[Letitroll98]

I've been buying and selling on Facebook marketplace.  Meet up and cash for everything.  Sells as fast as eBay and I shipped a jersey once, everything else cash, no commissions, no shipping fees.

[Phil A]

State sales tax was mentioned a couple of posts back.  In addition to sales tax, states have 1099 requirements - https://www.efile4biz.com/resource-center/combined-federal-state-filing-program/   The 1099 requirements for states are not necessarily the same as Federal.  Also, PayPal has offices in a half dozen states or so.  They may not even realize their state requirements (I did state and local taxes for many years).  It's a whole Pandora's Box to open what states may require.  Some may have requirements for what has been deemed an occasional or casual sale.  So it could lead to more than just a 1099 issue for someone.  I certainly don't want to end up needing to document the very few things I sell (and basically all the sales are for less than I paid for the item) for a Federal return and then have to end up filing state returns (whether that is for income due to a 1099 or sales tax returns). 

An example would be Audiogon.  They have an office in SC.  If one ends up selling things and they are deemed to be a sales agent (which they really are as they take a commission), there could be circumstances where enough sales are made to people in SC and one is required to collect the sales tax.  All one needs to do is get on their radar once.  Since we are individuals and don't keep records the way a business entity would, a state may have a particular policy to assess taxes for a specific period of time (e.g. 8 years).  So if someone was deemed selling enough items in a particular jurisdiction to be deemed a seller and they sold $10,000 worth of items in a given year, even if that was things they paid $25,000 for, they can be assessed the sales tax rate on the $10,000 and good luck being able to recover it from the individuals you sold things to.  So if the sales tax rate is 6 percent, that's $600, without any interest or penalty.  If that state has a policy of going back 8 years for failing to file a return and you have no records one could end up paying $6,000 or more in sales taxes, depending on how hardball they wanted to be and how short their budget is.

So to me the 1099 issue started in this thread is just the tip of the iceberg.  There is nothing I wish to do (for the very few things I sell for less than I paid for them) to end up on a taxing jurisdictions radar.  We're in times where there may be states with budget deficits.  Raising taxes on residents is always unpopular.  Getting additional funds to close that deficit often leads to state or local taxing jurisdictions to take more aggressive approaches.  It is just reality.

[FullRangeMan]

Incredible.

[viggen]

.

[Jazzman53]

Not to mention; our wonderful congress just approved hiring 87,000 more IRS agents to enforce it 

[adminRH]

Not to mention; our wonderful congress just approved hiring 87,000 more IRS agents to enforce it 

No politics!

From AC Posting guidelines:
"Politics, public policy and religion
    We've tried it, it doesn't work. Please go somewhere else to talk about these topics."

[genjamon]

We shall see whether any changes to the $600 threshold were included in the omnibus budget bill that was just passed today; as discussed in the video, there were different efforts underway to make changes.

[Don_S]

Delayed for 2022. The future of the tax is yet to be determined.

https://www.wsj.com/articles/irs-delays-gig-tax-filing-rule-for-side-hustles-of-more-than-600-11671815725

"The Internal Revenue Service on Friday gave millions of Americans a one-year reprieve on new tax-reporting requirements, delaying implementation of a law that requires e-commerce platforms such as eBay, Etsy an"

Sorry, this is a WSJ article and I am not a subscriber so the information here is not complete. Hopefully someone will find a link to more complete information.

[genjamon]

Aaaaaand, over the next 24 hours listings on eBay, Audiogon, USAM, Audiocircle, etc. explode by 10x...

[Don_S]

dark humor.  things in your life you have no control over... laugh about it... better for your health.

Not even close to any kind of humor. I have not read one thing on this thread that made me smile except for my post on delaying the rule.

[rodge827]

The delay is good news! Maybe it can be changed for the better? 222-213

[Don_S]

The delay is good news! Maybe it can be changed for the better? 222-213

I think the fact that the tax is being reconsidered is a good sign. I think (just my opinion) we will see a change in the reporting threshold. There was already a higher reporting threshold in previous years so the tax will not go away completely.

[DaveC113]

People are overreacting to this. It's a PITA but you don't have to find receipts for your 20 yr old tube amp you just sold, just look up the msrp, it's a strong enough basis for worth.

Most online selling markets will be sending the IRS this form, so getting cash isn't going to help and if you try to hide it it's just going to be more likely you'll get audited.

This is mostly to prevent ebay sellers from avoiding taxes.

There is an attachment to the latest spending bill that raises it up to $10k afaik, but probably for '24.

The rumor IRS hired 87k to go after you for your speaker sale is not true. Here's some info from someone who isn;t just regurgitating rumors:

The number comes from a Department of Treasury report issued in May of 2021. Page 16 of the report lists the potential number of new full-time IRS employees (FTE) hired through fiscal year 2031 as 86,852.

Source: https://home.treasury.gov/system/files/136/The-American-Families-Plan-Tax-Compliance-Agenda.pdf

This number is inclusive of all IRS personnel (administrative assistants, custodians, programmers etc.) as well as agents. It's forecast to fill roles left by an aging workforce. (52,000 of the 83,000 IRS employees are eligible for retirement or expected to resign within the next five years.)

Source: People | Internal Revenue Service.

If the IRS followed through with the total number of hires, there would be a net gain in personnel across all departments. There wouldn't be an increase in actual IRS agents of more than several thousand.

Note that this also runs counter to a claim made by several Democratic lawmakers that there will be no new IRS agents and the IRS is just backfilling positions.

Enforcement may increase, but the claim of 87,000 agents is entirely without merit.


Source for the increase to $10k:

https://www.cnbc.com/2022/12/20/hagerty-manchin-propose-10000-threshold-for-venmo-paypal-tax-reporting-change-up-from-600.html

[DaveC113]

And now, a 1-year reprieve:

https://www.forbes.com/sites/robertwood/2022/12/23/irs-delays-until-2023-onerous-600-form-1099-k-reporting-threshold/?sh=6f7256cd54fe

Hopefully by that time it'll be back up to $10k.

[Don_S]

DaveC113

Thank you for posting factual information.  I am extremely tired of a society that runs on sensationalized half-truths and outright lies. It seems like so many people are looking for an excuse to be angry. 

[ServerAdmin]

This thread has served its purpose, I will lock it now and leave it here for reference as there was some useful information posted.

Please do not start a new thread on the same topic.