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 12:29 am

supreme-d wrote:
Wed Apr 07, 2021 11:39 pm
jimbles wrote:
Wed Apr 07, 2021 11:31 pm
Exactly. It becomes a more enticing target for attack, thus more valuable for time spent going after it. The sheer volume of identity credentials will be staggering with that low of a requirement.... I don't trust corporate enterprise for beans when it comes to these types of things.
Do you know about the SolarWinds attack? I barely trust the government with my identifying information any more.
I'm right there with you. The government buries its own issues in bureaucratic investigations with no results or admission of liability, and then shields corporations whenever they do the same. Equifax, etc.

I just really, REALLY would never put my identity in the hands of a corporation that is, by nature of fiduciary obligation towards shareholders, required to cut corners in the name of profits.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 12:31 am

mrboshek wrote:
Wed Apr 07, 2021 10:32 pm
I was expecting this to happen because some States already enacted the $600 threshold. My State is currently at $20K, which I guess is considered the federal limit before a 1099. A few years ago I went over the 20K amount. I went through every eBay sale that year and tried to determine what I paid for each item. I just had a small profit once all fees (eBay/PayPal) and expenses (postage/shipping supplies) were deducted. If you're a collector, you are going to have some high profit items and a lot of things that are selling for way below what you originally paid. I think most people will find they barely break even. My expenses seem to be around 30% for each sale and that doesn't factor in the amount I paid to originally purchase the item.
The problem is, most aren't going to feel it's worth going back through all that to try to determine all the costs.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 12:53 am

Good ole Uncle Sam. Charge me tax on shipping then lose my package. @$!%^#*. Better get back to the Flea Market.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 1:47 am

christianpyro wrote:
Wed Apr 07, 2021 10:18 pm
If we can keep the politics out of this thread, it might not get nuked and may be beneficial in getting the word out and
Yes please, this thread has already been very beneficial for me. Big thanks to everyone posting info.

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

Thu Apr 08, 2021 2:14 am

TheSameIdiot wrote:
Wed Apr 07, 2021 2:55 pm
If you're going to make this political, at least try to base it in fact. Biden and Democrats are looking to raise the corporate tax rate and taxes on the wealthy.
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.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

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.
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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 am

mrboshek wrote:
Thu Apr 08, 2021 12:21 am

I approximated the amounts paid for each item because I didn't have receipts for every figure. I downloaded the eBay spreadsheet and added my own column for the price I paid for each item. Most items were fairly recent and I had to hope the IRS would understand modern action figures tend to have a mostly standard retail price, if they were to question my numbers. This occurred during the 2016 tax year. I filed with my Mom's accountant that year. She did not include an item by item break down on the tax return. It was pretty much Gross sales - Expenses - Retail Price = Net Sales. She kept a copy of my spreadsheet, any receipts I could gather, and any purchase records I could pull from my online accounts from stores like bbts and Amazon, just in case they should be questioned. So far, so good.
Thank you, that is good information to keep in mind.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 7:13 am

supreme-d wrote:
Wed Apr 07, 2021 6:58 pm
mattmurdog wrote:
Wed Apr 07, 2021 5:55 pm
As someone that doesn't sell, and sells to purge not "side hustle" this is a good thing, which I know is not a popular opinion. Hopefully it can drive down scalpers and resellers which has been so toxic to the collecting community. I wouldn't mind if resellers without a business license are taxed even more. If you want to be a service or business and profit, please go through the proper channels like everyone else.

Should I feel bad for all those opportunistic flippers who bought multiple Sentinels trying to profit and rip other collectors off? Naw...
I think you’re being very shortsighted. This isn’t just about the action figure collecting community. You created this straw man where everyone who makes over $599 over the course of a year selling things has a “side hustle” or is “opportunistic” (as if those are inherently negative qualities and not the underlying ethos of American capitalism), but that’s not the case for a large number people selling things on eBay. Even if it were true, why should the government get paid twice through taxation for the same item, having added no value to the product? It’s rent seeking behavior coming at the worst time for a lot of people.

Side note: Who gets a business license to sell the stuff in their attic? eBay is one of the “proper channels”, I don’t know why you’d suggest otherwise.

It is not in the interest of the average taxpayer to pay the IRS to keep track of informal market at such a low level. Your argument in support of this seems to be that you want to “own the scalpers”, not your own economic self-interest or even the interest of your fellow collectors.
None of what you've implied is accurate but I can understand how my previous comment makes you think otherwise. I view it as a blanket statement on all resellers who make this their "business" and not necessarily just toy scalpers. Yes, the govt is getting paid twice but that's because people have been abused and perverting the system.

Let's start by actually defining what's happening. Because there's a difference between selling something with depreciating value to get rid of (garage sale), verse buying at MSRP and then reselling it for profit and wanting to call it a business (ebay store). Someone selling junk isn't going to make 100k a year like resellers who flip PS5s or shoes. I have a coworker who flips shoes and makes 45-60k a year all tax free. Sorry but not sorry, it's time for these people to pay their dues. When I invest in stocks and sell for capital gains, I get taxed short and long. Why shouldn't these people?
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 7:48 am

I haven't started selling again since last fall and ebay started the Managed Payments, and honestly, I'm terrified by everything I've heard. Giving them your Social Security Number, some people saying that you have to give them your bank ID and password. Don't know how much of it is actually true as I've slacked on actually entering the checking account info so far.

I don't have a ton of discretionary income for toys, so I fund new purchases by selling off older stuff I'm not that interested in anymore. This is all too much for me just to maintain a hobby.

I'm going to sell everything I can this year to pay off the $900 or so I have on the credit card I use to buy toys, then I'm done. I'll pick the stuff I think will sell quickly and whatever I haven't sold is just going to Goodwill.

Any future toy purchase for me are going to be random one-offs, gifts from my family or bought with gift cards. No more collecting lines like Marvel Legends.

I got really tired of re-selling last year and this is just a sign for me to hang it up.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 1:58 pm

Yeah, I'll pitch my figures in the garbage before I'll give ebay or paypal my SSN. I've had to fight with places like my dentist's office who tried insisting I give them my SSN.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 2:26 pm

mrboshek wrote:
Wed Apr 07, 2021 10:32 pm
I was expecting this to happen because some States already enacted the $600 threshold. My State is currently at $20K, which I guess is considered the federal limit before a 1099. A few years ago I went over the 20K amount. I went through every eBay sale that year and tried to determine what I paid for each item. I just had a small profit once all fees (eBay/PayPal) and expenses (postage/shipping supplies) were deducted. If you're a collector, you are going to have some high profit items and a lot of things that are selling for way below what you originally paid. I think most people will find they barely break even. My expenses seem to be around 30% for each sale and that doesn't factor in the amount I paid to originally purchase the item.
True but the hard thing is proving it if you don’t have receipts. The one year I qualified I was caught totally off guard and due to family health issues sold off probably 80-90% of what I had collected over the years. If you factored in the original costs, eBay & pay pal fees, shipping and packaging, etc. I doubt I even made 5%. Might have even lost money but again without the actual receipts there is no way I could prove that to the IRS. Thankfully some things like the fees I had proof for and to some extent the shipping but beyond that I had nothing. Needless to say it was a very nasty surprise at tax time.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 3:10 pm

The $600 threshold is not new. This is already the law in Massachussetts. And the internet and eBay didn’t break here.

An FAQ: https://www.mass.gov/service-details/fr ... ty-payment


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

Thu Apr 08, 2021 3:40 pm

Akatsuki wrote:
Thu Apr 08, 2021 3:10 pm
The $600 threshold is not new. This is already the law in Massachussetts. And the internet and eBay didn’t break here.

An FAQ: https://www.mass.gov/service-details/fr ... ty-payment


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It is true that some states were subject to this lower threshold for their state taxes already. The change for them is now it will be subject to to their Federal taxes as well. So more taxes will be owed.
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Re: Sellers will be sent a 1099 (taxable income) if they sell $600 + starting 2022

Thu Apr 08, 2021 3:48 pm

Yes. The point is the sky isn’t falling and this isn’t some brand new tax idea. The concept is already in place in some states. This is creating national consistency on the issue.


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

Thu Apr 08, 2021 4:30 pm

mattmurdog wrote:
Thu Apr 08, 2021 7:13 am
supreme-d wrote:
Wed Apr 07, 2021 6:58 pm
mattmurdog wrote:
Wed Apr 07, 2021 5:55 pm
As someone that doesn't sell, and sells to purge not "side hustle" this is a good thing, which I know is not a popular opinion. Hopefully it can drive down scalpers and resellers which has been so toxic to the collecting community. I wouldn't mind if resellers without a business license are taxed even more. If you want to be a service or business and profit, please go through the proper channels like everyone else.

Should I feel bad for all those opportunistic flippers who bought multiple Sentinels trying to profit and rip other collectors off? Naw...
I think you’re being very shortsighted. This isn’t just about the action figure collecting community. You created this straw man where everyone who makes over $599 over the course of a year selling things has a “side hustle” or is “opportunistic” (as if those are inherently negative qualities and not the underlying ethos of American capitalism), but that’s not the case for a large number people selling things on eBay. Even if it were true, why should the government get paid twice through taxation for the same item, having added no value to the product? It’s rent seeking behavior coming at the worst time for a lot of people.

Side note: Who gets a business license to sell the stuff in their attic? eBay is one of the “proper channels”, I don’t know why you’d suggest otherwise.

It is not in the interest of the average taxpayer to pay the IRS to keep track of informal market at such a low level. Your argument in support of this seems to be that you want to “own the scalpers”, not your own economic self-interest or even the interest of your fellow collectors.
None of what you've implied is accurate but I can understand how my previous comment makes you think otherwise. I view it as a blanket statement on all resellers who make this their "business" and not necessarily just toy scalpers. Yes, the govt is getting paid twice but that's because people have been abused and perverting the system.

Let's start by actually defining what's happening. Because there's a difference between selling something with depreciating value to get rid of (garage sale), verse buying at MSRP and then reselling it for profit and wanting to call it a business (ebay store). Someone selling junk isn't going to make 100k a year like resellers who flip PS5s or shoes. I have a coworker who flips shoes and makes 45-60k a year all tax free. Sorry but not sorry, it's time for these people to pay their dues. When I invest in stocks and sell for capital gains, I get taxed short and long. Why shouldn't these people?
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.

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