I.R.S. raises eBay threshold

[JailOJohn]

I am not a tax attorney, but my accountant says after the IRS lowered the threshold where you have to file a 1099-K form for sales on platforms like eBay from $20,000 to $600 in 2022, it was slammed with millions of additional forms. The $600 threshold remains in effect for 2023 sales. They have now backed off and raised the threshold back to $5,000 for 2024. However, he advises that Congress has threatened legal action against the IRS, so the threshold could go back down. Useful info for those of you who sell on eBay…

[Mr._Stubble]

I am not a tax attorney, but my accountant says after the IRS lowered the threshold where you have to file a 1099-K form for sales on platforms like eBay from $20,000 to $600 in 2022, it was slammed with millions of additional forms. The $600 threshold remains in effect for 2023 sales. They have now backed off and raised the threshold back to $5,000 for 2024. However, he advises that Congress has threatened legal action against the IRS, so the threshold could go back down. Useful info for those of you who sell on eBay…

Headline from the IRS website:

IRS announces delay in Form 1099-K reporting threshold for third party platform payments in 2023; plans for a threshold of $5,000 for 2024 to phase in implementation

As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year. This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn't expect one and may not have a tax obligation. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.

[DrDeal]

Headline from the IRS website:

IRS announces delay in Form 1099-K reporting threshold for third party platform payments in 2023; plans for a threshold of $5,000 for 2024 to phase in implementation

As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year. This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn't expect one and may not have a tax obligation. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.

Thanks. VERY helpful post.

Anrew

[bandaches]

Thanks. VERY helpful post.

Anrew

So for folks who did get 1099k and did report it as income did so unnecessarily and the IRS didnt ignore that claim and instead taxed the tax payers?  If so, does the IRS know it has a mountain of amendments that should be coming and money owed back to tax payers?

[JailOJohn]

Stupid, inefficient government cannot even steal from us effectively…..

[crackedjerk]

I have to say that I've been totally confused by ebay and the IRS.  I've never been sent a form (1099-K or whatever it's called) and I've just never included ebay in my tax forms in any way.  I'm not selling tons (maybe a grand or two at most for any given year) and no one's ever called me on it.  I guess I'll just continue to ignore it and hope it never comes back to bite me in the ass.

[FourRoses]

The biggest group of organized theft is entitled to a portion of everything you make. Gotta love it!

[quas]

Sellers are not going to be happy campers if they live in one of the states referred to below, as they will receive a 1099-K based on the reporting regs in their state (e.g., in NJ the threshold is $1,000):

For the tax year 2023, you will receive a Form 1099-K if any of the below apply:
You sold more than $20,000 and 200 transactions.
You did not give us your SSN, ITIN, or EIN and we withheld your payments or your payments were subject to withholding (this applies even if you did not have available funds to cover your withholding tax).
You reside in a State that has a lower reporting threshold than the Federal reporting threshold. Check with your state’s tax or revenue department to confirm the Form 1099-K threshold for your state.

https://stripe.com/docs/connect/1099-K