Possible new tax law?

yanks12025 · #1 03-07-2021, 11:24 AM

This was posted over on blowout. Haven't seen it posted here, unless I missed it.

But it looks like a new tax law could be coming where the ebay 20k and 200 transactions goes away and the new limit will now be anything over $600..

* Also you should pay taxes no matter what whether you get a 1099 or not.

https://www.politico.com/news/2021/0...-losers-473902

Schlesinj · #2 03-07-2021, 11:52 AM

From article "For those in the sharing economy, the issue is provisions that would dramatically reduce the threshold at which companies like eBay, GrubHub, Doordash and others would have to report to the IRS the earnings of people who use their platforms to make money. The users would also have to be given the information.

Currently, that’s only necessary when someone earns more than $20,000 through at least 200 transactions. Democrats would drop that to anyone earning more than $600, regardless of the number of transactions.

That’s projected to generate a lot of money — $8.4 billion over the next decade, according to an official forecast — because people are more likely to pay taxes on their earnings when they know someone else is telling the IRS how much they made."

rats60 · #3 03-07-2021, 11:57 AM

I don't see what the issue is. If you are reporting sales/profits and paying tax, this is irrelevant. Only those that are not paying the tax that they should are going to be upset.

Johnny630 · #4 03-07-2021, 11:59 AM

Quote:

Originally Posted by rats60

I don't see what the issue is. If you are reporting sales/profits and paying tax, this is irrelevant. Only those that are not paying the tax that they should are going to be upset.

Exactly

Republicaninmass · #5 03-07-2021, 12:01 PM

I do report all, and had over the $ amount but "only" 197 transcations last year!

Exhibitman · #6 03-07-2021, 12:45 PM

Quote:

Originally Posted by rats60

I don't see what the issue is. If you are reporting sales/profits and paying tax, this is irrelevant. Only those that are not paying the tax that they should are going to be upset.

Precisely! The doomsayers are just a bunch of tax cheats unhappy that they may not be able to free-ride on the rest of us anymore. Well on behalf of everyone who pays their taxes:

BTW, the $600 mark isn't chosen at random. It is already used as a floor for things like casual labor taxation.

yanks12025 · #7 03-07-2021, 12:57 PM

Quote:

Originally Posted by Exhibitman

Precisely! The doomsayers are just a bunch of tax cheats unhappy that they may not be able to free-ride on the rest of us anymore. Well on behalf of everyone who pays their taxes:

BTW, the $600 mark isn't chosen at random. It is already used as a floor for things like casual labor taxation.

MA changed to the $600 mark couple years back for things like ebay and stuff..

Just figured some members here would like to know about a possible change so they can keep better records of purchases and sales going forward.

doug.goodman · #8 03-07-2021, 01:51 PM

Quote:

Originally Posted by yanks12025

MA changed to the $600 mark couple years back for things like ebay and stuff..

Just figured some members here would like to know about a possible change so they can keep better records of purchases and sales going forward.

MA has been $600 for as far back as (at least) the year 2000. That's the tear that a member of the MA Tax Commissioner's office sat in my office for 7 hours at the Warped tour show so that they could make sure that the 100 or so bands I was paying to play on the Warped tour that day were all compliant with their filings of MA state tax. Even though only the Bosstones and the Dropkick Murphy's were the only MA residents.

It's only in the last few years that they have realized that ebay sales were a similar "missed" tax stream, due to people not filing on their own, so they have started to crack down.

Doug

Bobbycee · #9 03-07-2021, 01:02 PM

Quote:

Originally Posted by Exhibitman

Precisely! The doomsayers are just a bunch of tax cheats unhappy that they may not be able to free-ride on the rest of us anymore. Well on behalf of everyone who pays their taxes:

BTW, the $600 mark isn't chosen at random. It is already used as a floor for things like casual labor taxation.

Or, just maybe, some of us are way past tired for getting hit up again for more taxes. You ever think of that? I pay more than my fair share of taxes but am sick and tired of politicians of finding new ways to hit us up for more.

Johnny630 · #10 03-07-2021, 01:21 PM

Quote:

Originally Posted by Bobbycee

Or, just maybe, some of us are way past tired for getting hit up again for more taxes. You ever think of that? I pay more than my fair share of taxes but am sick and tired of politicians of finding new ways to hit us up for more.

I agree get ready for more they’re only going up.

Proceed with crying towel and wet floor signs about political references this is about baseball cards lol

Either way irregardless all sales had to be reported before anyways

doug.goodman · #11 03-07-2021, 01:47 PM

Quote:

Originally Posted by Bobbycee

Or, just maybe, some of us are way past tired for getting hit up again for more taxes. You ever think of that? I pay more than my fair share of taxes but am sick and tired of politicians of finding new ways to hit us up for more.

You're not getting hit up again for more, you are getting hit up again for those that you already owe but evidently have not been paying.

Doug "pay your damn taxes and shut up about it" Goodman

doug.goodman · #12 03-07-2021, 01:45 PM

Quote:

Originally Posted by Exhibitman

BTW, the $600 mark isn't chosen at random. It is already used as a floor for things like casual labor taxation.

Exactly.

If I hire somebody to help clean my house, or mow my lawn, I have to report what I pay them to the IRS as soon as that amount hits $600 during a calendar year.

Nobody actually does it, but technically that has been the law for a long time. It has nothing to do with Democrats and Republicans and Trumpers and non Trumpers.

doug.goodman · #13 03-07-2021, 01:57 PM

Quote:

Originally Posted by Schlesinj

... Democrats would drop that to anyone earning more than $600, regardless of the number of transactions.

That’s projected to generate a lot of money — $8.4 billion over the next decade, according to an official forecast — because people are more likely to pay taxes on their earnings when they know someone else is telling the IRS how much they made."

Another way to state it would be "Democrats would have us follow the laws that are already on the books and stop everyone whether Democrat, Republican or other with failing to report income on which $8.4 billion in tax is due."

todeen · #14 03-07-2021, 03:26 PM

This thread has given me a new faith in humanity.

Sent from my SAMSUNG-SM-G930A using Tapatalk

MooseDog · #15 03-07-2021, 03:36 PM

It's really simple, run and treat your eBay sales as a business. The (legal) deductions available to one running a business will mitigate any tax issues you might have otherwise. Just a sample of expense deductions:

Postage (in and out)
eBay Fees
PayPal Fees
Taxes (some)
Accounting/bookkeeping/legal fees
Mileage (with some limitations)
Office Supplies (everything from envelopes to ink for the printer)
Subscriptions (services like Worthpoint and VCP)

That's just a start.

samosa4u · #16 03-07-2021, 04:32 PM

I want to tell you folks a story here about something that happened in Canada a few years ago. Now, I can't remember all the details, but it goes something like this: the CRA (Canada Revenue Agency) wanted Paypal to hand over all the information on their Canadian users. The reason for this was obvious: lots of Canadians were making big Paypal sales and not reporting it. I think Paypal at first refused to hand anything over, but then I believe the CRA went to the Federal Court and the judge gave Paypal two options: either cooperate with the CRA or get out of the country. Paypal had no choice here but to hand everything over. I'm pretty sure THOUSANDS of Canadians got into BIG trouble! Now, I don't think police officers kicked their doors down and arrested them or anything like that, however, they did have to pay their taxes AND interest AND massive fines!

Mike D. · #17 03-07-2021, 05:36 PM

This will be a significant expense for the eBays and Ubers of the world. I hope they remember to claim that on their taxes.

Less funny is that the added expense will be passed on to customers.

topcat61 · #18 03-11-2021, 06:31 AM

Ebay has been inconsistent in their sales tax collection since the start and people have complained about it for years. In fact the only reason why ebay collects sales tax is because the Supreme Court overturned their 1992 decision to allow internet business who don't have a physical presence in the state to collect on their behalf.

It's not that I don't trust ebay (I don't), but I'd like a complete break down on these taxes and "applicable fees" with an audit.

Is ebay including the shipping charge as a part of the overall sale and basing the amount of tax on that? I'm not a fan of ebay for all sorts of reasons and they're not the most transparent company to do business with.

Directly · #19 03-11-2021, 06:41 AM

Does PayPal send out 1099's ?-say a buyer pays $100,000 for products through their system--

bnorth · #20 03-11-2021, 07:10 AM

Quote:

Originally Posted by Directly

Does PayPal send out 1099's ?-say a buyer pays $100,000 for products through their system--

A 1099 is for a seller.

Directly · #21 03-11-2021, 10:53 AM

FYI--I was informed the new reporting 600.00 in sales law doesn't go into effect until next year (2022)

IronHorse2130 · #22 03-11-2021, 08:15 PM

Quote:

Originally Posted by Directly

FYI--I was informed the new reporting 600.00 in sales law doesn't go into effect until next year (2022)

I took a look at that part of the bill and it wasn't clear to me if it takes effect in 2022, meaning people will first receive a 1099 in 2023 or in 2022 for sales that took place in 2021.

swarmee · #23 03-11-2021, 07:17 PM

Quote:

Originally Posted by topcat61

Is ebay including the shipping charge as a part of the overall sale and basing the amount of tax on that? I'm not a fan of ebay for all sorts of reasons and they're not the most transparent company to do business with.

If you find the right screen in eBay's seller pages, they do have a breakdown chart of shipping/fees/etc vs. the straight sale price of the item. It's in one of the blowout tax threads. If I find the instructions to get to it, I'll update this post.

jayshum · #24 03-12-2021, 01:03 PM

It's been a long time since I signed up for eBay or PayPal so I don't remember, but I don't think I had to give them my social security number to get an account. Also, I have only sold a few things on eBay so maybe it's different for large volume sellers, but how can either eBay or PayPal submit any tax information to the IRS about sales someone makes without a social security number to submit it under?

thecatspajamas · #25 03-12-2021, 01:44 PM

By the end of the year, eBay will require most if not all sellers to enroll in Managed Payments, which requires their social to be provided for enrollment, so it will be a moot point for eBay. I would imagine other selling platforms though will require their sellers to provide whatever information is necessary for them to remain federally compliant as a condition of continued use of their platform as a seller. I see a lot of TOS revisions coming.