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New 1099k rules...and how it impacts gear junkies/golfers. Is this actually a good thing? CPAs feel free to chime in (merged)


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3 minutes ago, golffeen007 said:

Are you certain this passed? I was just told by my buddy that owns a shop here this didn't pass? His mother being an accountant , she was under the impression that it fell through... 

They may be talking about the requirement for banks that would need to notify the IRS if a certain threshold was passed.  That has not passed yet.

 

https://www.forbes.com/sites/ebauer/2021/10/16/heres-why-actually-the-irs-600-bank-reporting-proposal-is-entirely-reasonable/?sh=191e6198843b

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1 minute ago, Abh159 said:

 

Passed in March of last year and went into effect on January 1st of this year. 

 

I'm not sure I'd let your buddy's mom do your taxes anymore 😬.

She doesn't do my taxes , but thanks. I've not kept up with the progress of the ruling or when it became effective across the 48. 
He's about half a mil shop that does quite a bit of online sales from trade ins and such. I was just going to give him a heads up that she may want to revisit her conclusion lol. 

 

 

 

 

 

 

 

 

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11 minutes ago, golffeen007 said:

Are you certain this passed? I was just told by my buddy that owns a shop here this didn't pass? His mother being an accountant , she was under the impression that it fell through... 

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

if your buddy has a legit shop and has been doing 500k+ he likely doesn't have much to worry about, as he should already be filing as a regular business (and likely already getting a 1099k if he uses paypal as his payment processor) 

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eBay has it plastered all over their rules now that any sells in excess of $600 for a year will now receive the 1099. I pulled 50 items off and will sell locally for cash only. May not make quite as much as I hoped, but my money is taxed when I earn it, when I spend it then when I sell….I’ve tried to tell people my money is not our money but No one is taking the hint. 

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7 minutes ago, Krt22 said:

 

 

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

if your buddy has a legit shop and has been doing 500k+ he likely doesn't have much to worry about, as he should already be filing as a regular business (and likely already getting a 1099k if he uses paypal as his payment processor) 

Yeah , he's got a legit shop , but online sales via eBay , FB that were used trade ins that have no real established value to him before the online sale is the question that comes up. He would max out the 20k pretty fast unless itemized to show each as a loss. I haven't actually had a chance to read the entire IRS link yet.  I just got off the phone with him and he's calling his accountant (not his mom haha ) 

 

 

 

 

 

 

 

 

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2 minutes ago, cardia10 said:

eBay has it plastered all over their rules now that any sells in excess of $600 for a year will now receive the 1099. I pulled 50 items off and will sell locally for cash only. May not make quite as much as I hoped, but my money is taxed when I earn it, when I spend it then when I sell….I’ve tried to tell people my money is not our money but No one is taking the hint. 

 Is it not $600 per transaction or $20k gross per year that doesnt exceed 200 transactions? I wasn't aware of the eBay posting..

 

 

 

 

 

 

 

 

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Just now, golffeen007 said:

 Is it not $600 per transaction or $20k gross per year that doesnt exceed 200 transactions? I wasn't aware of the eBay posting..

No, $600 total for a year. Basically anyone selling a driver here and a set of irons will get a 1099. They may not owe, but they will have to show the loss or a “hobby loss” which most of us can do, but is cumbersome for some guys selling some clubs. 

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Just now, cardia10 said:

No, $600 total for a year. Basically anyone selling a driver here and a set of irons will get a 1099. They may not owe, but they will have to show the loss or a “hobby loss” which most of us can do, but is cumbersome for some guys selling some clubs. 

That is eBay, PayPal, Zelle, Venmo. Any payment platform. It will be shocking next Jan. when all these 1099s go out. 

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2 minutes ago, cardia10 said:

That is eBay, PayPal, Zelle, Venmo. Any payment platform. It will be shocking next Jan. when all these 1099s go out. 

 

2 minutes ago, dcmidnight said:

 

3 minutes ago, cardia10 said:

No, $600 total for a year. Basically anyone selling a driver here and a set of irons will get a 1099. They may not owe, but they will have to show the loss or a “hobby loss” which most of us can do, but is cumbersome for some guys selling some clubs. 

Thanks guys , just checked out the links provided. Gonna be a little ridiculous for us club hoe guys. I guess there's no real time like the present to play one set for an entire year or more! Blasphemy!  Sucks , but this may actually make my game better 😂

 

 

 

 

 

 

 

 

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22 minutes ago, cardia10 said:

eBay has it plastered all over their rules now that any sells in excess of $600 for a year will now receive the 1099. I pulled 50 items off and will sell locally for cash only. May not make quite as much as I hoped, but my money is taxed when I earn it, when I spend it then when I sell….I’ve tried to tell people my money is not our money but No one is taking the hint. 

If you're selling for less than you paid then you won't be subject to any taxes.  Just subject to paperwork.

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9 minutes ago, Abh159 said:

 

Probably a lot of one time sales for $599.99 🤣

 

Unfortunately it is a total of 600 so the next item you sell for 1 cent will trigger a 1099k lol 

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15 minutes ago, Abh159 said:

 

Probably a lot of one time sales for $599.99 🤣

Perhaps. I envision you will see more legitimate businesses formed and fewer small time flippers. Similar type of consolidation you see in all other forms of commerce where you need certain volume in order for it to make sense, otherwise the juice isn't worth the squeeze

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I guess now was a bad time to clean out all my old clubs,.

 

Not really sure how they can know/prove if you sold for a loss or profit.  Some things I am selling are 5 years old, I dont have the original receipt for it, I dont even remember what I paid for it. 

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On 1/21/2022 at 9:40 PM, wobgon said:

I was told that refunds thru paypal also are added to the total....Anyone know if this is the case?

I recieved a 1099K from Paypal yesterday. The total did not include refunds. Only payments received under goods and services.

 

My question for any tax experts (particularly in Maryland), is do I have to file for the 2021 year. I read that thses rules were supoosed to apply for all transactions after Dec 31, 2021? Going to give m y tax guy a call tomorrow. Already compiled a spreadsheet covering all sales. Definitely lost money like a good club Ho.

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49 minutes ago, rainkingjr said:

I recieved a 1099K from Paypal yesterday. The total did not include refunds. Only payments received under goods and services.

 

My question for any tax experts (particularly in Maryland), is do I have to file for the 2021 year. I read that thses rules were supoosed to apply for all transactions after Dec 31, 2021? Going to give m y tax guy a call tomorrow. Already compiled a spreadsheet covering all sales. Definitely lost money like a good club Ho.

Not a tax expert...  However, Maryland like my state (VA) instituted this rule early (2020 in VA) so if you received a 1099K for 2021 you should account for it on your return as the IRS received a copy of your 1099K.

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5 minutes ago, brew4eagle said:

Not a tax expert...  However, Maryland like my state (VA) instituted this rule early (2020 in VA) so if you received a 1099K for 2021 you should account for it on your return as the IRS received a copy of your 1099K.

Typical over taxed states. They pounce on every oppurtunity to squeeze you for a little more.  Glad I already have the numbers sorted,

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32 minutes ago, rainkingjr said:

Typical over taxed states. They pounce on every oppurtunity to squeeze you for a little more.  Glad I already have the numbers sorted,

If you look at the bigger picture beyond hobby buying/selling and think of all the unreported, taxable income people receive by PayPal G/S (and similar payment services) then it makes a lot of sense to me.  

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6 minutes ago, brew4eagle said:

If you look at the bigger picture beyond hobby buying/selling and think of all the unreported, taxable income people receive by PayPal G/S (and similar payment services) then it makes a lot of sense to me.  

Yeah, but in the end, it's always the little guy that is impacted most. We're pretty much being forced into one giant inconvenience because others' abuses. It's just pure laziness on the government's part, which is typical.

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9 hours ago, mizunoMP14 said:

I guess now was a bad time to clean out all my old clubs,.

 

Not really sure how they can know/prove if you sold for a loss or profit.  Some things I am selling are 5 years old, I dont have the original receipt for it, I dont even remember what I paid for it. 

 

If asked...YOU have to prove it or pay taxes on the transaction!

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It’s a pretty useless rule in my opinion.  Any business using PayPal deposits to their bank eventually, or they’re spending direct from pay pal.  Guess what. Theyre certainly claiming that spending as deductions. So they surely are counting the deposits too otherwise the red flags would be a flying.  So the aim here has to be to pinch the individual.  Not businesses.  
 

 

good news is.  This will drive up cash use , thus helping the paper currency to survive. 
 

 

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I got my 1099k from Paypal yesterday and it was pretty easy to chart out the expenses and losses. Always remember to put notes in your BST paypal transactions guys! After all the damage the  losses were only a few hundred bucks. Less than a camera lens so my hobbies aren't particularly destructive to the wallet I guess. 

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10 minutes ago, bladehunter said:

It’s a pretty useless rule in my opinion.  Any business using PayPal deposits to their bank eventually, or they’re spending direct from pay pal.  Guess what. Theyre certainly claiming that spending as deductions. So they surely are counting the deposits too otherwise the red flags would be a flying.  So the aim here has to be to pinch the individual.  Not businesses.  
 

 

good news is.  This will drive up cash use , thus helping the paper currency to survive. 
 

 

I agree. I expect to see an uptick in ads for local pick-up only. 

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26 minutes ago, BirdieBob said:

 

If asked...YOU have to prove it or pay taxes on the transaction!

Agree, and the first step of being "asked" is the 1099K.  At that point it's on you to figure out your tax liability, if any.

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1 hour ago, rainkingjr said:

I agree. I expect to see an uptick in ads for local pick-up only. 

Or, an addtiional 10% sent via family and friends to cover taxes 🤣

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