New IRS reporting for 2021? 8 8

[fantastic_four]

On 4/6/2021 at 9:49 PM, Wolverinex said:

On 4/6/2021 at 9:44 PM, SilverAgeGuy said:

If I will have to keep detailed financial records of all items I put up on ebay and further, calculate depreciation on household items, I will definitely be closing my ebay store this year.

Agreed.  what a PIA

What "detail" are you guys envisioning related to collectibles (I'm ignoring depreciable items, that's another topic)?  All you should have to record is what you paid for an item, what you sold it for, and subtract one from the other.  And it's not new, you're supposed to have been doing that your entire life whether you knew it or not.  What's new is that now if you're using eBay the IRS will know about it whereas before you could evade taxes more easily.

Even if collectibles weren't taxed I would track what I paid and sold items for just so I learn to buy and sell better.  As soon as I started buying comics worth more than about $100 I realized I should track sales to hone my buying and selling skills to justify larger purchases.

[jimjum12]

16 hours ago, Robot Man said:

I just reopened mine after letting it lapse because of the new payment program. I didn’t want eBay or PayPal to have any access to my bank account so I just opened a new one for eBay. 

I realized that I need it more than they need me. I deal in a lot of other stuff other than comics and for some things, sadly, there is just no better venue. I have decided to severely cut back on what I put up. I just need that option.

I spoke to my tax lady about it and this is what she recommended. She mentioned deductions and the benefits. But I just want to do what I do best. Buy and sell junk. I will set up a spread sheet and keep track of what I sell and the cost of doing it. But if that 1099 comes, I figure out t would be just easier to pay up. Shouldn’t be much and worth it in the long run. It won’t be a ton of transactions or huge money. The great days of the bay are long gone. It has finally caught up with us...

One thing I have to say in favor of eBay is that they collect and (presumably) distribute the sales tax for you. This would be a HUGE bonus for me, as collecting sales tax for as many as 50 different entities would have been a deal breaker for me.... time to pack it in or go strictly Auction House. Now eBay isn't looking so bad. I just sold a bedsheet pulp there, a rare eBay sale for me, and sure enough, they pulled the sales tax for me. Bear in mind, I won't likely know until I receive a year-end accounting from eBay, but it looks promising if I want to continue selling without being in hot water from 50 different States. GOD BLESS....

-jimbo(a friend of jesus)

[F For Fake]

As far as tracking sales goes, I used to really love Paypal's reporting features, the financial summary, which I could run whenever I wanted, to get a good idea of how much I've made and how it breaks down. It was fast and easy to read.

Since I'm new to eBay's managed payments (like most of you), I'm not finding much facility with their reports. There's a very basic report which gives you everything in a big, ugly CSV dump, and sure, I can sort that and throw in some quick formulas to get totals, and make it prettier to find out what I wanted. But does anyone know if there's a simpler/cleaner way to get an instant update on how much money I've made so far this year? Yes, I can work with the csv they have, but I AM BEING LAZY! For taxes I'll take this ugly info dump and clean it up, but for daily usage, is anyone aware of a faster/cleaner way to get a quick summary? Am I missing something obvious? 

[jimjum12]

I've heard good things about Quick Books software, but haven't tried it yet... I was always very small scale and didn't use that sort of thing... but with all the added expectations, I probably will if I decide to continue. I always say I'm getting out, but I'd miss the hustle and bustle of comic sales. GOD BLESS... 

-jimbo(a friend of jesus)

[gunsmokin]

48 minutes ago, jimjum12 said:

I've heard good things about Quick Books software, but haven't tried it yet... I was always very small scale and didn't use that sort of thing... but with all the added expectations, I probably will if I decide to continue. I always say I'm getting out, but I'd miss the hustle and bustle of comic sales. GOD BLESS... 

-jimbo(a friend of jesus)

we have Quick Books at the company I work for. It is fantastic.

[Shrevvy]

1 hour ago, jimjum12 said:

One thing I have to say in favor of eBay is that they collect and (presumably) distribute the sales tax for you. This would be a HUGE bonus for me, as collecting sales tax for as many as 50 different entities would have been a deal breaker for me.... time to pack it in or go strictly Auction House. Now eBay isn't looking so bad. I just sold a bedsheet pulp there, a rare eBay sale for me, and sure enough, they pulled the sales tax for me. Bear in mind, I won't likely know until I receive a year-end accounting from eBay, but it looks promising if I want to continue selling without being in hot water from 50 different States. GOD BLESS....

-jimbo(a friend of jesus)

It is unlikely that many in these threads would be required to collect and pay sales taxes in 50 states. Each state has its own threshold for requiring the collection and payment of sales tax from entities outside the state (economic nexus). Those thresholds are typically dollars sold into a state (typically $100,000-$250,000 per state) and/or number of transaction sold into a state (100-200 transactions per state - sometimes in combination with the dollar threshold and sometimes not). If eBay allowed sellers to comply instead of eBay as a whole, most sellers would not be required to pay sales taxes. 

It has been law to pay use tax on out of state purchases. How many here paid taxes on comic book purchased from out of state by claiming such on their tax returns? How about purchases from Amazon (prior to them collecting sales tax)? My guess is that it rounds down to zero. Technically, these taxes are not new. I find it very hard to believe that any state would be looking at a comic seller (or any other small seller) and auditing whether you sold 199 shipments into state or 200. 

This is my own research from some time ago. My disclaimer is that I am not a professional and tax laws change all the time.

[Shrevvy]

Here's a guide to economic nexus by state. 

Economic Nexus State Guide - State by State Economic Nexus Rules | Sales Tax Institute

 

[manetteska]

On 3/8/2021 at 3:50 PM, manetteska said:

I'm going through this currently, since IL has a lower threshold in effect for this year's taxes (2020 sales). I will let everyone know how painful/less it is. Definitely using an Accountant this go-round and not winging it.

Some good questions in here, such as the time between buying a selling a comic and its impact to taxes. Can I now add in packing supplies against the bottom line? Paper and ink for shipping labels, etc?

Additionally, if I did have a receipt for every comic (going back 10+ years or more), brick and mortar stores who give receipts don't usually specify at that level, it just says "Back Issue: $5". If they don't have to itemize when selling the item, and they are a full-time business, do I have to when I am buying? Perhaps it's a different tier of business versus part-time, or they are allowed to do that; I don't know, and it's all just a pain to think through. Hopefully not a pain (mentally or the wallet) to file.

Update: Ouch.

Per the first pass by the tax preparer, and using the 1099, from the GROSS amount sent out by eBay/PayPal I am only allowed to deduct the cost of the SOLD items (as well as fees/taxes). It doesn't matter if that money was then used to buy more comics/inventory (essentially getting back to $0 net). Not a good day.

[ADAMANTIUM]

11 minutes ago, manetteska said:

Update: Ouch.

Per the first pass by the tax preparer, and using the 1099, from the GROSS amount sent out by eBay/PayPal I am only allowed to deduct the cost of the SOLD items (as well as fees/taxes). It doesn't matter if that money was then used to buy more comics/inventory (essentially getting back to $0 net). Not a good day.

So storage fees? Insurance? All deductible?

[manetteska]

2 hours ago, ADAMANTIUM said:

3 hours ago, manetteska said:

Update: Ouch.

Per the first pass by the tax preparer, and using the 1099, from the GROSS amount sent out by eBay/PayPal I am only allowed to deduct the cost of the SOLD items (as well as fees/taxes). It doesn't matter if that money was then used to buy more comics/inventory (essentially getting back to $0 net). Not a good day.

So storage fees? Insurance? All deductible?

I am scheduling a follow-up call to go over this in more depth.

 

Either I’m doing this wrong, other folks are fudging some numbers, or everyone is in for a rude awakening. 

Edited April 8, 2021 by manetteska

[rsouxlja7]

2 hours ago, ADAMANTIUM said:

So storage fees? Insurance? All deductible?

Yes. Also: cell phone, internet, fuel if you travel to buy collections, etc. 

[Shrevvy]

4 hours ago, manetteska said:

I am scheduling a follow-up call to go over this in more depth.

 

Either I’m doing this wrong, other folks are fudging some numbers, or everyone is in for a rude awakening. 

No, you can only deduct the cost of comics that were sold. The rest of the purchases are held in inventory. When those are sold, you then deduct those. You still own those comics. Why should you deduct them?

But, you can deduct any expenses associated with buying and selling those comics. It has been mentioned before, but selling fees (eBay, Comic Link, etc), bags, boards, shipping, boxes, convention admissions, insurance and more can all be expensed. 

[manetteska]

27 minutes ago, Shrevvy said:

No, you can only deduct the cost of comics that were sold. The rest of the purchases are held in inventory. When those are sold, you then deduct those. You still own those comics. Why should you deduct them?

But, you can deduct any expenses associated with buying and selling those comics. It has been mentioned before, but selling fees (eBay, Comic Link, etc), bags, boards, shipping, boxes, convention admissions, insurance and more can all be expensed. 

Yes. That’s why I’m leaning more towards B and C from my options above (for first-timers).

[moodswing]

At least we will be able to sell our non keys for 50 cents and right off all that money we lost. 

[AGGIEZ]

Isn’t eBays current threshold to distribute a 1099 to those with $20k in sales AND 200 transactions for the calendar year?

Edited April 14, 2021 by AGGIEZ

[MyNameIsLegion]

41 minutes ago, AGGIEZ said:

Isn’t eBays current threshold to distribute a 1099 to those with $20k in sales AND 200 transactions for the calendar year?

this is the last year. (for those state that don't already have a lower threshold)  Next year it's $600 total through one payment system, Transaction count is irrelevant.. So in 2023, when doing your 2022 taxes, anyone using Ebay, Paypal, Etsy, etc is going to be in a for rude surprise. So, in your case, your Ebay sales for one single item, if this was 2022 would trigger a 1099 the following year.

Edited April 14, 2021 by MyNameIsLegion

[Nazirite]

I really appreciate this thread, I enjoy reading about many topics on here but this one has been the most useful. I’am very interested to see how this will affect the market. I almost want to hold off from buying comics until 2023 lol. “Buy the dip” might be the theme of that year. 

[jharvey]

On 4/8/2021 at 3:05 PM, manetteska said:

Update: Ouch.

Per the first pass by the tax preparer, and using the 1099, from the GROSS amount sent out by eBay/PayPal I am only allowed to deduct the cost of the SOLD items (as well as fees/taxes). It doesn't matter if that money was then used to buy more comics/inventory (essentially getting back to $0 net). Not a good day.

The tax treatment is different depending on whether your comic selling is considered a hobby or a business. Ask your tax preparer what you need to do in order to be considered a business.

Edited April 14, 2021 by jharvey

[fantastic_four]

8 hours ago, MyNameIsLegion said:

this is the last year. (for those state that don't already have a lower threshold)  Next year it's $600 total through one payment system, Transaction count is irrelevant.. So in 2023, when doing your 2022 taxes, anyone using Ebay, Paypal, Etsy, etc is going to be in a for rude surprise. So, in your case, your Ebay sales for one single item, if this was 2022 would trigger a 1099 the following year.

This is all incenting me to sell off some stuff I've been meaning to sell off for years THIS year.

[MyNameIsLegion]

1 hour ago, fantastic_four said:

This is all incenting me to sell off some stuff I've been meaning to sell off for years THIS year.

yup, although the paranoiac in me can't help but think the IRS will be very keen to see the sudden drop in year over year processed payments all of a sudden should they ask for that info from paypal and the like.