Wacky Packages Forum
Wacky Packages Discussion => General Wacky Packages Discussion => Topic started by: moron_chicken on January 02, 2022, 08:16:35 PM
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Starting on Jan 1, 2022, eBay and other marketplaces are required by the IRS to issue a Form 1099-K for all sellers who receive $600 or more in sales. The new tax reporting requirement will impact your 2022 sales and taxes that you file in 2023—it will not apply to your 2021 sales and taxes that you file in 2022.
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I hate e-bay….and government taxes……
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some states already are in effect. Illinois for one is. If you are a casual seller of you collection, there are plenty of ways to get the tax to zero. They are more after the big stores that didn't pay taxes not the individual. Just use what you paid vs what it sold for. most times you can net to zero. Also if they are going to tax you like a small business then you get the same benefits of small business.
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some states already are in effect. Illinois for one is. If you are a casual seller of you collection, there are plenty of ways to get the tax to zero. They are more after the big stores that didn't pay taxes not the individual. Just use what you paid vs what it sold for. most times you can net to zero. Also if they are going to tax you like a small business then you get the same benefits of small business.
I was wondering about that myself as I was sent monthly summary statements from ebay in 2021- I don't make much profit after all of the fees and underpaid postage but most of the sales are like garage sale or old items I bought ages ago where I don't have receipts.
I know this will also show up in turbo tax for the 2021 return - I'm going to ask around to see how other Ebayers are going to handle this.
Alex
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I hate e-bay….and government taxes……
This one isn't ebay's fault. But I do hate taxes, especially when it seems like I am paying taxes ON taxes >( >(
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I was wondering about that myself as I was sent monthly summary statements from ebay in 2021- I don't make much profit after all of the fees and underpaid postage but most of the sales are like garage sale or old items I bought ages ago where I don't have receipts.
I know this will also show up in turbo tax for the 2021 return - I'm going to ask around to see how other Ebayers are going to handle this.
Alex
I don't know if I'll get one for 2021, hopefully not. And, I was planning on selling off a lot of older non-Wacky stuff this year, and like you, I have no receipts for things I bought ages ago; many items were purchased at toy shows, where no one wrote receipts. Actually, I only have receipts for recent online purchases where I saved PDFs....... Even for the Wacky minis, I don't have Target and Walmart receipts, just Amazon invoices.
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I originally thought that the tax would be on a gain. So If I bought a wacky packages collection for $1000 and resold it for $1500 the tax would be on $500. I read the rules, not the case. It is on the full amount and it does not even matter if there is a loss. So if I bought a piece of furniture for $5000 and sold it years later for $2500 it is taxed as income. The IRS is focusing on venues like Ebay, Etsy, Facebook market place. They will be monitoring bank accounts, paypal, venmo and like for transactions > $600. With paypal and venmo if you sell it as a good or service the tax will apply. Not sure what they are going to do with bank accounts yet.
Think of selling your boat, motor cycle, car, or some large ticket item. They will all be taxed now.
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This starts with 2022 not 2021 for those questioning.
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I originally thought that the tax would be on a gain. So If I bought a wacky packages collection for $1000 and resold it for $1500 the tax would be on $500. I read the rules, not the case. It is on the full amount and it does not even matter if there is a loss. So if I bought a piece of furniture for $5000 and sold it years later for $2500 it is taxed as income. The IRS is focusing on venues like Ebay, Etsy, Facebook market place. They will be monitoring bank accounts, paypal, venmo and like for transactions > $600. With paypal and venmo if you sell it as a good or service the tax will apply. Not sure what they are going to do with bank accounts yet.
Think of selling your boat, motor cycle, car, or some large ticket item. They will all be taxed now.
I was thinking like you were. If it is actually income tax on the full amount paid (which will likely include shipping and maybe sales tax), I'm done with this.
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The IRS is really cracking down on that. If you steal stuff, you have to claim it as income too.
https://www.washingtonexaminer.com/news/irs-rule-creating-twitter-buzz-stolen-property-must-be-claimed-as-income-on-taxes?fbclid=IwAR1rOAyoE5cfEdBYfXtH_J8oe0iyhxA4TqqmiRzo5d4SR1gKQF9ASkZZl6I
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They are more after the big stores that didn't pay taxes not the individual.
I am having a hard time agreeing with this. $600 is hardly going after big business. This IS geared more for the individual. Like we need to give government more money to spend, cause they spend it right!!
jim
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I originally thought that the tax would be on a gain. So If I bought a wacky packages collection for $1000 and resold it for $1500 the tax would be on $500. I read the rules, not the case. It is on the full amount and it does not even matter if there is a loss. So if I bought a piece of furniture for $5000 and sold it years later for $2500 it is taxed as income. The IRS is focusing on venues like Ebay, Etsy, Facebook market place. They will be monitoring bank accounts, paypal, venmo and like for transactions > $600. With paypal and venmo if you sell it as a good or service the tax will apply. Not sure what they are going to do with bank accounts yet.
Think of selling your boat, motor cycle, car, or some large ticket item. They will all be taxed now.
Wow, this doesn't even make sense, as in a regular business you would expense the cost and expenses related to acquiring and selling the item.
If Ebay (and the IRS) is required to treat us like a business, we should have the business expenses deducted.
A
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I am having a hard time agreeing with this. $600 is hardly going after big business. This IS geared more for the individual. Like we need to give government more money to spend, cause they spend it right!!
jim
Looks like the IRS is trying to make up for all the tax breaks to billionaires by going after us little folk. I'm so glad Trump and the Republicans gave billionaires those extra homes and yachts they so desperately needed. :-\ :-\
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Looks like the IRS is trying to make up for all the tax breaks to billionaires by going after us little folk. I'm so glad Trump and the Republicans gave billionaires those extra homes and yachts they so desperately needed. :-\ :-\
Pretty impressive to blame Trump for something the Biden admin is pushing. The spying on bank account activity is actually part of the Build Back Better bill.
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Pretty impressive to blame Trump for something the Biden admin is pushing. 👍
Pretty impressive redirection.
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Looks like the IRS is trying to make up for all the tax breaks to billionaires by going after us little folk. I'm so glad Trump and the Republicans gave billionaires those extra homes and yachts they so desperately needed. :-\ :-\
The Biden family has been a corrupt crime family making millions off the taxpayers for decades, and now Biden wants the IRS to spy on Americans and have access to their measly checking accounts... what's next Brown Shirts pounding on your door making sure you don't have any money under your bed or too much food in storage? Yep, it's coming...
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Pretty impressive redirection.
Redirection of what? The Biden admin are the ones putting forth the legislation empowering the IRS to spy on our bank account activity.
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Redirection of what? The Biden admin are the ones putting forth the legislation empowering the IRS to spy on our bank account activity.
What is the new law that the Biden admin has put forth to do this? Did it take a new law? How do we know Biden is behind this? Maybe the IRS decided on their own. I do know that Trump wanted tax breaks for billionaires. He bragged that it was the best thing his administration did.
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What is the new law that the Biden admin has put forth to do this? Did it take a new law? How do we know Biden is behind this? Maybe the IRS decided on their own. I do know that Trump wanted tax breaks for billionaires. He bragged that it was the best thing his administration did.
It is part of the Build Back Better bill.
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The Biden family has been a corrupt crime family making millions off the taxpayers for decades
Yes, Giuliani did some great investigative reporting on that.
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It is part of the Build Back Better bill.
Interesting. Specifics?
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some states already are in effect. Illinois for one is. If you are a casual seller of you collection, there are plenty of ways to get the tax to zero. They are more after the big stores that didn't pay taxes not the individual. Just use what you paid vs what it sold for. most times you can net to zero. Also if they are going to tax you like a small business then you get the same benefits of small business.
I can understand a lower amount to get taxed on, but getting to zero?! How is that possible?
Also, what is the percentage they are going to take? Say you earn 1000.00 (after eBay takes their cut).
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Interesting. Specifics?
https://www.nytimes.com/2021/11/30/business/irs-tax-gap-yellen.html
Of course, they are justifying it by saying it will help catch rich tax evaders. Even if it does, violating everyone’s privacy in service of that goal is inappropriate.
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I don’t even understand what the IRS would do with that information. Not every deposit into a bank account is taxable income. I buy my mother in law groceries, and she gives me a check to pay for them which I deposit in my checking account. Not taxable income. There is still a $16,000 per person gift tax exemption, so if a friend gives me a $15,000 gift and I deposit it in my savings account, that is not taxable income. So the only thing the IRS can do is see unexplained activity and decide to audit you even though you did nothing wrong. Overly intrusive and inappropriate.
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Looks like it's back to old school again: checks via snail mail, cash, and trading.
Online is great and easy, but the onerous regulations and paperwork with this $600 limit is going to prompt many ebay small sellers to just quit. With inflation over the years, it should be at least be a few thousand dollars before triggering a 1099.
Nice to see them trying to nickel and dime the little guy to death some more so they can continue their profligate spending habits
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https://www.nytimes.com/2021/11/30/business/irs-tax-gap-yellen.html
Sorry, I hate it when a link won't let you read the article unless you subscribe...
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https://www.nytimes.com/2021/11/30/business/irs-tax-gap-yellen.html
Of course, they are justifying it by saying it will help catch rich tax evaders. Even if it does, violating everyone’s privacy in service of that goal is inappropriate.
Exactly. The benefits do not justify the risks. As usual, the nothing-to-hide argument is a logical fallacy!
We can all pretend like doing deals offline will stick it to the man, but the real problem is obviously in Washington. They’ll always find a way to be intrusive. Less government is more.
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What is the new law that the Biden admin has put forth to do this? Did it take a new law? How do we know Biden is behind this? Maybe the IRS decided on their own. I do know that Trump wanted tax breaks for billionaires. He bragged that it was the best thing his administration did.
Biden could have used executive orders to eliminate any tax breaks he didn't like and he didn't. He could have put in a harsh tax on millionaires, billionaires, corporations, and he didn't. And while he is making people think he is a hawk on taxing the rich he is putting taxes like this on people like us that are the little guy. He had a lobster fest with one of those billionaires that lives on Nantucket for Thanksgiving.
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The biggest thief on the planet wants even more? Shocking!
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I originally thought that the tax would be on a gain. So If I bought a wacky packages collection for $1000 and resold it for $1500 the tax would be on $500. I read the rules, not the case. It is on the full amount and it does not even matter if there is a loss. So if I bought a piece of furniture for $5000 and sold it years later for $2500 it is taxed as income. The IRS is focusing on venues like Ebay, Etsy, Facebook market place. They will be monitoring bank accounts, paypal, venmo and like for transactions > $600. With paypal and venmo if you sell it as a good or service the tax will apply. Not sure what they are going to do with bank accounts yet.
Think of selling your boat, motor cycle, car, or some large ticket item. They will all be taxed now.
The tax thing is really just not that big of a deal folks. Saying your done selling on ebay because you have to pay taxes is like saying you refuse to work because you do not want to pay taxes. Yes it sucks I agree but what are you going to do about it?
I have a seperate bank account for ebay. They deposit my proceeds into that account. All of my shipping comes out of that account.
And yes, you can deduct the "cost of goods" from every sale. Of course you can. No different than any other business. You get a 1099 stating you made $28,000 on ebay last year...you deduct a portion of your cell phone bill, your internet, your space in your house for your office and storage of inventory, your milage on your car to and from garage sales and the post office and such, your COST OF GOODS, your SHIPPING PAID (because ebay counts the shipping you receive from a buyer as income)
and other expenses like boxes, bubble wrap, Rollo Printer, Ring Light......and whatever.....now your taxable income is down to say $12,000.........
Set aside 25% of your sales income for taxes to be safe......it is what it is........still doable.....still fun....
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Sorry, I hate it when a link won't let you read the article unless you subscribe...
Me too! Would have liked to have read the article...
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The tax thing is really just not that big of a deal folks. Saying your done selling on ebay because you have to pay taxes is like saying you refuse to work because you do not want to pay taxes. Yes it sucks I agree but what are you going to do about it?
I have a seperate bank account for ebay. They deposit my proceeds into that account. All of my shipping comes out of that account.
And yes, you can deduct the "cost of goods" from every sale. Of course you can. No different than any other business. You get a 1099 stating you made $28,000 on ebay last year...you deduct a portion of your cell phone bill, your internet, your space in your house for your office and storage of inventory, your milage on your car to and from garage sales and the post office and such, your COST OF GOODS, your SHIPPING PAID (because ebay counts the shipping you receive from a buyer as income)
and other expenses like boxes, bubble wrap, Rollo Printer, Ring Light......and whatever.....now your taxable income is down to say $12,000.........
Set aside 25% of your sales income for taxes to be safe......it is what it is........still doable.....still fun....
Thank you from getting that out of control thread back on track. In terms of presidents and taxes both sides need to stop pretending either side was ever interested in taxing the rich, how many poor politicians do you know? cut the red versus blue crap people we are all one big group United States of America and government is corrupt on both sides stop pretending its one way street.
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I have never sold on eBay, I’m concerned about my banking activities being scrutinized by the IRS, and I would feel the same way if Trump were pushing that. If Biden wants to catch wealthy tax evaders, than make the threshold $100,000, not $10,000, which will affect all of us.
Again I ask, why does the IRS need to know about my bank deposits, which are not necessarily taxable income?
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I have never sold on eBay, I’m concerned about my banking activities being scrutinized by the IRS, and I would feel the same way if Trump were pushing that. If Biden wants to catch wealthy tax evaders, than make the threshold $100,000, not $10,000, which will affect all of us.
Again I ask, why does the IRS need to know about my bank deposits, which are not necessarily taxable income?
The IRS would not get indvidual transaction listing. The IRS would get total amount and then obviously go after big fish ie someone makes $100k per year and somehow has $200k worth of bank deposits and claims $0 is income, it is worth a look. Could be all grandma reinbursements for grocery shopping or more likely a flow of monies that were subject to tax. Actuarians will come up with models to earmark amounts and ratios that draw attention. So given there is a problem of tax evaders, what is your solution? Let's not be critics without being authors. Perhaps you feel the problem doesn't exist at all?
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The IRS would not get indvidual transaction listing. The IRS would get total amount and then obviously go after big fish ie someone makes $100k per year and somehow has $200k worth of bank deposits and claims $0 is income, it is worth a look. Could be all grandma reinbursements for grocery shopping or more likely a flow of monies that were subject to tax. Actuarians will come up with models to earmark amounts and ratios that draw attention. So given there is a problem of tax evaders, what is your solution? Let's not be critics without being authors. Perhaps you feel the problem doesn't exist at all?
If those are the only people they are going to go after, make the threshold $100,000.
There is a gift tax exemption of $16,000 for a given person. There is no way yearly activity less than that could be considered a red flag.
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There is also a problem with crime. Should we stop everyone on the street and grill them about their daily activities to increase the chances of catching the few bad apples? Democrats used to be the voices raised against this type of arbitrary behavior by the authorities. What ever happened to civil libertarians?
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There is also a problem with crime. Should we stop everyone on the street and grill them about their daily activities to increase the chances of catching the few bad apples? Democrats used to be the voices raised against this type of arbitrary behavior by the authorities. What ever happened to civil libertarians?
Bingo.
And let's not stop at that, let's go through their cell phones, text message, email too.
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This will enable going after people who work for cash, and/or who wire money to family members in other countries. I wonder what constituent base that will hurt?
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There is also a problem with crime. Should we stop everyone on the street and grill them about their daily activities to increase the chances of catching the few bad apples? Democrats used to be the voices raised against this type of arbitrary behavior by the authorities. What ever happened to civil libertarians?
Yes, this is required. Except for illegal immigrants. They’re fine.
This issue isn’t about tax evasion, it’s about the government in the first place. They should not be taking our money (at least not in this magnitude), nor should they be in our business at all!
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Pretty impressive to blame Trump for something the Biden admin is pushing. The spying on bank account activity is actually part of the Build Back Better bill.
That's exactly right. This IRS overreach is on Biden's watch. Build Back Broke. Not sure why they want even more of our money since they claim these trillion dollar bills are already paid for. Record high inflation is a form of taxation too.
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The Biden family has been a corrupt crime family making millions off the taxpayers for decades, and now Biden wants the IRS to spy on Americans and have access to their measly checking accounts... what's next Brown Shirts pounding on your door making sure you don't have any money under your bed or too much food in storage? Yep, it's coming...
Yep. And we thought Jimmy Carter was bad.
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What is the new law that the Biden admin has put forth to do this? Did it take a new law? How do we know Biden is behind this? Maybe the IRS decided on their own. I do know that Trump wanted tax breaks for billionaires. He bragged that it was the best thing his administration did.
Read the build back better bill. It's in there. The IRS is not self governing and doesn't decide what to do on their own.
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The tax thing is really just not that big of a deal folks. Saying your done selling on ebay because you have to pay taxes is like saying you refuse to work because you do not want to pay taxes. Yes it sucks I agree but what are you going to do about it?
I have a seperate bank account for ebay. They deposit my proceeds into that account. All of my shipping comes out of that account.
And yes, you can deduct the "cost of goods" from every sale. Of course you can. No different than any other business. You get a 1099 stating you made $28,000 on ebay last year...you deduct a portion of your cell phone bill, your internet, your space in your house for your office and storage of inventory, your milage on your car to and from garage sales and the post office and such, your COST OF GOODS, your SHIPPING PAID (because ebay counts the shipping you receive from a buyer as income)
and other expenses like boxes, bubble wrap, Rollo Printer, Ring Light......and whatever.....now your taxable income is down to say $12,000.........
Set aside 25% of your sales income for taxes to be safe......it is what it is........still doable.....still fun....
Let me first say that I am not an accountant.
You are correct that you can deduct your expenses if you classify yourself as a business and not a hobby. The IRS has a distinction for both. If you classify yourself as a business and take deductions on a Schedule C, you will have to pay Social Security and FUTA taxes as well. As a hobbyist, you can't deduct supplies and travel expenses. I'm sure there are plenty of articles online explaining it, so I would recommend anyone to do that.
This is going to be one gigantic mess for many people at the end of this year. For most, it won't be worth the hassle.
The only good thing about it, is that this will crush most of the 'flipper' market that has gotten very large in the past couple of years.
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If those are the only people they are going to go after, make the threshold $100,000.
There is a gift tax exemption of $16,000 for a given person. There is no way yearly activity less than that could be considered a red flag.
Who said the IRS is gonna pay attention to anybody below a 100000? I don't like the intrusion but I'm not losing sleep over it, I have much more pressing concerns in day to day life than worrying about something like this. because I know how inept the IRS is from first hand experience.
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Anyone here use Turbotax Deluxe and is trying to report Ebay income without having gotten a 1099 from eBay?
Please contact me!!!
A
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Not looking to add to the political debate here about too many taxes and intrusion, but I CAN state that I got a call from our tax preparer last month asking me how much i paid for the three comic books I sold last year on E-Bay, because that can be deducted from the profit that appeared on my E-Bay 1099. Interestingly enough, the tax preparer took my word on what I paid for them, and I was honest. I keep handwritten records, but had purchased all 3 books before Covid at conventions or from dealers. I easily could have lied about what I paid, and therefore said I had ZERO taxable profit. I wasn't an intentional flipper, but when prices were at record high, and because my family need extra money to cope with runaway inflation, I sold and made several hundred dollars profit. Thank God the Plutocrats running this country want to teach Middle Class tax cheats like me a lesson...
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Anyone here use Turbotax Deluxe and is trying to report Ebay income without having gotten a 1099 from eBay?
Please contact me!!!
A
I never got a 1099 form from eBay either. My sales were not $20,000. Apparently they delayed the "$600 and over in sales" rule until 2023. Here is a chart from eBay...
(https://i.postimg.cc/bSdjPmT5/Screen-Shot-2023-03-09-at-3-12-58-PM.png) (https://postimg.cc/bSdjPmT5)
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I was told that Illinois started doing it last year…
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I never got a 1099 form from eBay either. My sales were not $20,000. Apparently they delayed the "$600 and over in sales" rule until 2023. Here is a chart from eBay...
(https://i.postimg.cc/bSdjPmT5/Screen-Shot-2023-03-09-at-3-12-58-PM.png) (https://postimg.cc/bSdjPmT5)
I got one for 2022 and my sales were not even close to $20,000. Who the heck knows the cost basis of an item purchased in 2006 with a group of other items? And the annoying part is that they report to the IRS only the gross transactions amount, not the net the seller actually receives after ebay fees. Sellers never actually receive the gross in the first place.
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I got one for 2022 and my sales were not even close to $20,000. Who the heck knows the cost basis of an item purchased in 2006 with a group of other items? And the annoying part is that they report to the IRS only the gross transactions amount, not the net the seller actually receives after ebay fees. Sellers never actually receive the gross in the first place.
OMG, they should correct it to report only what we receive!!
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They do provide an Excel spreadsheet with the details of the sales, which shows the ebay fees, but there must be some IRS regulation they are following that says to report the sales at gross. But IMO, cash is king for purposes of taxes, and we never ever receive the ebay-fees portion of the cash that they are reporting in the gross sales.
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I never got a 1099 form from eBay either. My sales were not $20,000. Apparently they delayed the "$600 and over in sales" rule until 2023. Here is a chart from eBay...
(https://i.postimg.cc/bSdjPmT5/Screen-Shot-2023-03-09-at-3-12-58-PM.png) (https://postimg.cc/bSdjPmT5)
I won't get one for 2022 but still want to report the ebay income - A