new IRS $600 threshold for selling goods for transactions such as Venmo or PayPal

buggz

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  • The IRS on Tuesday warned taxpayers about the new $600 threshold for receiving Form 1099-K for third-party payments.
  • The change applies to payments from third-party networks, such as Venmo or PayPal, for transactions such as part-time work, side jobs or selling goods.
 
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nn8734

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  • Feb 26, 2013
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    Not a huge problem…if you receive a 1099k for sale of personal property that means the government is treating you like a business.

    So file taxes like a business, get a TIN, file a Schedule C and write off the cost of goods sold, selling, administration and indirect overhead costs.

    In the end you will likely end up reducing your tax basis, increasing your refund as opposed to decreasing it.

    Make sure you keep records/receipts of the things you bought…

    Disclaimer: im not your tax preparer; run this by your CPA.
     

    jrhtx

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    Not a tax person but the early information was if it was like PayPal Friends/Family it was not included as a 1099. This is from the article.

    "A frequently asked questions page from the IRS says you shouldn’t receive Form 1099-K for personal transfers, such as reimbursements for splitting meals, gifts or allowances."

    Sounds like it is still exempt. Don't do much Venmo so not sure how that works.
     
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    nn8734

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    Not a tax person but the early information was if it was like PayPal Friends/Family it was not included as a 1099. This is from the article.

    "A frequently asked questions page from the IRS says you shouldn’t receive Form 1099-K for personal transfers, such as reimbursements for splitting meals, gifts or allowances."

    Sounds like it is still exempt. Don't do much Venmo so not sure how that works.
    Correct, only applies to payments received via Goods and Services or sales made on transaction facilicator platforms like ebay and Gunbroker.
     

    TheOE800

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    Correct, only applies to payments received via Goods and Services or sales made on transaction facilicator platforms like ebay and Gunbroker.
    Do you use ActiveJunky or any other sites that pay you out via PayPal? Those are included in the 1099K, too. 🤑
     

    nn8734

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    Do you use ActiveJunky or any other sites that pay you out via PayPal? Those are included in the 1099K, too. 🤑
    I personally don’t but if you or any one else does and you get a 1099 for sales, throw them into your Schedule C a deduct your expenses accordingly.

    I think the IRS is potentially opening up Pandora’s box with this stupid shit as everyone is going to start writing shit off and “losses will become gains for taxpayers while gains the IRS thinks it will see will become losses.
     
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    TheOE800

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    I personally dont but but if you or any one else does and you get a 1099 for sales, throw them into your Schedule C a deduct your expenses accordingly.

    I think the IRS is potentially opening up Pandora’s box with this stupid shit as everyone is going to start writing shit off and “losses will become gains for taxpayers while gains the IRS thinks it will see will become losses.
    Not everyone wants to file taxes as a business. I think that opens up the average taxpayer to more scrutiny, they didn’t budget to hire 89,000 for no reason.
     

    acudaowner

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    wonder how well they will track it if you break up your payment into 26 300 dollar payments maybe a few less or more
     

    nn8734

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    Not everyone wants to file taxes as a business. I think that opens up the average taxpayer to more scrutiny, they didn’t budget to hire 89,000 for no reason.
    Yea if you’re one of those people who don’t then don’t file any schedule C; just file your regular 1040 with all your income sources (including any 1099s) included in your top line…and pay more in income taxes than you have to.

    Or dont sell anything at all on places like eBay (ive long since stopped selling shit on there and GB)

    If you do file a C, just keep your documentation straight and make sure you can back up whatever you’re claiming as expenses. Again, no big deal…