New IRS reporting for 2021? 8 8

[WEBHEAD]

there is the rub.....most of us have not sold 200 books or 20k  then again  "your father buys Action 1 for 10 cents"  and puts it in a bible 70 years later he finds it and decides to sell it  does he pay the "blood money"  he bought it before this rule.  Personally it would be wrong.  leave it to 200 and 20K

[fantastic_four]

1 hour ago, WEBHEAD said:

there is the rub.....most of us have not sold 200 books or 20k  then again  "your father buys Action 1 for 10 cents"  and puts it in a bible 70 years later he finds it and decides to sell it  does he pay the "blood money"  he bought it before this rule.  Personally it would be wrong.  leave it to 200 and 20K

I don't get your Action 1 example within any context of fairness.  Congress has had the power to collect income tax since the Constitution was ratified in 1789, and they've been actively exercising that power via federal income taxes since passing the 16th amendment in 1909.  Note the wording in the original draft below--"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived."  That applied to any Action 1 bought in 1939 and sold later at a massive profit.

Comics have always been subject to income tax on profits since long before they ever started being printed.

[MyNameIsLegion]

9 hours ago, fantastic_four said:

I don't get your Action 1 example within any context of fairness.  Congress has had the power to collect income tax since the Constitution was ratified in 1789, and they've been actively exercising that power via federal income taxes since passing the 16th amendment in 1909.  Note the wording in the original draft below--"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived."  That applied to any Action 1 bought in 1939 and sold later at a massive profit.

Comics have always been subject to income tax on profits since long before they ever started being printed.

But if you inherit that Action 1, you get a step up in basis, and when YOU sell it, you can declare it's sale price against current market value, not 10 cents. HUGE difference.

[Professor K]

It is what it is. If you sell over the minimum threshold on e bay and you don't claim it on your taxes, you can expect a letter from the federal reserve goons probably by the end of the year.  The last time this topic came up and I read comments about not being patriotic because you don't want to give away all your profits, I said some things that got me booted. I won't do that again. So simple advice only:

If you sell on e bay now you should go to an accountant to do your taxes. Claim that your intitial cost of what you sold was around 50% of what you sold it for. Deduct any fees, and be sure to deduct the full shipping cost of each item as that cost will be included on your 1099.  You'll most likely owe some money but its better to get it over with from the start rather than get a letter later. Because when they come after you , they come after you heavy. 

My question is will the 1099's show the amount of sales before or after the 14% e bay fees. I would call e bay to find out but past experience tells me that would be an exercise in futility.

If anybody can find this out please let us know.

So if your 1099 reflects total sales and doesn't include the 14% e bay fee make sure you deduct that as well. 

[Professor K]

I just called e bay. I was told the the 1099's will include gross sales before the 14% e bay fees, which is wrong because that 14% is taken out before the seller recieves payment, therefore that "income" was never recieved which means it never was "In Come".  Probably going to make millions of $$$ of overpayments because of that from people who don't know any better.

So, Deductions you should make when you do your taxes in order to "Pay Your Fair Share":

Initial cost of items you sold. I'm going to claim 50% even though in most cases I paid more than that.

13 to 14% e bay fees on gross amount of what's on your 1099.

Full shipping cost of each item you sold regardless of what you charged in shipping.

The total amount of all refunds you gave to buyers.

I think that's about it.

Good Night.........And Good Luck

 

Edited May 7, 2021 by Professor Chaos

[comicdiablo]

I appreciate the guidance on this, Professor Chaos. I do not expect to receive a 1099 related to eBay sales for 2021, but I think it is likely to happen in the future.

[jcjames]

5 hours ago, Professor Chaos said:

I just called e bay. I was told the the 1099's will include gross sales before the 14% e bay fees, which is wrong because that 14% is taken out before the seller recieves payment, therefore that "income" was never recieved which means it never was "In Come".  Probably going to make millions of $$$ of overpayments because of that from people who don't know any better.

So, Deductions you should make when you do your taxes in order to "Pay Your Fair Share":

Initial cost of items you sold. I'm going to claim 50% even though in most cases I paid more than that.

13 to 14% e bay fees on gross amount of what's on your 1099.

Full shipping cost of each item you sold regardless of what you charged in shipping.

The total amount of all refunds you gave to buyers.

I think that's about it.

Good Night.........And Good Luck

 

Starting 2022, I will rarely sell on Feebay. F'em. 

 

 

[Professor K]

48 minutes ago, jcjames said:

Starting 2022, I will rarely sell on Feebay. F'em. 

 

 

I'm selling the last of my raw books this year.

Why 2022? I ask because I've seen written on e bay people saying this new threshold won't kick in until tax year 2022. However if e bay is sending out 1099's by Jan 31st 2022 for tax year 2021 then its a done deal already. If they send a 2021 1099 to sellers that means the i r s has been informed as well and if any of that is not claimed they will not overlook it. These are opinions of course but I believe its true.

[jcjames]

9 hours ago, Professor Chaos said:

I'm selling the last of my raw books this year.

Why 2022? I ask because I've seen written on e bay people saying this new threshold won't kick in until tax year 2022. However if e bay is sending out 1099's by Jan 31st 2022 for tax year 2021 then its a done deal already. If they send a 2021 1099 to sellers that means the i r s has been informed as well and if any of that is not claimed they will not overlook it. These are opinions of course but I believe its true.

I thought the reduced thresholds ($600) for them to send sellers a 1099 would not start until 2022. So I thought sellers this year would still be operating with the 200/$20,000 thresholds. Is this not the case?

[Professor K]

54 minutes ago, jcjames said:

I thought the reduced thresholds ($600) for them to send sellers a 1099 would not start until 2022. So I thought sellers this year would still be operating with the 200/$20,000 thresholds. Is this not the case?

I don't know anything for sure but I did see this

 

https://community.ebay.com/t5/Payments/Form-1099-K-Detailed-Report/m-p/31575590#M106915

[jcjames]

2 hours ago, Professor Chaos said:

I don't know anything for sure but I did see this

 

https://community.ebay.com/t5/Payments/Form-1099-K-Detailed-Report/m-p/31575590#M106915

Thanks, that's still the old levels to trigger a 1099, 200 and $20,000 sales. But I think this thread started because Feebay sent out a notice that starting next year (not for tax year 2021 but for tax year 2022) they would send 1099s for sales over $600 total for the year.

[ADAMANTIUM]

Just now, jcjames said:

Thanks, that's still the old levels to trigger a 1099, 200 and $20,000 sales. But I think this thread started because Feebay sent out a notice that starting next year (not for tax year 2021 but for tax year 2022) they would send 1099s for sales over $600 total for the year.

sad news is we'll probably have to wait 2 years for any uproar and change of policy........  

meaning, I don't think that it is common knowledge at this point, or not to the point of anyone complaining loud enough  

[justafan]

20 hours ago, Professor Chaos said:

I just called e bay. I was told the the 1099's will include gross sales before the 14% e bay fees, which is wrong because that 14% is taken out before the seller recieves payment, therefore that "income" was never recieved which means it never was "In Come".  Probably going to make millions of $$$ of overpayments because of that from people who don't know any better.

 

The 1099 shows the gross sales BEFORE any ebay or paypal fees.  However, if you weren't forced into ebay managed payments yet, you didn't actually have the fees deducted from your sales when you received the money in paypal.  For most of us that haven't adopted ebay managed payments, they deduct the final value fee at the end of the billing period from your account so technically it is true that from ebay's perspective, they paid you the gross amount that they put on the 1099.  Paypal, however does deduct their 3% +31 cent transaction fees when it is posted to your Paypal account.  Starting May 28 however, more laggards like me on ebay will be forced to move to managed payments which auto deducts the fees (including FVF and any listing fees) from your earnings BEFORE you get paid.  The remainder will go directly to your bank account.  So for those people the 1099 should show the net total without the fees.  However, I'm not sure if they know they should do that or will but I hope so.

 

Edited May 7, 2021 by justafan

[Professor K]

4 hours ago, jcjames said:

Thanks, that's still the old levels to trigger a 1099, 200 and $20,000 sales. But I think this thread started because Feebay sent out a notice that starting next year (not for tax year 2021 but for tax year 2022) they would send 1099s for sales over $600 total for the year.

Yes, but it also says not these States. So if you don't live in any of these I think youre good in 2021. Too bad I do.

And this is actually even more bs to me. Why should some states get a pass and others not. No question there, just an observation.

• Arkansas - $2,500 in gross payments with no threshold on the number of transactions
• District of Columbia - $600 in gross payments with no threshold on the number of transactions
• Illinois - $1,000 in gross payments and a minimum of 4 transactions
• Maryland - $600 in gross payments with no threshold on the number of transactions
• Massachusetts - $600 in gross payments with no threshold on the number of transactions
• Mississippi - $600 in gross payments with no threshold on the number of transactions
• New Jersey - $1,000 in gross payments with no threshold on the number of transactions
• Virginia - $600 in gross payments with no threshold on the number of transactions
• Vermont - $600 in gross payments with no threshold on the number of transactions

[Buzzetta]

On 4/20/2021 at 10:01 PM, the blob said:

people that actually make $150 profit a year hustling krap on ebay don't want to spend 6 hours determining their profit for the year, it isn't evil, it's just a headache, if you're selling $12K a year in stuff and likely making a profit in the 4 digits it is another issue.

It's beyond that.  I am going to say it again, we are focused too much on the selling collectables aspect of this. 

Last week there was a garage sale down the block from me.  There were people doing transactions with PayPal.  Now whether or not they were doing transactions using Friends and Family or Goods ands Services is unknown.   That garage sale generated more than $600.  My neighbor selling his old living room set and kitchen table definitely generated more than $600 locally. 

Hate the break the news to the white knights on tax law, but people like this are completely unaware of this $600 threshold and auto generating form.  So my concern is not with the comic community who will have to learn to work with the new laws, my concern lies with those that are cleaning out a garage, or selling off their kids outgrown toys and clothes and things like that.   As more people become accustomed to paying electronically this will become problematic for a lot of surprised people in 2023. 

You are either going to see people get kicked in the nuts that really don't need to be or you are going to see people simply putting more stuff in black plastic bags at the curb as they cannot be bothered with it which is a shame. 

 

 

[Buzzetta]

22 hours ago, comicdiablo said:

I appreciate the guidance on this, Professor Chaos. I do not expect to receive a 1099 related to eBay sales for 2021, but I think it is likely to happen in the future.

As was said, it starts January 1st 2022. 

[Callaway29]

Started for me last year, as in...2020 taxes (Virginia). Was a fun surprise!

[justafan]

5 hours ago, Buzzetta said:

 

You are either going to see people get kicked in the nuts that really don't need to be or you are going to see people simply putting more stuff in black plastic bags at the curb as they cannot be bothered with it which is a shame. 

 

 

Cash is still king. People will figure it out.

[fantastic_four]

12 hours ago, Buzzetta said:

Last week there was a garage sale down the block from me.  There were people doing transactions with PayPal.  Now whether or not they were doing transactions using Friends and Family or Goods ands Services is unknown.   That garage sale generated more than $600.  My neighbor selling his old living room set and kitchen table definitely generated more than $600 locally. 

Hate the break the news to the white knights on tax law, but people like this are completely unaware of this $600 threshold and auto generating form.  So my concern is not with the comic community who will have to learn to work with the new laws, my concern lies with those that are cleaning out a garage, or selling off their kids outgrown toys and clothes and things like that.   As more people become accustomed to paying electronically this will become problematic for a lot of surprised people in 2023. 

Most garage sales are selling EVERYTHING at a loss, i.e. less than they paid for it.  Very little in those would even qualify for taxes.

And for the things that do sell for more than was originally paid--well, if people don't realize the government taxes all income then I don't know what to tell them aside from ignorance of the law is no excuse.    At a typical garage sale so many of the things sold are at a loss that they eclipse anything sold that appreciates so aside from collectibles it's uncommon that garage sales would end up even requiring taxes.

Edited May 8, 2021 by fantastic_four

[Buzzetta]

Just now, fantastic_four said:

Most garage sales are selling EVERYTHING at a loss, i.e. less than they paid for it.  Very little in those would even qualify for taxes.

And for the things that do sell for more than was originally paid--well, if people don't realize the government taxes all income then I don't know what to tell them aside from ignorance of the law is no excuse.    At a typical garage sale so many of the things sold are at a loss that they eclipse anything sold that appreciates so I doubt so aside from collectibles that appreciate it's uncommon that it would end up being an issue.

I grant you that it is almost always at a loss.   The surprise is when they actually receive a 1099 in the mail.