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1099 Form from Paypal...interesting

Thumper580

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Minuteman
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Oct 20, 2013
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Mechanicsville, VA
This is a new one... Just got a notice from Paypal that my 1099 tax form is ready for me... Either it's new this year or I've missed it previously...
Selling stuff in 2020, received about $2000.00. Now have to include it in my taxable income... :mad:
 
This is a new one... Just got a notice from Paypal that my 1099 tax form is ready for me... Either it's new this year or I've missed it previously...
Selling stuff in 2020, received about $2000.00. Now have to include it in my taxable income... :mad:
I got one of those as well, havent opened it yet. I believe it would go as capital gains rather than earned income so at least you dont have to pay 14% Social Security. And you should be able to deduct what ever you paid for the item.
 
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Yea anything over $600 received as goods and service through just about any e-payment app will get you a 1099 now (I believe it started Jan 1, 2022). Supposedly you can try and go through with your accountant and explain it as online garage-selling, but regardless of whether they end up taxing you or not it's a pain. That's why I've abandoned all e-payment except for minor things like paying friends back for gas or food.

Also too many people who send as G&S and put blatantly obvious statements about gun parts. Nope, no bueno.
 
So now anything you sell using PayPal goods and services, you need to have the funds sent in increments of $599 or less.
That's illegal. Technically, when used for evading detection.

As long as you can reasonably show the original cost, you deduct that. I think it's all line a hobby business now and tax forms have a section for it.
 
That's illegal. Technically, when used for evading detection.

As long as you can reasonably show the original cost, you deduct that. I think it's all line a hobby business now and tax forms have a section for it.
Well then wouldn’t intentionally using friends and family be considered evasion too then? Or no, because they never said they’d tax friends and family? Meh, weird line.

Also does anyone know if it’s $600 per occurrence or anything cumulatively over $600?
 
Well then wouldn’t intentionally using friends and family be considered evasion too then? Or no, because they never said they’d tax friends and family? Meh, weird line.

Also does anyone know if it’s $600 per occurrence or anything cumulatively over $600?
Pretty sure it's a total of 600.00 in transactions for the year.
 
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Yeah, you can thank POS Biden and the Dems for that. They want to squeeze every penny they can out of working Americans so they can give it to their welfare cases and illegals crossing the border.

Sucks for everyone, but I see a lot of people requiring payment via cash, check or MO once they start receiving a 1099 for sales they forgot about. I know I won't be accepting PayPal or any other e-payment for anything.
 
My read on this (and eBay is doing it, too) is that you only need to pay tax if you sold the item for MORE than you paid for it. Not sure if the tax is capital gain or income. PayPal has no idea what you paid for it so they send the 1099. What the Biden administration done has made taxes more confusing which will result in some people paying more taxes than they should, assuming that this 1099 is actual income.

Already my tax obligation this year is shaping up to be $4,000 more owed than last year without an income change. Frankly... I'm going to have to use most of my bonus at work just to pay my taxes as I did not see this coming and I didn't know how to anticipate it. Hopefully I figure it out.
 
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What upsets me, is that I apparently could have avoided paying taxes on all my payments received through paypal or venmo through the years, because they weren't reported, and thus, didn't really happen, and yet I reported the income, and paid taxes on them anyway. Damnit!

Branden
 
American Rescue Plan Act of 2021 changes what was $20k & 200 in transactions to simply $600 cumulative starting in 2022.

Problem I'd have is most of the stuff I'd want to sell I don't have the foggiest idea what I paid for it, much less have a receipt. Don't see this as being enforceable at the lower dollar end. More of a as a hook if you get the 1099 and don't address it on your return.
 
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New to me last year. Think it's BS! I buy a riding lawn mower for $2000.00, three years later I sell it for $1000.00 on Ebay and I made a $1000.00 profit???? I don't think so...... Makes selling on eBay much less appealing.
 
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Believe me, the IRS is going to consider every penny on that 1099 as taxable income. In fact most 1099s are independent contractor income, so social security, medicare etc needs to be paid on that income - if you don't have receipts and expense everything. Major clusterfuck for people selling used stuff.
 
SmartSelect_20220130-160536_Gmail.jpg


Nice try IRS
 
Here's some reading on the subject: https://www.forbes.com/advisor/taxes/cash-apps-to-report-payments-of-600-or-more/

Selling shit at a loss is not taxable (or even better if under your business/LLC is deductible), but you better have records/evidence of both purchase and selling prices in the rare event you get audited, especially if you are in the five plus figure range of transfers. That's who these new rules are really going to be targeting.

Buy and sell local, face to face, in cash.
 
New to me last year. Think it's BS! I buy a riding lawn mower for $2000.00, three years later I sell it for $1000.00 on Ebay and I made a $1000.00 profit???? I don't think so...... Makes selling on eBay much less appealing.
No, you'd have a $1000 loss, not profit. Wonder if IRS will let you deduct that loss? Probably not but if they intend to tax any profit as income, the flip side would be you get to deduct any loss from your gross income.

This is the brainchild of some idiot Dems. I'd bet by the time this makes it to your 1040 there will an exemption for de minimis personal sales. Or it will apply only to business income, or at least what folks should be reporting as business income but haven't been.
 
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Don't do business with PayPal.....repeat until nauseous. Sold knives and cutlery for a few years and would *never* do business with PayPal no matter how many clients wanted me to take PayPal so they'd be "protected" in a transaction. Look, PayPal wants me to pay them a pretty good percentage of the transaction and they "forbid" me to pass the cost of this transaction to the client requesting the use of PayPal. It's a no brainer and it just runs up the cost of doing business with a middle man who is contributing *nothing* to the conversation/transaction but getting paid just to get between me and my client. For the illusion that there is some protection for the buyer.

Don't trust me and won't send a USPS Money Order? I'm not offended...there's a dozen clients who want what I have produced and will work with me without involving Pay*fucking*Pal. Sorry. Good luck I am selling the piece to a guy who is sending me a USPS MO. In the future, if you see something on the site that makes yer dick hard, send me a USPS MO and fuck PayPal.

I never needed them between me and clients and never will. Unnecessary intervention in a transaction between me and a client.

VooDoo
 
I may be wrong or things have changed.
When I was day trading, I was 1099'd (or similar) on the stocks I sold. Nothing from the broker or IRS on what I bought. Proof of buying was on my part for the returns. Accountant figured out the P+L
 
We can’t let them move to a cashless society in total. Sadly they already are but I’m already squeezed as much as I can be. This shit is getting ridiculous.
Different forms of currency have been around for 5,000 years. Doubtful, in our lifetime, currency will cease to exist....
But then there is that issue of "The Mark of the Beast"...
Best gather up some junk silver coins for bartering..
 
We can’t let them move to a cashless society in total. Sadly they already are but I’m already squeezed as much as I can be. This shit is getting ridiculous.
What terrifies me of the cashless society is that think of how easy it would be for the powers that be to just digitally remove access to your funds. Make a post on social media they don't like? Sorry, there's a technical difficulty, and you're unable to buy food, pay your mortgage, car payment, ect. We can't seem to resolve it, sorry. As your house, or car is taken from you, and you or your children are starving because they didn't like your opinion on something.

Sure, it's a pretty wild statement that requires the wearing of a tinfoil hat to read, but if you think about it, do you really think they would think twice about doing it down the road? They being government officials that are in charge of creating and controlling the narrative. Look at how willing democrats are to letting you die if you don't have the vaccine, and are in need of a life saving transplant, or if you aren't vaccinated and are admitted to the hospital with covid and democrats believe that you should be denied care.

The .gov needs more income because they're spending on daddy's credit card, and the inflation bill is coming in. They need revenue to use to kick the can down the road. They are going to squeeze it out of every source they can. Let's just hope and pray that one of the 2 legislative houses switches hard to the opposition of the other later this year, that way party pet projects won't pass one, or the other. They'll be forced to work together on bills that are in the true benefit of the country (fantasy thinking though).

7 fucking percent inflation though, could be worse, may end up worse. I don't have a crystal ball, and Miss Cleo is dead.

Branden
 
What terrifies me of the cashless society is that think of how easy it would be for the powers that be to just digitally remove access to your funds. Make a post on social media they don't like? Sorry, there's a technical difficulty, and you're unable to buy food, pay your mortgage, car payment, ect. We can't seem to resolve it, sorry. As your house, or car is taken from you, and you or your children are starving because they didn't like your opinion on something.

Sure, it's a pretty wild statement that requires the wearing of a tinfoil hat to read, but if you think about it, do you really think they would think twice about doing it down the road? They being government officials that are in charge of creating and controlling the narrative. Look at how willing democrats are to letting you die if you don't have the vaccine, and are in need of a life saving transplant, or if you aren't vaccinated and are admitted to the hospital with covid and democrats believe that you should be denied care.

The .gov needs more income because they're spending on daddy's credit card, and the inflation bill is coming in. They need revenue to use to kick the can down the road. They are going to squeeze it out of every source they can. Let's just hope and pray that one of the 2 legislative houses switches hard to the opposition of the other later this year, that way party pet projects won't pass one, or the other. They'll be forced to work together on bills that are in the true benefit of the country (fantasy thinking though).

7 fucking percent inflation though, could be worse, may end up worse. I don't have a crystal ball, and Miss Cleo is dead.

Branden
You make valid points... Those wearing the tin foil hats 60 years ago are smirking at the conditions today....
 
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I got 1099'd in 2020 when I was running a match series and using PP for match fees. IIRC we had $9-10k ish come and go that year. The match had it's own debit card and checkbook for buying supplies and paying staff, so luckily I had records of almost all transactions to prove I took a loss on the whole thing. The guys that ran it before me did the same thing and never got a 1099. Knowing what I know now I would've gone cash only in the future.
 
What terrifies me of the cashless society is that think of how easy it would be for the powers that be to just digitally remove access to your funds. Make a post on social media they don't like? Sorry, there's a technical difficulty, and you're unable to buy food, pay your mortgage, car payment, ect. We can't seem to resolve it, sorry. As your house, or car is taken from you, and you or your children are starving because they didn't like your opinion on something.

Sure, it's a pretty wild statement that requires the wearing of a tinfoil hat to read, but if you think about it, do you really think they would think twice about doing it down the road? They being government officials that are in charge of creating and controlling the narrative. Look at how willing democrats are to letting you die if you don't have the vaccine, and are in need of a life saving transplant, or if you aren't vaccinated and are admitted to the hospital with covid and democrats believe that you should be denied care.

The .gov needs more income because they're spending on daddy's credit card, and the inflation bill is coming in. They need revenue to use to kick the can down the road. They are going to squeeze it out of every source they can. Let's just hope and pray that one of the 2 legislative houses switches hard to the opposition of the other later this year, that way party pet projects won't pass one, or the other. They'll be forced to work together on bills that are in the true benefit of the country (fantasy thinking though).

7 fucking percent inflation though, could be worse, may end up worse. I don't have a crystal ball, and Miss Cleo is dead.

Branden
This. Precisely this!
 
Yea anything over $600 received as goods and service through just about any e-payment app will get you a 1099 now (I believe it started Jan 1, 2022). Supposedly you can try and go through with your accountant and explain it as online garage-selling, but regardless of whether they end up taxing you or not it's a pain. That's why I've abandoned all e-payment except for minor things like paying friends back for gas or food.

Also too many people who send as G&S and put blatantly obvious statements about gun parts. Nope, no bueno.

Does it apply "retroactively" to 2021 payments?

Yeah, I'm done with Paypal.
 
Supposedly not. It is "supposed" to start Jan 1, 2022 and going forward. Most news articles I've read coincide with this.