Might be old news on 2022 tax law but just in case...

[PGinsandiego]

Getting a 1099-K doesn't mean that it's taxed, it means that the IRS is made aware that you have received some money from whoever sent you that 1099-K. The IRS website says, "reportable payment transactions," both taxable and non-taxable. Ex: a $1000 rebate sent to you by ebay/paypal/whoever is recorded, but not taxable.

The method of payment doesn't determine whether or not it's taxable.

BINGO! Additionally...

Disclaimer: NOT A TAX GUY!

Simple answer on the sale of Personal items: No profit, no taxes due

You cannot have a tax owed if you sold your personal items at a loss. Also You cannot deduct losses from the sale of personal items because you are not a business. Your Tax guy would probably just put in the line description, "Personal items sold at a loss." (Expenses equal to the reported 1099 income)

If you sold your personal items at a gain which is rare, and realized a profit after deducting initial purchase, shipping and tax, storage, and other related costs, then it must be reported as income subject to tax. (Hobby income)

 

[MartyMcFly]

BINGO! Additionally...

Disclaimer: NOT A TAX GUY!

Simple answer on the sale of Personal items: No profit, no taxes due

You cannot have a tax owed if you sold your personal items at a loss. Also You cannot deduct losses from the sale of personal items because you are not a business. Your Tax guy would probably just put in the line description, "Personal items sold at a loss." (Expenses equal to the reported 1099 income)

If you sold your personal items at a gain which is rare, and realized a profit after deducting initial purchase, shipping and tax, storage, and other related costs, then it must be reported as income subject to tax. (Hobby income)

This is the correct way of going about it. In fact for those using TurboTax they provide instructions on how to offset the 1099-K gains https://ttlc.intuit.com/community/taxes/discussion/1099-k-offsetting/00/1893547

All that said, elections have tax consequences and for anyone doing a lot trading this new 1099-K reporting is going to increase your chance of an audit so keep it in mind at the poles this mid-term.

-Marty

 

[Vhunter]

Not disputing the statement that income on items sold at a loss is not taxable. As Marty said, if you sell lots of items, you will need to have your all receipts to prove what you paid if you get audited. Being as this will be the first year for this tax law, I speculate the IRS will probably attempt to put the hammer down on people with lots of sales just to try and squeeze some revenue out of the John Does across the country.

 

[Nomadic Pirate 66]

How do you know that ?

 

[Vhunter]

This site gives brief tax explanations in Layman's terms. Again, just want to inform members doing higher dollar or volume sales in the classified so they don't get caught off guard when they get the forms.

Do You Have to Pay Taxes on Venmo Transactions?

People using third-party payment processing services should be aware of changes in 2022. Venmo and similar companies will have to report income over $600 to the IRS.

marketrealist.com

 

[BurntDog]

I think this topic may have been discussed before but in case everyone is not already aware. I wanted to inform members selling their used items or labor services, starting this year the Federal Govt. required companies like Ebay, Amazon, Paypal, Venmo, etc. to send 1099-K tax forms to anyone that receives more than $600 for the year. This amount used to be $20,000 mainly intended for smaller or side businesses but now the government has lumped in individual transactions.


Basically means that when selling your used airguns, accessories, or anything for that matter exceeding $600 for the year, you will be sent a 1099-K during tax time next year. A few instances you don't get a 1099-K is an in-person cash transaction, Paypal F&F, personal check or money order.


It's unfair that you are paying income tax on items you paid sales tax on when purchased new even if you are selling at a loss. There is supposedly an effort to have this legislation reversed back to the way it was before but for now unless you can prove that you paid more than you sold for, you will owe income tax on payments received for goods or services. If you have receipts for everything you sell, you can avoid having to pay the income tax. Unfortunately it's more time wasted doing tax paperwork.


Couple links below with more detailed info on the tax law.

1099-K and Tax Withholding FAQs | Seller Center

Starting on Jan 1, 2022, IRS regulations require all businesses that process payments, including online marketplaces like eBay, to issue a Form 1099-K for all sellers who receive $600 or more in sales

www.ebay.com

Will PayPal report my sales to the IRS? | PayPal US

IRS new reporting requirement for payments for goods and services lowers the threshold to $600 USD starting in 2024. PayPal will report these transactions.

www.paypal.com

If this happens smart people will leave these platforms and just start their own e-commerce website and use inventive legal ways to get traffic. Time to push back government is out of control America is falling fast.

 

[Smitty911]

It's unfair that you are paying income tax on items you paid sales tax on when purchased new even if you are selling at a loss. There is supposedly an effort to have this legislation reversed back to the way it was before but for now unless you can prove that you paid more than you sold for, you will owe income tax on payments received for goods or services. If you have receipts for everything you sell, you can avoid having to pay the income tax. Unfortunately it's more time wasted doing tax paperwork.

HAHAHAHHAAHA you said Unfair and Tax in the same sentance. HHHAAHAAH

Smitty