Ebay tax reporting drops from $20,000 to $600

[Exhibitman]

Paying taxes you owe isn't new. The only thing that is new is eBay reporting our sales to the IRS directly so they can catch scofflaws who do not report their income or pay taxes on their profits. If you maintain accurate books and declare your income from cards already, the 1099 is a popcorn fart. I get dozens of them every year (lawyers get 1099d for everything) and just toss 'em in the shredder since I have accurate books I can document as needed.

Note that taxes are paid on profits, not gross receipts, as Bob pointed out. If you sell a card for $10 that cost you $9 you pay tax on the $1 profit. If that puts you at a loss with eBay fees, you need to be in a different business because your margins are too thin.

[BobC]

Originally Posted by Exhibitman

Paying taxes you owe isn't new. The only thing that is new is eBay reporting our sales to the IRS directly so they can catch scofflaws who do not report their income or pay taxes on their profits. If you maintain accurate books and declare your income from cards already, the 1099 is a popcorn fart. I get dozens of them every year (lawyers get 1099d for everything) and just toss 'em in the shredder since I have accurate books I can document as needed.

Note that taxes are paid on profits, not gross receipts, as Bob pointed out. If you sell a card for $10 that cost you $9 you pay tax on the $1 profit. If that puts you at a loss with eBay fees, you need to be in a different business because your margins are too thin.

Adam,

You need to incorporate so they don't have to send you 1099s anymore. LOL

For the ones you do get though, I hope you at least take a quick look at them before they are shredded. In the past, I've had clients get 1099s that reported incorrect amounts, and we'd contact the issuer to get it corrected before filing my client's tax return so it didn't screw things up. You never know!

[RL]

you are supposed to claim the income to the IRS regardless of a 1099

[Snapolit1]

At some point in 2022 this is going to cease to be breaking news, right?

People were getting their piss hot about this last August.

[BobC]

Originally Posted by Snapolit1

At some point in 2022 this is going to cease to be breaking news, right?

People were getting their piss hot about this last August.

Last August??? This was signed into law back on 3/11/2021. A colleague and I were talking about it right after, and knew then this would create one heck of a $#%©storm when everyone finally realized what was happening. Some people/clients we told about it right away were having a fit after we had explained what this would mean. Thing is, it was buried in the American Rescue Plan Act, and no one in the media ever really talked about it. That is what usually happens with some of these random tax law changes, until the tax season hits, and then everyone finally hears about it and creates an uproar. This delayed reaction isn't something new. In fact, I can almost guarantee that come this time next year, there will still be people just finding out about this reporting change when their 1099-K form shows up in their mailboxes, totally unexpected! LOL

[Michael B]

Bob,

I admire your willingness to assist all of the handwringers. And gratis, no less! The patience of Job. I get it all the time even from people in my own office. Explaining the UCC code and District of Columbia statutes on property law. I learned 4 simple rules over 30 years ago that have helped. I sleep quite well obeying them.

1. Use/consult a tax professional.
2. Report your income.
3. Pay your taxes.
4 When in doubt refer to Rule #1.

I have used the same person since 1989 and the guidance has been invaluable.

[BobC]

Originally Posted by Michael B

Bob,

I admire your willingness to assist all of the handwringers. And gratis, no less! The patience of Job. I get it all the time even from people in my own office. Explaining the UCC code and District of Columbia statutes on property law. I learned 4 simple rules over 30 years ago that have helped. I sleep quite well obeying them.

1. Use/consult a tax professional.
2. Report your income.
3. Pay your taxes.
4 When in doubt refer to Rule #1.

I have used the same person since 1989 and the guidance has been invaluable.

Thanks, appreciate that. I didn't bother chiming in much over the years, but more recently have gotten tired of seeing people who clearly have no real tax experience or knowledge posting tax related comments and responses that are so wrong, it is not funny. And then I think of all the people that end up reading those posts who may actually think what they are reading is true or correct, and it starts bothering the heck out of me. Especially with all the tax crap that has been happening over the last 4-5 years, and is going to continue going forward. I'm not really telling anyone what they should or shouldn't do when it comes to their taxes, just providing some info and background so they can hopefully make a better, more well-informed decision for themselves. And with the way flippers and investors have really invaded our hobby in recent years, along with the seemingly insane surge in prices, we are definitely becoming more noticeable to tax authorities. And they can (and already have in many cases) also influence and impact how people decide to eventually report their hobby activities and reflect such on their tax returns.

Glad to hear you've got your own trustworthy, long term, tax person. That can make life a lot easier for many people. Not necessarily for everyone, but for way more people than you can probably imagine. And absolutely love your four rules, especially #4. Have my own mantra I've repeated over the years that I always liked to tell clients: Tax evasion is a crime, but tax avoidance is your Constitutional and God given right!

And as for offering help gratis, wasn't looking for anything. But I do collect a lot of different pre- and post-war sets and cards, and seem to especially like oddball and obscure things. So if anyone got some knowledge and help from my posts, and feels so inclined to send me a duplicate or extra card/item or two they may have no real use or need for as thanks, I won't say no. LOL.

I don't know everything, but if someone has questions, I'll try to help. Thanks.

[bobbyw8469]

Originally Posted by BobC

Last August??? This was signed into law back on 3/11/2021. A colleague and I were talking about it right after, and knew then this would create one heck of a $#%©storm when everyone finally realized what was happening. Some people/clients we told about it right away were having a fit after we had explained what this would mean. Thing is, it was buried in the American Rescue Plan Act, and no one in the media ever really talked about it. That is what usually happens with some of these random tax law changes, until the tax season hits, and then everyone finally hears about it and creates an uproar. This delayed reaction isn't something new. In fact, I can almost guarantee that come this time next year, there will still be people just finding out about this reporting change when their 1099-K form shows up in their mailboxes, totally unexpected! LOL

Elections have consequences. And we are sure as heck paying the price now.

[earlywynnfan]

Originally Posted by bobbyw8469

Elections have consequences. And we are sure as heck paying the price now.

They do, but did you like it better when the IRS was toothless and people weren't paying their fair share? Why blame the currently-elected people for this?

My students have games to play when it's indoor recess. Two of the games have a gazillion pieces, and often they are left lying around. So I have pulled those games from the shelf. Some students blame me because they can't play them now, and some students blame the kids who couldn't clean the games up in the first place. Who would you blame?

[BobC]

Originally Posted by bobbyw8469

Elections have consequences. And we are sure as heck paying the price now.

YUP!!!

But to be fair, probably doesn't matter who's in office as they need to cover and at least try to start paying back all the increased debt we've had due to the pandemic. The interest alone we paid last year was over half a trillion $ I believe. If they have to start raising interest rates in an attempt to curb inflation, we could be in for a world of hurt.

And for now, they're initially trying to increase compliance and enforcement of the existing tax laws before raising the rates, or creating new ones. Or they may just wait. Don't forget that a large part of the individual tax laws and reductions passed back in 2017 are scheduled to expire at the end of 2025, with no one doing anything.