Tax Change affecting US collectors who sell online

[Ismene]

This isn't precisely Playmobil news, but it may affect US collectors who plan to sell off some of their collection on Ebay, with Paypal, etc.


There was a tax change for 2022. Now payment processors have to issue 1099-Ks for anyone reaching $600 of incoming funds in a calendar year.

https://www.taxjar.com/blog/2021-11-irs-brings-major-changes-to-1099-k-reporting-for-2022

If you think you could hit this limit, gather up any original receipts you may have for the items you are selling and for the shipping costs, so that you can use the amount you paid as a deduction.

[Rasputin]

We’ll I don’t sell but am a buyer. I now see that if EBay needs to send a lot of 1099’s that’s going to add up to a lot of work, even if automated. More work for EBay typically equates to more fees. More fees equates to higher ends prices.

Craigslist is charging for “Car & Truck for sale” ads , $5. I’m going to raise my used car prices $1000 to cover the increase 

[Ismene]

It's going to be a pain in the for people who use Paypal or Venmo to split dinner checks, and that sort of thing. Does the IRS really expect us to itemize "18.53 for a beef sandwich and soda because the waiter looked like he was going to cry when we asked if we could split the check 12 ways"?

If you resell a personal item (like a PM set) for less than you originally paid, then you don't owe income tax. If you sell it for more, you only owe tax on the "profit."

[Baron Marshall]

If you mark the payment as reimbursement it does not apply... so I will no longer be buying or selling anything... just reimbursing friends for picking stuff up for me. 

[Macruran]

I am genuinely curious about the administration's thinking behind this. In a period of financial turmoil and for many distress, after years of post-2008 "tax the rich" sentiment, they're going to...punish small time ebayers? Why? What do they hope to gain out of this besides fierce opposition? 

[Rasputin]

It’s easier to go after the “small guy” . They tend to not have a good way to retaliate. There are also a lot more of them to tax

The “big guy” is typically a political donor and it’s not wise to bite the hand that feeds you

Luckily times are changing. Yellow vests, truckers and farmers are showing the world the insignificant ones have a voice as well

[Ismene]

They say it's a response to the rise in freelancing, gigs, and online selling. It's been rising for awhile, but with the pandemic, many people have been turning to online freelancing to pay the bills. Mind you, freelancers already don't have benefits, and they pay extra taxes (since freelancers are "self-employed," they pay the portion that would normally be covered by the employer, once they reach a mere $400 a year).

This is not a change in the taxes due, but it does mean a lot of paperwork for people who may not actually owe taxes (because their expenses reduce that $600 to less than $400 profit). If you are selling used personal items, you may not have kept the original receipt.

[Macruran]

Do other countries make people do a big math problem every year?

[hauden_lukas]

It's going to be a pain in the for people who use Paypal or Venmo to split dinner checks, and that sort of thing. Does the IRS really expect us to itemize "18.53 for a beef sandwich and soda because the waiter looked like he was going to cry when we asked if we could split the check 12 ways"?

If you resell a personal item (like a PM set) for less than you originally paid, then you don't owe income tax. If you sell it for more, you only owe tax on the "profit."

I wonder how you can proof you didn’t make a profit.
If I pay $3-4 for a figure and sell the hat and accessories for $1 - I don’t consider this not making a profit. But since there’s no price tag on the items I sold - how should this be treated?

On another note: it’s almost impossible to link a receipt to certain figure or part. Unless you start considering fair market values and refer to DS online prices.

[Ismene]

I wonder how you can proof you didn’t make a profit.
If I pay $3-4 for a figure and sell the hat and accessories for $1 - I don’t consider this not making a profit. But since there’s no price tag on the items I sold - how should this be treated?

On another note: it’s almost impossible to link a receipt to certain figure or part. Unless you start considering fair market values and refer to DS online prices.

Then you keep your receipts on file and hope you aren't audited. In your example though, I think it would be fine to argue that the accessories represent $1 of the value of the figure. If you also sold the bare figure for $4, then you have a wee bit of profit.