Selling over $600 requires you to pay taxes on it (Not spam I swear)

[SwedishHeat]

Came across an interesting bit of news today

https://www.ecommercebytes.com/C/abblog/blog.pl?/comments/2021/3/1615153514.html

It used to be that if you made over $20,000 in online sales, you'd have to report taxes. Now, the recently passed stimulus bill includes language that lowers that threshold to $600.

That $140 SSC Gamorrean Guard you bought, that you can now sell for $400. PayPal will report $400 in profit for you, you sell a few more ... unless you have receipts, you're going to have to pay taxes on all that income. Even if you have receipts, you're going to be taxed on a $260 profit.

This didn't used to be a concern because very few of us collectors made over $20k in profit, so nothing was ever reported. But with this new provision, it WILL be reported to the IRS, so there's a possibility that you're going to have to start paying tax on any profits you make selling online.

 

[Rotfish]

Came across an interesting bit of news today

https://www.ecommercebytes.com/C/abblog/blog.pl?/comments/2021/3/1615153514.html

It used to be that if you made over $20,000 in online sales, you'd have to report taxes. Now, the recently passed stimulus bill includes language that lowers that threshold to $600.

That $140 SSC Gamorrean Guard you bought, that you can now sell for $400. PayPal will report $400 in profit for you, you sell a few more ... unless you have receipts, you're going to have to pay taxes on all that income. Even if you have receipts, you're going to be taxed on a $260 profit.

This didn't used to be a concern because very few of us collectors made over $20k in profit, so nothing was ever reported. But with this new provision, it WILL be reported to the IRS, so there's a possibility that you're going to have to start paying tax on any profits you make selling online.

Why would this apply to a $400 sale? It sounds like this will only be an issue if a single item exceeds $600 (which is still a problem if you're into statues and such).

 

[SwedishHeat]

Why would this apply to a $400 sale? It sounds like this will only be an issue if a single item exceeds $600 (which is still a problem if you're into statues and such).

That was just an example transaction.

It's not in a single sale, it's $600 over any number of transactions. So if you make 10 sales in a year, at $65 each, that counts as $650. That's reported. You'll have to show that you paid $50 for each item, then have to pay tax on $150.

 

[azurepred]

This stupidity of a bill leaves me with more questions than answers. I pay a lot of bills with paypal F&F, so does that mean those people are all of a sudden gonna get taxed for non good transactions or is it solely only payments for G&S?

If you are going to tax people again for selling items they already paid taxes on, what about if that item was sold at a loss? Do I get to now claim that?

A stupid bill like this seems very likely to kill something like ebay or etsy. I don't understand how something like this ends up in a freaking "rescue" bill that hurts mostly non rich people.

 

[Gipetto0812]

wow! That really sucks to hear. Guess I'm going to have to really think twice next time I go through an "I'm selling my whole collection" phase. Or sell things very slowly over years at a time

 

[youbastards]

It reads like this kicks in Dec 31, 2021, meaning the taxes filed in 2023 for 2022 will be affected. I wouldn't be surprised if eBay, PayPal, and Etsy's lawyers get involved and fight this, it will kill a large segment of these businesses.

 

[dragonsleeper]

at least Trump is not President, right

 

[youbastards]

at least Trump is not President, right

Yes, 100%.

 

[Rotfish]

I don't understand how something like this ends up in a freaking "rescue" bill that hurts mostly non rich people.

That's the only way they can get nonsense like this passed. Unpopular stuff gets lumped into a larger, more necessary bill all the time.




Found another article on this:

https://www.cnbc.com/2021/03/26/its...g-the-irs-about-income-from-online-sales.html

According to CNBC, the bill lowers the minimum for reporting your earnings, but you may not necessarily get taxed. Would be nice to know what the rates are and at when they kick in. Getting taxed on the equivalent of a glorified yard sale is just bogus, so I'd hope the threshold for actual taxation is higher.

 

[Unclechopchop]

They?re trying to squeeze everybody dry, so the banks can own everything and you end up in the streets. Been seeing, and saying this for years....
In the meantime, New Zealand just raised their minimum wage , increased their healthcare, and started taxing the rich even more.

 

[Chakor]

They?re trying to squeeze everybody dry, so the banks can own everything and you end up in the streets.

 

[SwedishHeat]

If you are going to tax people again for selling items they already paid taxes on, what about if that item was sold at a loss? Do I get to now claim that?

Yes, that hasn't changed.

If you collect figures as a hobby, if you sell at a profit, you pay tax on that, if you sell at a loss, that reduces your tax burden on your profits.

 

[nexus]

Well that sucks. Fortunately, it doesn't kick in until next year.

While this definitely sounds like boneheaded legislation that doesn't take into account an array of factors, going after online transactions was simply a matter of time. Reducing the corporate tax rate created a huge revenue shortfall and didn't come close to creating the number of promised jobs. So hundreds of billions in untaxed dollars in online transactions sticks up like a juicy source of revenue. The reality is, online sellers don't have powerful lobbies fighting on their behalf (who knows if eBay's lawyers even got involved). At the very least someone could have argued to reduce the threshold from $20K to $15K or even $10K, or have it roll out over 5 years so that people who rely on that income have an opportunity to adjust. eBay and Etsy sellers are probably going to suffer quite a bit, which is a real shame, but in the long run there will be few alternatives. As it is, eBay just changed its rate structure to in order to take a bigger chunk. I don't know much about Etsy, but no doubt the "little guy" is going to end up bearing the brunt. Most of those sellers will probably need to raise prices or work even harder just to make the same money.

I think the casual seller is just going to become more savvy. If you're looking at a scenario where you're selling a collectible for $100 > eBay takes roughly $12 > if you accept Paypal that's another $3-$5 > and then you pay another $30 or so in income tax, there's not much incentive to sell if your net is $55 (especially if you're already selling at a loss. Not to mention the paperwork. For casual sellers, it's likely going to mean finding alternative "flea market" type opportunities off the grid or conducting person-to-person transactions through social media groups and forums, as well as taking other forms of payment such as cash, money orders, checks, Venmo or CashApp. (I don't know if Paypal F&F will qualify under the same revenue umbrella as PayPal sales). If there's a major impact or a very public outcry in 2022 maybe the rules will be rolled back or revised. I guess we'll have to see how the market reacts.

Yes, that hasn't changed.

If you collect figures as a hobby, if you sell at a profit, you pay tax on that, if you sell at a loss, that reduces your tax burden on your profits.

You also have to produce the receipts. So, assuming you have those, now you have to complete extra paperwork to account for that $1,200 you made selling a couple of statues on eBay.

 

[SwedishHeat]

For casual sellers, it's likely going to mean finding alternative "flea market" type opportunities off the grid or conducting person-to-person transactions through social media groups and forums, as well as taking other forms of payment such as cash, money orders, checks, Venmo or CashApp. (I don't know if Paypal F&F will qualify under the same revenue umbrella as PayPal sales). If there's a major impact or a very public outcry in 2022 maybe the rules will be rolled back or revised. I guess we'll have to see how the market reacts.

You also have to produce the receipts. So, assuming you have those, now you have to complete extra paperwork to account for that $1,200 you made selling a couple of statues on eBay.

It's my understanding that all the online payment processing apps will be producing records, not just PayPal. So you aren't safe if you choose to use Venmo.

As far as receipts go, it's also my understanding that you can provide a reasonable cost, if you don't have the receipt. So, if you're forced to show records for your sales. You can just write down that you paid $200 for that Hot Toys figure plus another $30 in taxes and shipping.

Naturally, lying on those forms will get you in bigger trouble, but you don't NEED to produce receipts

 

[Budo17]

I live in Massachusetts, and had to submit the 1099 form. It doesn’t take much to sell over 600 if you want to move a few figures I thought it was only for specific states- ah well

 

[Unclechopchop]

I live in Massachusetts, and had to submit the 1099 form. It doesn’t take much to sell over 600 if you want to move a few figures I thought it was only for specific states- ah well

This is not acceptable. All these corporations raking in the dough and not paying a dime in taxes and then they bleed us dry. Makes sense.......

 

[Sweet Rabbit]

But no mean tweets amirite?

 

[Unclechopchop]

Nah, health care, a decent pay, or a decent future aren’t important! Its those mean tweets. Priorities people!

 

[azurepred]

Yes, that hasn't changed.

If you collect figures as a hobby, if you sell at a profit, you pay tax on that, if you sell at a loss, that reduces your tax burden on your profits.

I actually had no idea you could claim losses of collectible sales on your taxes. I will probably be selling a few Guyver statues at a big loss this year

It's my understanding that all the online payment processing apps will be producing records, not just PayPal. So you aren't safe if you choose to use Venmo.

As far as receipts go, it's also my understanding that you can provide a reasonable cost, if you don't have the receipt. So, if you're forced to show records for your sales. You can just write down that you paid $200 for that Hot Toys figure plus another $30 in taxes and shipping.

Naturally, lying on those forms will get you in bigger trouble, but you don't NEED to produce receipts

If the govt thinks they can just start taxing every single electronic transaction, **** is gonna hit the fan in this country. I don't think there is any way they would know a Venmo payment was either for a take out dinner or selling a statue.

 

[azurepred]

Nah, health care, a decent pay, or a decent future aren’t important! Its those mean tweets. Priorities people!

when was the last time the middle class had good health care or wages?