Paypal 600 Bucks 1099

[salty_monk]

I don't know if anyone else has heard of this but new for this year if you go over a $600 for "Goods and services" on Paypal, Venmo etc then you will get a 1099 and be taxed at your normal rate in the US.

Whilst I don't object to paying taxes (apart from sales tax on 2nd hand vehicles here in the US that really gets my goat as the tax was already paid when it was new) it seems silly that people like us (i.e. non commercial) will now be taxed on the sale of a few old motorcycle parts....

"Friends and family" type payments do not qualify towards the 600 but you have to make sure your friends categorize it correctly (for example they can't "pay you back" with a credit card as it can't be used on that category).

Apparently this is also going to totally screw the IRS with additional worthless paperwork rather than letting them do real work too...

[Nessism]

This change really *@%^$*@%^$*@%^$*@%^$es me off.

There seems to be a "garage sale" out, for guys that don't do a lot of transactions. I'm thinking that's the loophole to shoot. There is also something related to the sale being "profit", so if you bought the item for more than you sold it for, that takes any money received off the table. I need to research this topic more, but at this point I'm leaning heavily towards not disclosing any profit for the small number of ebay/paypal sales I've got going.

[rphillips]

Not the same but kind'f related. Ebay now charges sales tax on every item sold. From what I've tried to find, anyone or any Co. that does less than $5K business in my state, isn't required to collect or disperse tax to my state. I don't know how Ebay disperses all this money. No doubt before Ebay started collecting tax the states were losing a lot of revenue but it seems now they are collecting waaay more than they are entitled to. There's no way my state (TN) is entitled to sales tax from me buying a used pair of shoes or a 1/2 worn out motorcycle tire from someone in N. Mexico. Just don't seem right.

[Cipher]

You EBay millionaires have had it too easy for too long. Aircraft Carriers and hammers are expensive ya know.

rphillips I cannot imagine Ebay risking the repercussions of falsely collecting tax. I also can't believe Tennessee taxes used items. That's just plain nasty. Is this a sales tax or is it a services tax? Like the VAT in UK or GST in Canada?

I also cant imagine EBay wants to do something to make all its sellers and buyers angry.

[rphillips]

I may have mis-spoke. When I said Ebay is doing it. When I buy something, anything & everything, on Ebay, I check out with Paypal. When the receipt is put up there, it has item $.$$, then S/H $.$$, then under that Tax $.$$, then total $.$$ at the bottom. I'm not sure if it's Ebay or Paypal, but the tax is added on there from someone. Been doing it for a couple of yrs. now. I'm not complaining (Too Much) about the tax on new stuff, but tax on used fishing lures or second hand clothes just ain't right, no matter who is charging it....

[salty_monk]

It's Ebay... I think they have to charge sales tax in every state now & I think it was a new law covering online companies that did it. I think they class Ebay as making the actual sale now rather than just being a middle man. Of course I could be wrong.

Ness -

I imagine like anything you could deduct costs from the proceeds (like booking a stock loss against the Dividend gain) but that is a different level of book keeping and complication and I imagine at tax time it's a lot of additional paperwork. You then might have to file schedule C and be self employed.

Apparently this figure used to be +$20k from what I read. There is some push to raise it again. I would think $5,000 is a much more reasonable limit, even $2500 would take out most everybody and save wasting a lot of time!
I guess for some people that already have some kind of sole proprietor or LLC thing going they could simple move to buy & sell it through that. That may be what I end up doing. It just seems ridiculous to me that second hand goods whether it is a Vehicle or a used coffee mug are taxed in the first place as taxes have all been paid when it was new. For some items the sales tax revenue over its life may well end up being a good percentage of the total cost...

[argonsagas]

You EBay millionaires have had it too easy for too long. Aircraft Carriers and hammers are expensive ya know.

rphillips I cannot imagine Ebay risking the repercussions of falsely collecting tax. I also can't believe Tennessee taxes used items. That's just plain nasty. Is this a sales tax or is it a services tax? Like the VAT in UK or GST in Canada?

I also cant imagine EBay wants to do something to make all its sellers and buyers angry.

I know nothing about the taxes, but I can certainly say that big companies have no compunction at all about adding fees of all sorts,

UPS, for many years, screwed Canadians on things that came from USA,
the shipping charges were paid by shipper/sender but UPS thought up ways to create fees to be collected by purchaser/consignee, and claim some of them were taxes..

FIVE....additional fees could be added, regardless of the value of merchandise involved, and the fees were charged even when the purchase was exempt from all duty/tax..
UPS would make it look good and say they paid taxes to Revenue Canada, even when the total tax assessment would have been zero.
I actually got stuck with that fake claim by UPS when they refused to deliver a small parcel of urgently needed motorcycle parts a few years ago until I paid them $35. in fees and fake taxes for TEN DOLLARS worth of used motorcycle parts.


If buying from USA now and seller says will ship by UPS....I do not are if it is a full retail sale with a store or e-bay).....I refuse to buy if the seller insists on UPS .

[GS1100GK]

So giving Ebay your SSN is no concern to anyone? It's required for 1099

[Nessism]

So giving Ebay your SSN is no concern to anyone? It's required for 1099

Don't they have it already?

[GS1100GK]

They don't have mine. But I haven't sold anything on there for a while. Buy a lot, though

[argonsagas]

So giving Ebay your SSN is no concern to anyone? It's required for 1099

That is an interesting question.

I m in Canada so 1099 is not applicable but here we have limitations on who can legitimately ask for your SSN/SIN and e-bay would not be one of them.

The general rule is that you can demand to know why a company wants your SIN/SSN and you can refuse to give it to anyone

[Nessism]

Good news: the IRS has delayed implementation of this new tax yet again, and for 2024, the limit has been lifted from $600 to $5000. Thank goodness!

[salty_monk]

That's good news. Thanks for the update Ed. I hadn't seen that.

[Vmass]

I imagine that the 20k limit emerged as a problem for the IRS in finding the " side gig " guys who live without paying taxes. If these side giggers use, let's say five payment services, they can bring in 100k tax free.

So, while you pay all your taxes, many don't. The IRS really isn't interested in grabbing the little motorcycle part guy, but they needed to get the number low enough to flush out the crooks.