Ebay’s New Payment Routine

[Guy In Lyon]

I was burned pretty badly by Ebay about five years ago, and I will never sell there again.

That being said, I never allowed Ebay or PayPal access to any bank account as I know people that have been burned REALLY badly by doing so.

YMMV of course.

[Guy In Lyon]

21 minutes ago, metacometcc said:

I just signed up for the new sales program as well on ebay. I am just 

a hobby seller with maybe 15 sales a year. All used stuff.

Curious as to why they asked for social security number when

signing up. Is this to report sales to tax authorities? Just trying to

understand why Ebay required this information. Thanks

Be prepared for those 15-sales-per-year to result in a 1099 to the IRS. PayPal did that to me a few years ago, which meant that I had to pay income taxes on a thousand or so dollars. Since it was all old-stuff-lying-around-the-house I had no receipts for their purchase, meaning that I couldn't even file a Schedule C to deduct costs to even things out.

[Guy In Lyon]

20 hours ago, golffeen007 said:

No , that’s not accurate. Not if you’re proactive and call eBay to make your case. I’ve had it happen twice lately where the buyer said it wasn't as described because the shaft was not the stiffness they were hoping the said X was.

I sold a camera on EBay. It was in excellent condition, as the listing photos showed.

The buyer said that it wasn't as described as he could see rust on the camera's shutter. There was no way to open the camera to look at the shutter...

They sided with the buyer and when I got they camera back there was a crack in it that had not been there. When I complained to EBay they dismissed my complaint.

I haven't sold anything on EBay since.

[Bigjim1022]

22 hours ago, Guy In Lyon said:

Be prepared for those 15-sales-per-year to result in a 1099 to the IRS. PayPal did that to me a few years ago, which meant that I had to pay income taxes on a thousand or so dollars. Since it was all old-stuff-lying-around-the-house I had no receipts for their purchase, meaning that I couldn't even file a Schedule C to deduct costs to even things out.

They may send a 1099 but the IRS only cares if you sell over a certain dollar amount, $20,000 in electronic payments I think.  Here in VT I’ve been getting a 1099 for a few years because the state changed the tax laws.  I forget the exact rules on “hobby selling” when it comes to taxes but I look it up every year when I file.  

Edited November 30, 2020 by Bigjim1022

[Rdriver]

Just sold an item for $202.50 and paid $27.37 in fees.  

[Bigjim1022]

4 minutes ago, Rdriver said:

Just sold an item for $202.50 and paid $27.37 in fees.  

So about 13.5% of the transaction.  I think that’s slightly higher than before but I can’t remember the exact structure.  

[brew4eagle]

10 minutes ago, Bigjim1022 said:

So about 13.5% of the transaction.  I think that’s slightly higher than before but I can’t remember the exact structure.  

Depends on shipping costs, sales tax, etc.  Fee structure is set up to be just slightly lower, but not significant.

[icecat88]

Sold item on the 26th , shipped the 27th, email from Paypal today the 30th says funds are being sent to to bank account and will be available in 3-5 days. Item is still in transit 

Edited November 30, 2020 by icecat88

[Guy In Lyon]

On 11/29/2020 at 2:26 PM, Bigjim1022 said:

They may send a 1099 but the IRS only cares if you sell over a certain dollar amount, $20,000 in electronic payments I think.  Here in VT I’ve been getting a 1099 for a few years because the state changed the tax laws.  I forget the exact rules on “hobby selling” when it comes to taxes but I look it up every year when I file.  

$20,000? Try $600.

 

If someone sends you a 1099 the IRS expects you to pay tax on the income.

 

The only thing that comes from declaring your income as a hobby is that you may not deduct most expenses, and is therefore undesirable.

 

"Many people enjoy hobbies that are also a source of income. From painting and pottery to scrapbooking and soapmaking, these activities can be sources of both fun and finances. Taxpayers who make money from a hobby must report that income on their tax return."

 

"If a taxpayer receives income for an activity that they don’t carry out to make a profit, the expenses they pay for the activity are miscellaneous itemized deductions and can no longer be deducted. The taxpayer must still report the income they receive on Schedule 1, Form 1040, line 21."

 

https://www.irs.gov/newsroom/tips-for-taxpayers-who-make-money-from-a-hobby

[Bigjim1022]

1 hour ago, Guy In Lyon said:

$20,000? Try $600.

 

If someone sends you a 1099 the IRS expects you to pay tax on the income.

 

The only thing that comes from declaring your income as a hobby is that you may not deduct most expenses, and is therefore undesirable.

 

"Many people enjoy hobbies that are also a source of income. From painting and pottery to scrapbooking and soapmaking, these activities can be sources of both fun and finances. Taxpayers who make money from a hobby must report that income on their tax return."

 

"If a taxpayer receives income for an activity that they don’t carry out to make a profit, the expenses they pay for the activity are miscellaneous itemized deductions and can no longer be deducted. The taxpayer must still report the income they receive on Schedule 1, Form 1040, line 21."

 

https://www.irs.gov/newsroom/tips-for-taxpayers-who-make-money-from-a-hobby

Yeah sorry I wasn’t clear and shouldn’t have tried to respond from memory.  This is what I was referring to.

 

And really, if you aren’t making a profit it isn’t income-for instance buying a driver for $400 and selling it for $350. 
 

I guess I should also add that 1099’s aren’t just for income.  The ones PayPal have been sending are for electronic payments received.  It’s basically money I’ve received that I have to explain. In my case, only the state of VT cared, not the irs.

 

this of course may change with managed payments. 

Edited December 1, 2020 by Bigjim1022

[Rdriver]

I’m all ready having issues with the new payment system.  They sent me the first payment of around $420 with no issues.  The next payment of $42 didn’t go through and it says for me to check my banking info or contact my bank.  I guess eBay thinks I changed my banking info in the last 3 days. 

[Guy In Lyon]

20 hours ago, Bigjim1022 said:

Yeah sorry I wasn’t clear and shouldn’t have tried to respond from memory.  This is what I was referring to.

 

And really, if you aren’t making a profit it isn’t income-for instance buying a driver for $400 and selling it for $350. 
 

I guess I should also add that 1099’s aren’t just for income.  The ones PayPal have been sending are for electronic payments received.  It’s basically money I’ve received that I have to explain. In my case, only the state of VT cared, not the irs.

 

This statement about PayPal is pure BS. They sent me a 1099 one year with a little over $1000 in "sales" to fewer than 20 people.

 

Form 1099 is something who's sole purpose is to show income. A Form 1099-MISC is for miscellaneous income, a Form 1099-GOV is for income from a government (state income tax refund for example) and Form 1099-DIV is for dividends paid to you. There are other 1099s.

 

As far as the IRS is concerned you have to pay income tax on any income. They don't care if you're making a profit or not. If you buy a club for $400 and sell it for $350 you owe tax on the $350, unless your TOTAL income, including golf club sales, is less than $12,400 in 2020.. If you file a Schedule C for your "golf club business" and have documentation you can declare the $350 income and off-set the $400 cost-of-goods against the income, declaring a loss of $50. If you've been receiving income, particularly income that has generated 1099s,  and only paying VT state tax on it, there could well a day of reckoning with the IRS.

 

Good luck if that happens.

Edited December 2, 2020 by Guy In Lyon

[Guy In Lyon]

1 minute ago, Guy In Lyon said:

 

 

Edited December 2, 2020 by Guy In Lyon

[DFW Snowman]

58 minutes ago, Guy In Lyon said:

This statement about PayPal is pure BS. They sent me a 1099 one year with a little over $1000 in "sales" to fewer than 20 people.

 

Form 1099 is something who's sole purpose is to show income. A Form 1099-MISC is for miscellaneous income, a Form 1099-GOV is for income from a government (state income tax refund for example) and Form 1099-DIV is for dividends paid to you. There are other 1099s.

 

As far as the IRS is concerned you have to pay income tax on any income. They don't care if you're making a profit or not. If you buy a club for $400 and sell it for $350 you owe tax on the $350, unless your TOTAL income, including golf club sales, is less than $12,400 in 2020.. If you file a Schedule C for your "golf club business" and have documentation you can declare the $350 income and off-set the $400 cost-of-goods against the income, declaring a loss of $50. If you've been receiving income, particularly income that has generated 1099s,  and only paying VT state tax on it, there could well a day of reckoning with the IRS.

 

Good luck if that happens.

 

Did you live in Massachusetts or Vermont at the time?  Those are the only states where PayPal issues a 1099-K if you have less than $20k in sales across at least 200 transactions.  Otherwise, they follow those thresholds as those are the amounts set by the IRS.  Or did you have other sales outside of eBay that were paid for using PayPal?  PayPal doesn't care where the sale occurred.

 

Here's the PayPal link:

https://www.paypal.com/us/smarthelp/article/how-does-paypal-report-my-sales-to-the-irs-will-i-receive-a-tax-form-1099-k-faq729

 

Here's the IRS link stating those same $20k AND 200 transaction thresholds:

https://www.irs.gov/businesses/understanding-your-form-1099-k

 

I have had around $10k in sales the past couple of years and not received a 1099-K.  This year, I will probably have a little more than $20k but only across about 150 transactions, so I would not expect to get one this year either.  

 

 

[Bigjim1022]

4 hours ago, DFW Snowman said:

 

Did you live in Massachusetts or Vermont at the time?  Those are the only states where PayPal issues a 1099-K if you have less than $20k in sales across at least 200 transactions.  Otherwise, they follow those thresholds as those are the amounts set by the IRS.  Or did you have other sales outside of eBay that were paid for using PayPal?  PayPal doesn't care where the sale occurred.

 

Here's the PayPal link:

https://www.paypal.com/us/smarthelp/article/how-does-paypal-report-my-sales-to-the-irs-will-i-receive-a-tax-form-1099-k-faq729

 

Here's the IRS link stating those same $20k AND 200 transaction thresholds:

https://www.irs.gov/businesses/understanding-your-form-1099-k

 

I have had around $10k in sales the past couple of years and not received a 1099-K.  This year, I will probably have a little more than $20k but only across about 150 transactions, so I would not expect to get one this year either.  

 

 

Thank you, just got home from work and was about to search for those links!  
 

I know a few years back, maybe 3 now, when I got my first 1099 I scoured and researched and finally got professional advice on how to file. 

[Bigjim1022]

5 hours ago, Guy In Lyon said:

This statement about PayPal is pure BS. They sent me a 1099 one year with a little over $1000 in "sales" to fewer than 20 people.

 

Form 1099 is something who's sole purpose is to show income. A Form 1099-MISC is for miscellaneous income, a Form 1099-GOV is for income from a government (state income tax refund for example) and Form 1099-DIV is for dividends paid to you. There are other 1099s.

 

As far as the IRS is concerned you have to pay income tax on any income. They don't care if you're making a profit or not. If you buy a club for $400 and sell it for $350 you owe tax on the $350, unless your TOTAL income, including golf club sales, is less than $12,400 in 2020.. If you file a Schedule C for your "golf club business" and have documentation you can declare the $350 income and off-set the $400 cost-of-goods against the income, declaring a loss of $50. If you've been receiving income, particularly income that has generated 1099s,  and only paying VT state tax on it, there could well a day of reckoning with the IRS.

 

Good luck if that happens.

I think we are using income and profit in the same way not can’t be certain.  If I’m not making a profit (hence income) there isn’t any tax due.

 

I just reread your post and have to say I am fairly certain you are incorrect in having to lay income tax in the $350.  In my example, you’re selling at a loss.  No profit (income) is made.  You don’t owe tax on the $350 or any if it for that matter.  If you sold for $450, then $50 would be income and hence taxable in the most basic sense.  This doesn’t take into account deductions, depreciation and a number of other factors. 
 

 It gets complicated for sure and I’d recommend anybody in this situation getting professional advice and not take what 2 people in a golf forum say as gospel.  
 

Regardless the managed payment system opens up the opportunity for eBay to send 1099’s maybe, unless there is some tax law or something that shields sellers from having to declare income.  eBay is basically an online garage sale and not many people need to claim income from garage sales.  

Edited December 3, 2020 by Bigjim1022

[VNutz]

14 hours ago, Bigjim1022 said:

I think we are using income and profit in the same way not can’t be certain.  If I’m not making a profit (hence income) there isn’t any tax due.

 

I just reread your post and have to say I am fairly certain you are incorrect in having to lay income tax in the $350.  In my example, you’re selling at a loss.  No profit (income) is made.  You don’t owe tax on the $350 or any if it for that matter.  If you sold for $450, then $50 would be income and hence taxable in the most basic sense.  This doesn’t take into account deductions, depreciation and a number of other factors. 
 

 It gets complicated for sure and I’d recommend anybody in this situation getting professional advice and not take what 2 people in a golf forum say as gospel.  
 

Regardless the managed payment system opens up the opportunity for eBay to send 1099’s maybe, unless there is some tax law or something that shields sellers from having to declare income.  eBay is basically an online garage sale and not many people need to claim income from garage sales.  

I believe if you talk to an honest and strict with the rules accountant, any time you take in money in theory you need to document and pay taxes on, garage sales included. It's income, you pay tax on your income. The government doesn't know or care what your profit is and they unless you go further and claim losses with receipts as mentioned, which many hobby guys actually have to do.

 

But I'm just a dude talking on a golf forum with no tax expertise.

Edited December 3, 2020 by VNutz

[Bigjim1022]

49 minutes ago, VNutz said:

I believe if you talk to an honest and strict with the rules accountant, any time you take in money in theory you need to document and pay taxes on, garage sales included. It's income, you pay tax on your income. The government doesn't know or care what your profit is and they unless you go further and claim losses with receipts as mentioned, which many hobby guys actually have to do.

 

But I'm just a dude talking on a golf forum with no tax expertise.

Yeah if you dig into it, selling at a loss doesn’t generate income though, that’s where I’m coming from.  If you have no income there is no income tax due.  
 

I guess that’s what I was trying to say, not very clearly though 😂

[Guy In Lyon]

17 hours ago, Bigjim1022 said:

I think we are using income and profit in the same way not can’t be certain.  If I’m not making a profit (hence income) there isn’t any tax due.

 

I just reread your post and have to say I am fairly certain you are incorrect in having to lay income tax in the $350.  In my example, you’re selling at a loss.  No profit (income) is made.  You don’t owe tax on the $350 or any if it for that matter.  If you sold for $450, then $50 would be income and hence taxable in the most basic sense.  This doesn’t take into account deductions, depreciation and a number of other factors. 
 

 It gets complicated for sure and I’d recommend anybody in this situation getting professional advice and not take what 2 people in a golf forum say as gospel.  
 

Regardless the managed payment system opens up the opportunity for eBay to send 1099’s maybe, unless there is some tax law or something that shields sellers from having to declare income.  eBay is basically an online garage sale and not many people need to claim income from garage sales.  

You seem to be misunderstanding a few basics.

 

Income is any money that you receive.

 

ANY money that you receive.

 

Profit, or loss,  is the difference between what you have paid for something vs. what you are able to sell it for.

 

Income is one thing, profit is another. The IRS is concerned with income, and they could give a d**n about profit, unless you file something like a Schedule C, in which case you can deduct your costs from you income, which results in your profit.

 

Please, be aware that if you have been receiving 1099s (generally 1099-MISC forms) and not declaring them on your Federal tax returns, you may be in for a huge surprise when the IRS decides to "correct" things.

 

 

[Guy In Lyon]

2 hours ago, Bigjim1022 said:

.. selling at a loss doesn’t generate income though, that’s where I’m coming from.  If you have no income there is no income tax due.

The IRS does not care about profit and loss. They care about income.

[larryd3]

If you have real questions on all of this, get with a tax professional for your specific needs.  

[Bigjim1022]

24 minutes ago, Guy In Lyon said:

You seem to be misunderstanding a few basics.

 

Income is any money that you receive.

 

ANY money that you receive.

 

Profit, or loss,  is the difference between what you have paid for something vs. what you are able to sell it for.

 

Income is one thing, profit is another. The IRS is concerned with income, and they could give a d**n about profit, unless you file something like a Schedule C, in which case you can deduct your costs from you income, which results in your profit.

 

Please, be aware that if you have been receiving 1099s (generally 1099-MISC forms) and not declaring them on your Federal tax returns, you may be in for a huge surprise when the IRS decides to "correct" things.

 

 

This simply isn’t accurate.  I received a 1099 from PayPal because the state of VT changed their tax laws.  The IRS didn’t care at all and I’m not 100% certain that the irs even received a copy of it because I didn’t reach the IRS thresholds talked about in previous posts.  
 

And for the rest, a tax professional is probably the best bet. 
 

 

 

[Golfrnut]

I just sold two things recently on ebay, in both cases, funds went to my paypal account.  Been no change here for me so far. 🤷‍♂️

[golffeen007]

Just now, Golfrnut said:

I just sold two things recently on ebay, in both cases, funds went to my paypal account.  Been no change here for me so far. 🤷‍♂️

Change isn't effective until 2021 unless you've already updated your payment settings I believe. 

[Golfrnut]

Just now, golffeen007 said:

Change isn't effective until 2021 unless you've already updated your payment settings I believe. 

👍

[Bigjim1022]

1 hour ago, golffeen007 said:

Change isn't effective until 2021 unless you've already updated your payment settings I believe. 

Or if eBay sends you an email saying it’s time to update.  That happened to me 🤷🏻‍♂️

[golffeen007]

10 minutes ago, Bigjim1022 said:

Or if eBay sends you an email saying it’s time to update.  That happened to me 🤷🏻‍♂️

They did me too lol - I just ignored it for now.... 

[VNutz]

Just now, golffeen007 said:

They did me too lol - I just ignored it for now.... 

Same. Getting emails and push notifications now. Might have to make a sales push before they force me into it.

[ALTSean]

39 minutes ago, VNutz said:

Same. Getting emails and push notifications now. Might have to make a sales push before they force me into it.

 

I got an email and an offer for $15 in credit if I switched now.  I went ahead and switched because it sounds mandatory next year anyway so I might as well get $15 out of it.  

[Bigjim1022]

2 hours ago, ALTSean said:

 

I got an email and an offer for $15 in credit if I switched now.  I went ahead and switched because it sounds mandatory next year anyway so I might as well get $15 out of it.  

Did you get your coupon? I didn’t.  🤷🏻‍♂️