Posted on 12/23/2022 11:14:45 AM PST by SeekAndFind
Ditto and the IT systems at the IRS and the likes of PayPal aren't ready.
Some years back, when I did taxes seasonally, a guy came in. He was in a panic. The IRS told him he owed on 100,000 of income! BTW - He was an E-4 in the military. I passed him on to a lady who did tax returns but who also had a masters in accounting. The IRS based it on the total sales reported on eBay.
The young airman had terrible records but over 10 hours of work made it possible to document the COSTS as well. His “income” from sales on eBay went down to $4,000.
I did enough sole proprietor type returns for industrious young people to have pointed out, many times, that these hard working people were actually LOSING money in their business. Some adjusted their business model while others quit.
A lot of wives neglected to think about their supplemental earnings compared to the child care costs AND that, since their earnings were in addition to their husband, the earning were taxes at the top marginal rate - often 20%. Many then realized they were working for less than $2/hour total gain.
But yes, there are a ton of people who sell ten thousand dollars of goods on eBay and have expenses that mean their additional income is 1-2,000. But they also won’t report ANY income until someone tells on them.
This is good news. Hopefully the Republican House removes this absurdity.
I think your post is correct. Has to do with pissing off more of us little people as they ruin our future over that craphole Ukraine.
Not true. Ebay has completely divorced itself from PayPal and that has opened up a wider range of payment options for buyers (they can still use PayPal, though). If you sell something on eBay, they collect the money, and they issue the 1099 if you cross the threshold. PayPal can still issue a 1099, but not for eBay sales. If you operate a business independent of eBay, and use PayPal for payments, then yes, you will get the 1099 from PayPal.
Sales via PayPal are not pure profit, and the IRS can go to hell. Often times, you sell old possessions for a fraction of what it cost you, and even then you’re charged exorbitant shipping fees and online fees by eBay and other sales sites. Most of the time, it’s a loss and not a profit. An exception are some collectibles we sold, that sold higher than what we initially paid but these sales balanced out some of the losses. The government taxes our labor earnings, taxes us when buying items, and taxes us when we sell them. Then they give away our taxes to causes we don’t believe in, and inflate the deficit. Screw this gov’t.
I understand that they are separate entities. I used to sell on eBay, but now I merely buy.
Are you saying that if a seller receives a 1099-k from Paypal for gross sales receipts, that the total will include everything processed through its system EXCEPT the eBay sales?
Yes, that is my understanding.
If the eBay account is a merchant, not so easy.
Hunter must be back on the road.
The new “managed payments” system that eBay requires all sellers use (after 2021) gives the seller NO way to know what method a buyer is using to buy the item. It could be PayPal, a bank credit card, Apple Pay, Google pay, a gift card, or whatever. Ebay is the payment processor. They deduct the transaction and selling fees, and send what’s left to the seller. All the seller knows is that eBay got the money to pay for the buyer’s purchase.
If you use a bank credit card to fund a purchase using PayPal, as far as I know, only eBay gets to take a fee. Not PayPal, and not the Bank. The only activity I now see in my PayPal account is for my own purchases. There is no record in the account of anyone who might have used PayPal to buy my stuff on eBay.
This is all new since I stopped selling. This arrangement applies to those who use eBay managed payments, other than receiving directly to your PP account. I get it. Then, the PP fees are included in the expenses deducted by eBay, so you have no direct sales relationship with PP. Interesting. (I used to wait until it was enough to request a check from PP).
Is eBay management an option or required? I wonder what percentage use which.
But, with the eBay management of payments, you are correct that PP would be a pass-through, and wouldn't include those in any 1099 PP issued.
And the problem that the folks who are cleaning out their closets and selling used items on ebay have is, they acquired the stuff more than 7 years ago, and thus wouldn’t have receipts to show what they paid for it; they’d only have an aggregate value of what they sold the things for.
What do those folks do to show they didn’t make any profit and thus won’t owe any tax on the sales?
And that’s why eBay asks the social security number of any seller that hasn’t sold stuff in a while; this happened to a relative of mine- they got an email from eBay saying that they (the relative) had to call eBay and update their account.
I did some looking because I do have a few things I should sell there, and I see the new system is not optional. Whoah, I’ll bet that went over like a lead balloon when it was announced.
It probably wouldn't take much to prove it was really just an on-line garage sale, but, in most cases, I'd suggest a genuine "garage" garage sale. I know one big seller who quit because of all the "new %%##@@ rules and stuff" but i didn't ask particulars.
Does that mean forms for 2023 sales will be sent out in Jan 2024?
And no forms for 2022 sales will be sent out in Jan 2023?
Problem is, there’s only 8 days left in 2022.
If you want to sell on eBay, you have to use their managed payment system. It’s mandatory.
In some respects, it’s an improvement as eBAy gives you a single monthly figure representing all the expenses of selling. That includes listing fees, final value fees, shipping labels, nuisance fees, and the transaction fees (which used to be taken by PayPal). Record keeping is considerably easier. 2021 was messy as the new system was gradually phased in, but now in 2022 its fully operational and is working reasonably well.
Many people griped that now you don’t have immediate access to your money which previously would have accumulated in your PayPal account with which you could make purchases or pay bills. You now have to have a bank account linked to eBay (most people have a separate account for that). Money is periodically swept out to your bank account with several schedule options (daily to monthly). This could be a problem for people on the verge of insolvency.
To help smooth the transition for our fiends and colleagues before we lower the boom on you
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