New eBay Managed Payments - They cut PayPal out!

[fcgamer | 4,723]

On 3/24/2021 at 7:20 AM, Tanooki said:

I brought it up, got mocked by one troll because I supposedly got away without paying tax for years like I'm a business with a tax ID or something.  It was 200 item + $20K.  2022 rolls out, the current slime in power dropped it to $600 total a year, items count doesn't matter.

What I guess may not be clear, if there will be a way to dodge it or not if you're just a private person not buying implicitly to sell for a profit, from those just getting rid of their old stuff like an online version of a garage sale.  I'm hoping sometime sooner than later as more learn of this junk digging is done, maybe a tax lawyer gets involved and dumbs it down for everyone, so we know what the deal is.  From there, then it's up to quitting selling online unless friends and family, hoping ebay and others setup some instant tax draw from your profits so your refund isn't ruined, or people are coached how to setup some IRS deposit plan so keep that impact off that vital refund people tend to really need and use.

So will this new method go into effect when? 2022?

[Tanooki | 4,932]

@yZoneFox yeah my state was one of the last hold outs against online state tax shenanigans on stuff.  Still though, this is far more complicated given the implications of how federal taxation is done and the forms you have to deal with, let alone how to pay it to them so you don't end up with a yearly tax bill instead of a refund.  That's entirely my sole concern at this rate, getting screwed losing a refund we live by.

@fcgamer Yup. 1/1/2022 they'll start watching, so cross that $600 level and you get snitched to the IRS.

 

It's still early almost April though, so hopefully more information and options roll out because this is going to shift a lot for amounts of new people having to send money to the IRS over this petty tax on second hand stuff.  Ideally love to just have whoever collects state collect fed and just send it to them immediately so refunds are preserved but I bet they won't be so helpful about it.

[BreaKBeatZ | 136]

8 hours ago, fcgamer said:

So will this new method go into effect when? 2022?

Earlier for some states. Unfortunately, it's in effect for my state (Maryland) in 2021.

 

https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

[LeatherRebel5150 | 1,056]

wonder if you can play the system and set up multiple accounts to stay under the threshold? I mean if your selling 10k thats not feasible but if your going to do 2k it might be worth the headache 

[arch_8ngel | 1,597]

46 minutes ago, LeatherRebel5150 said:

wonder if you can play the system and set up multiple accounts to stay under the threshold? I mean if your selling 10k thats not feasible but if your going to do 2k it might be worth the headache 

It's almost certainly by SSN.  So you could probably game it with your spouse to double the limit, but that would be about it.

If anything, it might serve to drive some traffic to second-choice selling sites -- but probably not much, since the fee structures at a place like Amazon are worse than just paying the taxes

Edited March 26, 2021 by arch_8ngel

[yZoneFox | 18]

Refunds are for woosies People are so afraid to pay taxes. Never withhold. I get it. Some (Most?) people like to get a W2 and the work is done, but that refund being held by the government over the course of your income for the entire year can be invested in ventures that will bring in profit.

I do agree that most people don't look at income from a yard / rummage sale as income they should report to the government so why they should report their online yard sales is the question that pops into mind.

It's always been the way of the government to tax twice and one more for good measure. Heck, there's even a death tax on what you bequeath to others. I'm not of retirement age, but they tax social security. I may be wrong, but I believe the only thing on which you are not taxed is money awarded by a court. I'm really surprised by the government not taxing the "FREE" money they gave taxpayers this past year.

Both Paypal and now Ebay have systems to track money. You can do it. I believe in you.

[Bonanza125 | 55]

36 minutes ago, yZoneFox said:

I do agree that most people don't look at income from a yard / rummage sale as income they should report to the government so why they should report their online yard sales is the question that pops into mind.

A yard sale is a 1 day event looking to unload stuff at bargain prices most likely at a loss not a profit. People who sell online want market value or even more and that in turn is a business. Technically everybody on this gaming website is considered a business. 

[jonebone | 1,307]

On 3/25/2021 at 3:31 PM, yZoneFox said:

Ebay charges sales tax to the buyer. They collect the tax and submit it to your state.

Example: Your imaginary state charges 1% sales tax. You sell an item for $100 with free shipping. The buyer pays $101. Ebay takes the $1 and sends it to your state government. Ebay reports to the government that you made $101 from the sale. You have to deduct the $1 tax collected or the government thinks you made $101, when actually you made $100.

This is one of the few comments you've made that isn't true.

In this case, only $100 hits account, the $1 in state tax was collected by ebay on your behalf.  So only $100 hits your revenue that shows up on the 1099-K.  Maryland is a state where 2020 was the rule so I went through all of this in taxes already with an eBay generated 1099.  Though it is worth noting that your "fee" is calculated on $101 instead of $100.  So you've lost a little more from that 13%, but not a big deal.

Other tiny nuance I noticed is that they go by date of payout, not by date of sale.  I'm paid out every Tuesday so sales from 12/30 and 12/31 didn't count on my 1099 as they weren't paid out until 2021.  That one took me some digging to finally figure out.

Finally, I can see how people view this as a big annoyance (it definitely is but ebay's end of month forms make it pretty easy even if you're poor at tracking your own stuff), the actual implication on taxes isn't that much.  Generating a Schedule C just looks at the roll-up level, it's not like you turn over 100 pieces of sales data to IRS.  They care about total.

And finally, IRS is about 7,500 people, we're around 330 Million?  Let's say 150 million tax filings accounting for children and some married filing only one.  Just do the math, they're woefully understaffed and it's not worth their time to audit the small guy.  If your totals match (i.e. W2s, Capital Gains, 1099s, etc.) then that passes the automated checks.  And it is much more worth their time to audit guys making really big money than the little guy.

Edited March 27, 2021 by jonebone

[fcgamer | 4,723]

17 hours ago, arch_8ngel said:

It's almost certainly by SSN.  So you could probably game it with your spouse to double the limit, but that would be about it.

If anything, it might serve to drive some traffic to second-choice selling sites -- but probably not much, since the fee structures at a place like Amazon are worse than just paying the taxes

Will this only effect eBay, or does the threshold count for PayPal transactions as a whole? It's the latter, right?

[RegularGuyGamer | 2,012]

6 hours ago, jonebone said:

And it is much more worth their time to audit guys making really big money than the little guy.

By percentage that's true but not by sheer volume.

In 2015it looks like the irs audited around 500k returns from people who made less than $50k that year and 13k of those who made $1M +

[arch_8ngel | 1,597]

 

8 hours ago, jonebone said:

This is one of the few comments you've made that isn't true.

In this case, only $100 hits account, the $1 in state tax was collected by ebay on your behalf.  So only $100 hits your revenue that shows up on the 1099-K.  Maryland is a state where 2020 was the rule so I went through all of this in taxes already with an eBay generated 1099.  Though it is worth noting that your "fee" is calculated on $101 instead of $100.  So you've lost a little more from that 13%, but not a big deal.

The eBay-collected-sales-tax shows up as part of the gross reported value on the 1099-K from Paypal -- at least it does on mine.

The reported number isn't how much hits your account -- it is the total transaction (selling price + sales tax + shipping) and does not include reductions for fees (either eBay or Paypal).

[arch_8ngel | 1,597]

7 hours ago, fcgamer said:

Will this only effect eBay, or does the threshold count for PayPal transactions as a whole? It's the latter, right?

It is per-service.  As far as I can tell, they don't have any cross-talk -- so Paypal, eBay, Amazon, any other services (Square, Cashapp, etc) are all individually handled with their own separate thresholds.

[jonebone | 1,307]

31 minutes ago, arch_8ngel said:

 

The eBay-collected-sales-tax shows up as part of the gross reported value on the 1099-K from Paypal -- at least it does on mine.

The reported number isn't how much hits your account -- it is the total transaction (selling price + sales tax + shipping) and does not include reductions for fees (either eBay or Paypal).

Hmm I finished mine in early Feb and swear it wasn't included in my total. I wonder if that's state by state, seems odd it would vary if so. 

Edited March 27, 2021 by jonebone

[arch_8ngel | 1,597]

2 minutes ago, jonebone said:

Hmm I finished mine in early Feb and swear it wasn't included in my total. I wonder if that's state by state, seems odd it would vary if so. 

I would be surprised if it varied by state -- but the only way I could get the totals to tally up correctly were if the sales tax was included.

The normally displayed value for a transaction in Paypal is the "net" value that dropped into your account.

But if you look at the details, at least on my account, the breakout shows the sales taxes that were handled by eBay.

And it is the total of those "gross" values that worked out the actual reported number on the 1099-K.

[Tulpa | 3,492]

2 hours ago, RegularGuyGamer said:

By percentage that's true but not by sheer volume.

In 2015it looks like the irs audited around 500k returns from people who made less than $50k that year and 13k of those who made $1M +

Yeah, big boys can fight a major audit for years with accountants and lawyers, while Joe Schmoes doing their own returns that get an audit are more likely to pay a penalty and move on. The IRS acts accordingly.

[yZoneFox | 18]

9 hours ago, jonebone said:

This is one of the few comments you've made that isn't true.

In this case, only $100 hits account, the $1 in state tax was collected by ebay on your behalf.  So only $100 hits your revenue that shows up on the 1099-K.

I have not done taxes for the 2020 year yet; however, in 2019 when taxes started being applied to things I sold on ebay, that tax hit my Paypal account and then was withdrawn later by ebay. You can see this if you export all transactions via CSV on Paypal.

Using ebay's new managed system, I believe the tax doesn't get deposited in a payout since I have seen no withdraws from my linked bank account. I have to check. I still believe they report the gross as arch_8ngel corroborates below.

1 hour ago, arch_8ngel said:

 

The eBay-collected-sales-tax shows up as part of the gross reported value on the 1099-K from Paypal -- at least it does on mine.

The reported number isn't how much hits your account -- it is the total transaction (selling price + sales tax + shipping) and does not include reductions for fees (either eBay or Paypal).

 

 

9 hours ago, jonebone said:

And finally, IRS is about 7,500 people, we're around 330 Million?  Let's say 150 million tax filings accounting for children and some married filing only one.  Just do the math, they're woefully understaffed and it's not worth their time to audit the small guy.  If your totals match (i.e. W2s, Capital Gains, 1099s, etc.) then that passes the automated checks.  And it is much more worth their time to audit guys making really big money than the little guy.

This is something I was tempted stating out loud, but I wouldn't bank on it. Tax forms are processed by machines. Those calculators look for discrepancies and probably put someone in a box if breaking the rules. This is all probably. I don't work for the IRS, but you said it, they only have so many human eyes to watch the growing population. It may be that someone is robo-audited and robo-sentenced to fines / imprisonment in the future by our robo-overlords.

[arch_8ngel | 1,597]

2 hours ago, Tulpa said:

Yeah, big boys can fight a major audit for years with accountants and lawyers, while Joe Schmoes doing their own returns that get an audit are more likely to pay a penalty and move on. The IRS acts accordingly.

Presumably, it's also dramatically easier to prove or disprove claims related to EIC.

[Tanooki | 4,932]

@jonebone how did you pay your taxes to the IRS exactly since you're already hosed by this stuff due to your state?  I'm trying to figure this out if I still want to even bother selling online as I *need* my yearly refund and can not afford to lose that.  I'm curious how one would pay them per transaction, week, month... they the jerks get their cut and I don't lose mine (refund) and pay on top of it if it went there.

If this is a total fallout I'm going to purge like mad this year in mass most of what I can so I don't care all that much, rest could just be local facebook and cash or PP (friends and family) locally to dodge the attack.

[Tanooki | 4,932]

I feel sick... I got the dreaded email from those bastards yesterday.  I've got 30 days.

 

Anyone care to dumb down the process here?  I'm NOT giving them bank access to where my checks go, so I'll open up something else.  Is there much to adding the whole bank acct/routing?  Limitations or expectations their shitty shady email doesn't mention?  I still intend to use PP as much as possible, screw them, so I need to create the absolute minimum bridge of access to those turds just so they don't cut me off, for now.  Between this and the dems attacking the working class tax shit with second hand I'm probably done at the end of the year, but need this in the meantime, then I'll cut that off too if necessary.

[WhyNotZoidberg | 585]

Today I found out that, even if I have hundreds or thousands of dollars still under ebay's hold, I can't use them for purchases.

Waht. The. Actual. Fuck. 

[RH | 4,903]

On 4/21/2021 at 1:16 PM, Tanooki said:

I feel sick... I got the dreaded email from those bastards yesterday.  I've got 30 days.

 

Anyone care to dumb down the process here?  I'm NOT giving them bank access to where my checks go, so I'll open up something else.  Is there much to adding the whole bank acct/routing?  Limitations or expectations their shitty shady email doesn't mention?  I still intend to use PP as much as possible, screw them, so I need to create the absolute minimum bridge of access to those turds just so they don't cut me off, for now.  Between this and the dems attacking the working class tax shit with second hand I'm probably done at the end of the year, but need this in the meantime, then I'll cut that off too if necessary.

Just move to a different platform.  I know... we can't because there's nothing with the same sales synergy.  I've not given them my bank account either and I really, really don't want to.  Did you ever find answers to your questions?  I doubt we have an alternative.

[MrWunderful | 2,927]

I just opened an online checking account, and now use that for ebay and paypal only. Its linked with my normal checking so I can throw money in or withdrawal really easy. But now my paypal is linked to my buying/selling checking account only, not my normal personal checking So I actually prefer it more. 

[Tanooki | 4,932]

1 hour ago, RH said:

Just move to a different platform.  I know... we can't because there's nothing with the same sales synergy.  I've not given them my bank account either and I really, really don't want to.  Did you ever find answers to your questions?  I doubt we have an alternative.

No, so I got proactive instead of reactive.

Step 1) Signed up with that aspiration summit account I mentioned.
Step 2) Once the debit card arrived, I then logged into ebay and started the process
Step 3) Once it was validated, I then added the DEBIT card, and *REMOVED* bank access

(Surprisingly this didn't set off ebay not having a direct link between bank-them, so it's bank-card-them)

So far it is working.  It's a headache slightly, because I don't want to keep large sums in that account in case of ebay shenanigans.  So I'll move money out as stuff comes in keeping a low balance in case of jerk stuff.  Since the bank isn't tied to my paypal acct directly and won't allow it, I reverse linked it!  I got on PayPal and tied the account, then the card, then removed the account and left the card.

Because of this it's easy, but has a 3-5day(business) gap from request to deposit/transfer.  Via paypal I make a request to the bank card and pull the funds, then days later it posts into PP.  From there if I have to go further, then from PP I can put it in my real bank if I need to cover a local purchase.

**In case of shenanigans, I can call the company, REVERSE the card charge, then block ebay.  They've jsut removed their own protections they had when they had Paypal as a choice.

[noiseredux | 232]

1 hour ago, MrWunderful said:

I just opened an online checking account, and now use that for ebay and paypal only. Its linked with my normal checking so I can throw money in or withdrawal really easy. But now my paypal is linked to my buying/selling checking account only, not my normal personal checking So I actually prefer it more. 

ugh. I'll prob have to do something like this too. I haven't touched ebay since the change was made. Out of curiosity, which online checking did you go with?

[MrWunderful | 2,927]

3 hours ago, noiseredux said:

ugh. I'll prob have to do something like this too. I haven't touched ebay since the change was made. Out of curiosity, which online checking did you go with?

Chase, because all my other accounts are with them. Its costs me 4$ a month for just basic checking because I didnt want to keep 5000$ in it or whatever the stipulations were for it to be “free”