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

[radiman]

Am I the only one that is not as concerned about what the IRS finds out as much as I am my wife? haha.  

[TwistedSister]

30 minutes ago, Ezekial said:

Has anyone gone through a tax situation where you purchased a full set (driver through putter) on eBay as a single purchase, and sold parts of it off that passes the $600 mark, but still have the rest and still below what you paid for the whole set. Is still a loss? It’s odd to me because you won’t have an itemized receipt of your original purchase because it was all bought off 1 listing but then you sold it in multiple.

It is not a big deal unless you are audited.  Just put the value of the items you sold as an offset.  You do not send any receipts in anyway. 

[TreeHugger73]

1 hour ago, Ezekial said:

Has anyone gone through a tax situation where you purchased a full set (driver through putter) on eBay as a single purchase, and sold parts of it off that passes the $600 mark, but still have the rest and still below what you paid for the whole set. Is still a loss? It’s odd to me because you won’t have an itemized receipt of your original purchase because it was all bought off 1 listing but then you sold it in multiple.

 

As @TwistedSister said, this doesn't really matter unless you get audited. And, the chance of having your ebay sales audited is so infinitesimally small you shouldn't even worry about it. 

 

But if you are going to worry about it, make a good faith effort to break out the "purchase" price for each item. For something like that, there is no cut and dry right answer. 

 

As long as you make sure that you are reporting all of your sales in the proper place (Almost always Schedule D,) you will be fine. The IRS has your sales information, but not your purchase information and, 99.999999% of the time, will accept what you say the purchase price is.

 

 

[Rory4Pres]

[TwistedSister]

1 hour ago, TreeHugger73 said:

 

 The IRS has your sales information, but not your purchase information and, 99.999999% of the time, will accept what you say the purchase price is.

 

 

That % is probably accurate unless you claim an outlandish purchase price.

[Krt22]

20 minutes ago, TwistedSister said:

That % is probably accurate unless you claim an outlandish purchase price.

I am guessing if you are a very high volume seller and turn very little profit, you might get some extra scrutiny from the army of new IRS agents about to come onboard

[GwrxMod]

Posts removed.

 

No politics. Some of you know this but still won't or can't help yourselves. Final warning. 

 

 

[coreyhr]

Any other psychopaths like me finally realizing how many golf clubs you truly buy and sell in a year due to now keeping up with a spreadsheet? I'm now over $12,000 in total sales for the year. Lol. The good news is that my net loss for the year is $62.76, so I've done pretty well. If not for the $400 in shipping costs, I would have actually made money. I just hope the IRS doesn't give me a hard time, because on the surface it would almost appear I'm selling golf clubs as a business (albeit a terrible one). 

[davo32683]

4 hours ago, coreyhr said:

Any other psychopaths like me finally realizing how many golf clubs you truly buy and sell in a year due to now keeping up with a spreadsheet? I'm now over $12,000 in total sales for the year. Lol. The good news is that my net loss for the year is $62.76, so I've done pretty well. If not for the $400 in shipping costs, I would have actually made money. I just hope the IRS doesn't give me a hard time, because on the surface it would almost appear I'm selling golf clubs as a business (albeit a terrible one). 

I'm terrified to get my 1099 from eBay, Facebook, Paypal and Venmo. My wife cannot see those docs. I'm realizing now I should have kept a spreadsheet, but I change like underwear. I couldn't even keep up with that.

 

My bigger concern is what I do when I've helped friends and/or family sell off stuff they had laying around. I'm going to get punished for helping people out 🤬

[endy]

5 hours ago, coreyhr said:

Any other psychopaths like me finally realizing how many golf clubs you truly buy and sell in a year due to now keeping up with a spreadsheet? I'm now over $12,000 in total sales for the year. Lol. The good news is that my net loss for the year is $62.76, so I've done pretty well. If not for the $400 in shipping costs, I would have actually made money. I just hope the IRS doesn't give me a hard time, because on the surface it would almost appear I'm selling golf clubs as a business (albeit a terrible one). 

I have done the same thing, and it’s a pretty crazy number unfortunately 😂. I have only been documenting goods/services transactions also, probably another 25-30 percent of sales have gone through FF. 

[VNutz]

1 hour ago, davo32683 said:

I'm terrified to get my 1099 from eBay, Facebook, Paypal and Venmo. My wife cannot see those docs. I'm realizing now I should have kept a spreadsheet, but I change like underwear. I couldn't even keep up with that.

 

My bigger concern is what I do when I've helped friends and/or family sell off stuff they had laying around. I'm going to get punished for helping people out 🤬

I actually have several bags of gear in my basement for this very reason. Agreed to sell for a friend but got hit with my own 1099 before I started moving them. Haven't figured out a good way to do so unless I control some account of his, which I'm not sure I want to do.

[brew4eagle]

I started keeping a spreadsheet last year as I've had to account for the sales the last few years because of my state tax rules.  I am able to show a loss, but for the amount of gear I've moved I'm surprised the loss isn't that bad.  I do think the need to keep the spreadsheet has slowed down the hoin' a lot.

[brew4eagle]

4 hours ago, davo32683 said:

I'm terrified to get my 1099 from eBay, Facebook, Paypal and Venmo. My wife cannot see those docs. I'm realizing now I should have kept a spreadsheet, but I change like underwear. I couldn't even keep up with that.

 

My bigger concern is what I do when I've helped friends and/or family sell off stuff they had laying around. I'm going to get punished for helping people out 🤬

Just keep a spreadsheet showing those transactions as 'Net $0' since for friends.  Not a big deal at all.  (They're the ones that need to do the accounting for those items.)

Edited December 16, 2022 by brew4eagle

[third-times-a-charm]

Too lazy for a spreadsheet. Gonna claim everything as a virtual garage sale and call it a day.

[Steele47]

 

87,000 they're saying..

[Mustu]

https://www.wsj.com/articles/irs-delays-gig-tax-filing-rule-for-side-hustles-of-more-than-600-11671815725?mod=panda_wsj_author_alert

 

Looks like the 1099-k reporting has been delayed for a year.

[BirdieBob]

The Internal Revenue Service on Friday said that it is delaying by one year a new tax reporting requirement targeting Americans who made more than $600 online through third-party payment apps like Venmo or PayPal. 

"The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan," said Doug O'Donnell, the acting IRS commissioner. "To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes."

The delay comes after backlash from bipartisan lawmakers, small business owners and tax professionals to the policy, which was enacted in 2021 by Democrats as part of the American Rescue Plan and supposed to take effect this year.

 

 

 

Edited December 23, 2022 by BirdieBob

[awtryau89]

So you mean all that time I spent on my spreadsheet was wasted? Good thing though. I’m over $11k for 2022. Probably not even close to some of you guys but still a nice chunk I don’t have to justify to the IRS. 

[TreeHugger73]

1 hour ago, awtryau89 said:

So you mean all that time I spent on my spreadsheet was wasted? Good thing though. I’m over $11k for 2022. Probably not even close to some of you guys but still a nice chunk I don’t have to justify to the IRS. 

Call it practice for next year. Or, you are now prepared for microscopically small chance that you get in person audited for 2021. 
 

The IRS needs to get their heads out of their butts and start to index some of these numbers to inflation. The $600 reporting limit goes back to 1954. $600 in 1954 had the same purchasing power as $6000ish today. 
 

A limit around that number seems a lot more reasonable than $600. 

[wobgon]

Great news....I can't remember what the limit is from last year.....I live in pa.....Anyone know?

[puresurfr]

26 minutes ago, wobgon said:

Great news....I can't remember what the limit is from last year.....I live in pa.....Anyone know?

 

I believe the old limit was 20k or 200 transactions

[wobgon]

4 minutes ago, puresurfr said:

 

I believe the old limit was 20k or 200 transactions

Thanks....

[jblough99]

This is great news!  I was planning on holding off selling a few things until next year as not to add to the ridiculous amount my PayPal will show this year.  Guess I should get rid of everything now and start fresh next year.

[rainkingjr]

So here is the thing I want to know, why did I receive 1099K's from Ebay and Paypal last year? I did not have 200 transactions or over $20,000 in sales. Can anyone enlighten me? What does it mean for this year if they once again send them to me and I have not reached those thresholds? Do I ignore them?

[cardia10]

I think the big thing to remember is that it is all still reportable. If you need the loss, you can still use it. The bad thing will be when an audit happens and they want your last few years and you all the sudden show you did 10k that year. They will question why you haven’t been documenting it in the past. You know they already have the financial info for PayPal and others. 

[Ezekial]

It may be your state of residence, some already had a lower threshold (for state tax purposes).

[brew4eagle]

3 hours ago, rainkingjr said:

So here is the thing I want to know, why did I receive 1099K's from Ebay and Paypal last year? I did not have 200 transactions or over $20,000 in sales. Can anyone enlighten me? What does it mean for this year if they once again send them to me and I have not reached those thresholds? Do I ignore them?

As mentioned above it's probably your state rules.  I live in VA and have received 1099K's the last 2 years and expect 1 this year.

[dwboston]

7 hours ago, rainkingjr said:

So here is the thing I want to know, why did I receive 1099K's from Ebay and Paypal last year? I did not have 200 transactions or over $20,000 in sales. Can anyone enlighten me? What does it mean for this year if they once again send them to me and I have not reached those thresholds? Do I ignore them?

 

Where do you live?  Some states have lower thresholds than the federal government for a 1099-K to be generated.  Massachusetts is one.

 

I don't ignore it.  I include it as a line item "Used golf equipment sold at a loss" (which it is) and offset it with a negative dollar amount.

 

From the IRS: 

"If you receive a Form 1099-K for a personal item sold at a loss, report the information on Form 1040, Schedule 1, Additional Income and Adjustments to Income with offsetting transactions. For example, if you receive a Form 1099-K for selling your couch online for $700 you will report:

• Part I – Line 8z – Other Income – Form 1099-K Personal Item Sold at a Loss $700
• Part II – Line 24z – Other Adjustments - Form 1099-K Personal Item Sold at a Loss $700

The net effect of these two adjustments on adjusted gross income would be $0."

 

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

Edited December 27, 2022 by dwboston

[rainkingjr]

5 hours ago, dwboston said:

 

Where do you live?  Some states have lower thresholds than the federal government for a 1099-K to be generated.  Massachusetts is one.

 

I don't ignore it.  I include it as a line item "Used golf equipment sold at a loss" (which it is) and offset it with a negative dollar amount.

 

From the IRS: 

"If you receive a Form 1099-K for a personal item sold at a loss, report the information on Form 1040, Schedule 1, Additional Income and Adjustments to Income with offsetting transactions. For example, if you receive a Form 1099-K for selling your couch online for $700 you will report:

• Part I – Line 8z – Other Income – Form 1099-K Personal Item Sold at a Loss $700
• Part II – Line 24z – Other Adjustments - Form 1099-K Personal Item Sold at a Loss $700

The net effect of these two adjustments on adjusted gross income would be $0."

 

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

Maryland.

[wobgon]

Are we sure this has been pushed back a year....A friend told me he saw something about it on the news today and they said it was in effect....He said he didn't catch the whole conversation.