Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 5:20 pm

Just to be clear, What you described is not a business. Definitely don't file as a business as you will get extra Self Employment taxes. What you describes is more a hobbyist (or occasional seller), and there are different rules for hobbyists. You can deduct some expenses (fees, shipping, original item cost, etc.) , but you cannot use losses to help negate other taxable income (you could if you were a business, but then there are different taxes involved too).


A business would be someone buying with the intent to resell. I believe businesses can deduct more kinds of expenses than Hobbyists, but don't quote me on that. Things like space in your house relegated for the business. Mileage applies to business, but I am unclear if it applies to Hobbyists. I am still trying to get clarification on that.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 5:28 pm

maverick10126 wrote:
Thu Apr 08, 2021 4:30 pm
I don't think anyone is arguing against someone not paying taxes on 100k a year or 45-60k a year. I'm not sure where you brought those numbers in from. The objections generally are around the $600 limit.

Someone selling $600 of stuff a year is not a business. If they are then that's a very poor business.

Ebay isn't differentiating between someone selling stuff they purchased new vs someone cleaning out their closet or purging. $600 in sales is $600 to them.

The argument is that $600 is an awfully low threshold to have set in place.

This isn't going to affect my habits though personally, I'm not going to drop ebay. I'm just going to raise the prices on all the stuff I sell on there. My ebay habits are like this, every now and then when my collection is getting too large, I thin it out and sell my stuff on ebay. I don't have receipts for everything but generally I can say yes, figures cost me $20 new. Most of those figures will be sold at the break even cost or some at a loss. But I'd rather have the money back in my pocket than have the extra clutter. Sometimes a new version of a figure comes along and I sell the old one because I like the new version more. The old one sometimes happens to be worth more. But once again, ebay doesn't care if I sell a figure at a loss or a profit. A sale is a sale to them. I'm not an active flipper but I am an active purger. My collection grows and contracts all the time and it's pretty damn easy for me to get over $600 worth in sales a year. I just sold off two large lego sets and my total was $600. I didn't flip them for profit, I just decided I didn't want them anymore and made back roughly what I purchased them for. But now, with just those two sales, I'm now a business by their standards and would need receipts to itemize the original purchase price.

It's just a low bar....and there's a big difference between 45k-60k or 100k and $600. I don't know what the limit should be, but I feel like $600 is way too low.
And my point is, people underestimate how much resellers/scalpers/flippers bring in. Most clear 40k a year easily as a side job. You don't think all those Facebook, ebay and marketplace fakes business that resell on Amazon and Walmart make that much?

$600 while low, is still enough for people to purge garage sale style. People who purge large collections are not the norm. Let's not kid ourselves, we're all hardcore collectors and have virtually enough merchandise to open a small toy store. And by saying " The old one sometimes happens to be worth more" you're essentially profiting like a business or an investment.

On the other side of resellers, there are people who treat collectibles like an investment, however, they don't want them to be taxed as such. Can't have your cake and eat it too. Tax man's always got to take a cut. Trust me, I hate it too actually.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 6:07 pm

mattmurdog wrote:
Thu Apr 08, 2021 5:28 pm
maverick10126 wrote:
Thu Apr 08, 2021 4:30 pm
I don't think anyone is arguing against someone not paying taxes on 100k a year or 45-60k a year. I'm not sure where you brought those numbers in from. The objections generally are around the $600 limit.

Someone selling $600 of stuff a year is not a business. If they are then that's a very poor business.

Ebay isn't differentiating between someone selling stuff they purchased new vs someone cleaning out their closet or purging. $600 in sales is $600 to them.

The argument is that $600 is an awfully low threshold to have set in place.

This isn't going to affect my habits though personally, I'm not going to drop ebay. I'm just going to raise the prices on all the stuff I sell on there. My ebay habits are like this, every now and then when my collection is getting too large, I thin it out and sell my stuff on ebay. I don't have receipts for everything but generally I can say yes, figures cost me $20 new. Most of those figures will be sold at the break even cost or some at a loss. But I'd rather have the money back in my pocket than have the extra clutter. Sometimes a new version of a figure comes along and I sell the old one because I like the new version more. The old one sometimes happens to be worth more. But once again, ebay doesn't care if I sell a figure at a loss or a profit. A sale is a sale to them. I'm not an active flipper but I am an active purger. My collection grows and contracts all the time and it's pretty damn easy for me to get over $600 worth in sales a year. I just sold off two large lego sets and my total was $600. I didn't flip them for profit, I just decided I didn't want them anymore and made back roughly what I purchased them for. But now, with just those two sales, I'm now a business by their standards and would need receipts to itemize the original purchase price.

It's just a low bar....and there's a big difference between 45k-60k or 100k and $600. I don't know what the limit should be, but I feel like $600 is way too low.
And my point is, people underestimate how much resellers/scalpers/flippers bring in. Most clear 40k a year easily as a side job. You don't think all those Facebook, ebay and marketplace fakes business that resell on Amazon and Walmart make that much?

$600 while low, is still enough for people to purge garage sale style. People who purge large collections are not the norm. Let's not kid ourselves, we're all hardcore collectors and have virtually enough merchandise to open a small toy store. And by saying " The old one sometimes happens to be worth more" you're essentially profiting like a business or an investment.

On the other side of resellers, there are people who treat collectibles like an investment, however, they don't want them to be taxed as such. Can't have your cake and eat it too. Tax man's always got to take a cut. Trust me, I hate it too actually.
I get where you are coming from on this. I personally just find it annoying. Yes I could flip all my old stuff garage sale style but really, that's the whole point of ebay in the first place. Year round garage sale and a better chance of actually moving the items I want to move. I've posted tons of SW stuff at garage sales. Old POTF2-04 Saga figures. These aren't worth much, they have all dropped in value. I listed them at $1 each at a garage sale. I moved about 10 figures. Garage sale shoppers just weren't interested and whatever price you do have stuff listed for they want to offer you half that. They know that a garage sale has a limited market, a limited number of shoppers. The benefit of ebay is the huge amount of foot traffic. I ended up unloading all of those figures on ebay….for $1 each but the point was I moved them.

Yes I have sold some figures that have made me money. But for every Rogue I profited on after the fact (let's remember I never planned on selling her) I've also taken a hit on figures like Dazzler.

It's an annoying threshold to be thinking of. But I guess I'm simply going to have to document stuff a little bit more. If I'm now going to be looked at like a business I'll just have to take note of my profits and losses, cost of packing materials, cost of gas etc.

Just a lot of extra effort for someone who operates at my range of sales. But I guess this is just the result of what inevitably happens in life.....some people ruined it for the rest of us and now everyone suffers.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 6:25 pm

600 is the threshold for any kind of income, across the board. It's not a random number.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 6:29 pm

What a joke. Selling $600+ a month would be a better place to start. $50 a month is going to make things very complicated, very quickly. They're going to be up to their knees auditing people if they follow through correctly. I really doubt they can keep up (but don't take my word for it and ignore this news).

Thanks for sharing OP
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 6:34 pm

Threash wrote:
Thu Apr 08, 2021 6:25 pm
600 is the threshold for any kind of income, across the board. It's not a random number.
Would "arbitrary" be more of a key word? It almost feels like a number utilized when the american dollar went further, and $600 wasn't practically chump change when spread over an entire year's worth of transactions.

To put a burden of taxation on a hobby that generates $600 in profit is like robotically issuing speeding tickets for a fraction of a mile an hour over the speed limit; yeah, you're absolutely tagging someone exceeding that limit, no question, but is that really the tiny scope by which one should operate? The number itself needs adjustment, and congress not doing so while passing a federal reform in policy that sweeps across an entire nation of 350 million people seems absurdly irresponsible.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 9:02 pm

maverick10126 wrote:
Thu Apr 08, 2021 6:07 pm
Just a lot of extra effort for someone who operates at my range of sales. But I guess this is just the result of what inevitably happens in life.....some people ruined it for the rest of us and now everyone suffers.
Yeah, definitely a case of rotten apples spoiling the bunch. 25 years ago...what's reselling? Huh? What? Now...everywhere you turn, people are reselling, if not outright scalping, everything they can. Tickets (pre-pandemic anyway, and they'll eventually get that back), game consoles, shoes, collectibles, even certain daily essentials aren't safe anymore from time to time. Obviously, it existed 25 years ago, there's evidence of ticket scalping in ancient times even, but it's reached a saturation point that's pretty disgusting, due to how much easier it's become in the last 20 years or so. It wasn't going to be so overlooked by the tax code forever, but this is just poor implementation. One extreme to the other.

There was anti-scalper legislation under Obama, that Lin-Manuel Miranda pushed hard for due to scalping of Hamilton tickets, but it was ultimately pretty toothless. This too probably won't help the situation much, just provide more headache for people trying to enjoy a hobby.
Threash wrote: 600 is the threshold for any kind of income, across the board. It's not a random number.
And there are still a few places in the tax code that use the exact same dollar amounts that were in place from the big '86 code overhaul. 1986 dollars do not equal 2021 dollars. The tax code is unwieldy. They try to keep things simpler for themselves by using the same numbers where they can, and I don't necessarily blame them, but it wouldn't hurt to put a little more thought into it now and again.
jimbles wrote: Would "arbitrary" be more of a key word? It almost feels like a number utilized when the american dollar went further, and $600 wasn't practically chump change when spread over an entire year's worth of transactions.

To put a burden of taxation on a hobby that generates $600 in profit is like robotically issuing speeding tickets for a fraction of a mile an hour over the speed limit; yeah, you're absolutely tagging someone exceeding that limit, no question, but is that really the tiny scope by which one should operate? The number itself needs adjustment, and congress not doing so while passing a federal reform in policy that sweeps across an entire nation of 350 million people seems absurdly irresponsible.
Yeah, arbitrary is a very good word for it. Copy/paste instead of applying thought to it.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Fri Apr 09, 2021 1:18 am

The 1099-MISC $600 threshold has been in place since 1954. I checked a few different sites that calculate inflation, and the consensus is that $600 is around $5,800 in today’s money.

I don’t think $5,000 would be an unreasonable threshold, but it needs to be adjusted for inflation more often than every 67 years (and counting).
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Fri Apr 09, 2021 1:41 am

domu wrote:
Thu Apr 08, 2021 3:22 am
JTMarsh wrote:
Thu Apr 08, 2021 2:14 am
In all fairness the Washington Post is owned by Amazon. So that claim of "fact" should come with an asterisk. Just pointing this out for everyone's benefit considering the source and the special dispensations its parent gets over just about everyone else.
Is this a joke? One Google news search on corporate tax rates brings up articles that say the same thing from the New York Times, Bloomberg, Reuters, Business Insider, Fox Business, NPR, etc., etc. You should be embarrassed.
The post he's referring to talked about Amazon being bestowed with certain privileges while smaller businesses get crushed. I pointed out the irony in trying refute such claims by using an Amazon-owned paper. This is the part where you tell us how Amazon just announced via WaPo they're excited to pay their "fair share" in taxes that smaller business owners aren't able to avoid, and will no longer be using special tax and shipping dispensations granted them by the govt. You could also try questioning why all your corporate news sources run the same line as you unwittingly strengthen my argument. Likewise, there's some naivete in assuming just because the money was apportioned for your outlined "good causes" that it will actually go to them. California teachers unions are already talking about using state and federal Covid relief funds to finance $2,500-$6k bonuses for teachers union members as well as potential vacation packages. Reading for context and comprehension should never make one feel embarrassed.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Fri Apr 09, 2021 3:23 am

Nearly every news source in this country is owned by a larger conglomerate (including local newspapers and local news affiliates). I'd love to hear what you define as a non-corporate news source.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Fri Apr 09, 2021 4:34 am

TheSameIdiot wrote:
Fri Apr 09, 2021 3:23 am
Nearly every news source in this country is owned by a larger conglomerate (including local newspapers and local news affiliates). I'd love to hear what you define as a non-corporate news source.
Such a smart one, you got almost the entire point! For those playing at home read the answer in a mirror.

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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Fri Apr 09, 2021 4:56 am

Xavion2004 wrote:
Fri Apr 09, 2021 1:18 am
The 1099-MISC $600 threshold has been in place since 1954. I checked a few different sites that calculate inflation, and the consensus is that $600 is around $5,800 in today’s money.

I don’t think $5,000 would be an unreasonable threshold, but it needs to be adjusted for inflation more often than every 67 years (and counting).
Wow, well dang. I knew my hunch was coming from somewhere. That's absolutely absurd that they would pass along such an outdated threshold.

...or at least i would say that, until you consider that the political ruling class utilizes outdated numbers constantly in order to get things to blow favorably in their direction. Inflation is the name of the game, and when you're a have instead of a have-not, getting all of your otherwise pricier material advantages in life put into the pricing standards of decades past can save you literal millions. Just look at the systemic corruption of California's politically untouchable Prop 13, and the protections that it applies to coastal millionaires and old money families. Conversely, the closer you get to the poverty line, the worse it is to be pitted against figures unchanged by inflation.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Fri Apr 09, 2021 12:46 pm

This was an interesting article from Turbo Tax. It sounds like if you file as a business you can deduct what you spent on the item originally. That should fix things for most of us. The hard part will be how to prove what you spent on it if you don’t have receipts. Also I know when I sell on eBay I tend to sell a group of figures as one lot so it might be hard for me to figure out what the actual cost was. From now on I will be keeping a spreadsheet to help me out I guess. Pain in the butt but it will save me in the end. I doubt I have seen $600 in profit per year but I have sold more than $600 per year especially that one year.
https://www.google.com/amp/s/turbotax.i ... /L7h6uJr0i
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Fri Apr 09, 2021 2:18 pm

JTMarsh wrote:
Fri Apr 09, 2021 4:34 am
TheSameIdiot wrote:
Fri Apr 09, 2021 3:23 am
Nearly every news source in this country is owned by a larger conglomerate (including local newspapers and local news affiliates). I'd love to hear what you define as a non-corporate news source.
Such a smart one, you got almost the entire point! For those playing at home read the answer in a mirror.

.snoinipo ruoy epahs ot ereht er'yeht, uoy mrofni ot ereht ton er'yeht esuaceb s'tI

I honestly don't know how we're supposed to coexist in this country when we don't share a common reality. Anyway, enjoy the journalistic integrity of thefreeeagle.com or whatever.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Fri Apr 09, 2021 2:34 pm

Yeah, I just plan on spreadsheeting it to keep track. I'll make note of original purchase price and any figures sold at a loss. That should take care of most of it.

Yes I agree, $600 in todays world is not the same as 1954. This is why I felt the $600 was a joke of a threshold. I'm all for paying taxes but it seems silly for them to target in on the tax of $600. For anyone the IRS had to audit at that amount, they would be losing money.

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