7, 2022 12:20:55 GMT -5
My passion for creating with rocks is improved by creating with a sale in mind. It may not always stay that way. I’m gonna ride the friends and family thing out. No way they can keep track of all the 1099s. Also a rumor that it may be increased to 10000
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Post by stardiamond on Jan 7, 2022 12:21:21 GMT -5
Over the years, I have had people buy my stuff for resale. I have never gotten a 1099 for doing that. Last year, I claimed all my rock purchases. I don't think anyone had to account for that. Paul fencejumper- did you get hit with taxes on my big purchase from the auction? I live in the same area as Paul and the threshold for a 2021 1099-k was $20k. In your transaction who would have produced it?
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Post by rockjunquie on Jan 7, 2022 12:29:27 GMT -5
Over the years, I have had people buy my stuff for resale. I have never gotten a 1099 for doing that. Last year, I claimed all my rock purchases. I don't think anyone had to account for that. Paul fencejumper - did you get hit with taxes on my big purchase from the auction? I live in the same area as Paul and the threshold for a 2021 1099-k was $20k. In your transaction who would have produced it? I was referring to the question by NDK. I have never sold anything that was resold and then got a tax bill for selling it.
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Post by rockjunquie on Jan 7, 2022 12:32:31 GMT -5
My passion for creating with rocks is improved by creating with a sale in mind. It may not always stay that way. I’m gonna ride the friends and family thing out. No way they can keep track of all the 1099s. Also a rumor that it may be increased to 10000 10k is a helluva lot better than 600!
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Tommy
Administrator
Member since January 2013
Posts: 12,648
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Post by Tommy on Jan 7, 2022 12:36:20 GMT -5
Plus I have some other adventures up my sleeve.
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Tommy
Administrator
Member since January 2013
Posts: 12,648
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Post by Tommy on Jan 7, 2022 12:39:08 GMT -5
My passion for creating with rocks is improved by creating with a sale in mind. It may not always stay that way. I’m gonna ride the friends and family thing out. No way they can keep track of all the 1099s. Also a rumor that it may be increased to 10000 10k is a helluva lot better than 600! I haven't been actively following it but I did read that the part of the law requiring banks to report your yearly deposits that total more than $600 was changed to $10k. I wasn't aware that the selling platform rules were lumped into the banks thing? IDK
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Post by aDave on Jan 7, 2022 20:51:40 GMT -5
10k is a helluva lot better than 600! I haven't been actively following it but I did read that the part of the law requiring banks to report your yearly deposits that total more than $600 was changed to $10k. I wasn't aware that the selling platform rules were lumped into the banks thing? IDK I'll have to go look, but I thought the whole $600 deposit thing (proposed) was for individual transactions and not an annual total. Is that what you meant and I'm misreading what you wrote?
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Post by knave on Jan 7, 2022 21:01:54 GMT -5
The new law as it currently stands will generate a 1099k for any account with CUMULATIVE totals of $600 or more in a year.
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