Quote:
Originally Posted by bnorth
I am guessing the last line in your previous post.  |
LOL
You may have point there. The last thing someone not doing things in accordance with the law should be doing is posting about it online on a public forum. That's also why I mentioned him possibly not realizing that when his post gets quoted by someone else in the thread that he can't delete it then.
And what I said in that last line is pretty much true. Just go back and find some of those threads on here talking about sales taxes when Ebay started collecting it on everything, or as more and more auction AHs were forced to start collecting it in more and more states. There always seemed to be a few posters hemming and hawing about how and why they shouldn't be paying sales tax now because they didn't have to pay it before. I'm sure none of them liked me informing them that they had been breaking their state sales tax laws by not paying in the use tax they owed.
And a similar thing may start happening now that the reporting threshhold for having online sales is dropping to just $600. So anyone just casually running a few sales through Ebay, or maybe through their own site where they take payment through some service like Paypal - Goods & Services, may now start getting a 1099-K form reporting those sales as income. And copies of those 1099-K forms will also all be going to the IRS, who will match every single one of them back to the tax return of the person or entity that the sales proceeds went to. And unless people/entities start including these reported gross taxable sales proceeds on their tax returns, and then deduct any eligible tax deductible expenses against those reported gross sales proceeds so they only end up paying income taxes on their net taxable income, the IRS will consider 100% of those reported 1099-K sales proceeds as their taxable income. And the IRS will likely consider that as subject to self-employment taxes also.
There are probably quite a few people, maybe a million plus, or even more, in the past that got away with never reporting and paying taxes on these small businesses they've actually been operating all along. Whether they really didn't know they were supposed to, or did know and simply chose to not follow the tax laws, it won't make a difference going forward as the IRS will now have this info in their system. I am merely mentioning it so people know what they may be looking forward to. For whatever reason, this new $600 reporting threshhold didn't make a big splash when it first got passed back in this past Spring. As we're getting closer to 2022, when this takes effect, seems people are finally picking up on this new law change and starting to pay attention to it.
As I've mentioned on this forum in the past, people who are into and collect/deal in sports cards and memorabilia can end up in any one (and possibly multiple) category(ies) as either what I have termed a dealer, investor, or collector. And depending on what category(ies) they may fall into, each one has seperate and distinct federal income tax consequences that come from sales of items that person has that fall under each of those categories.
Quite frankly, this new tax reporting rule is going to turn out to be a real pain in the arse for an awful lot of people.