RegularGuyGamer | 2,052 Posted October 3, 2021 Share Posted October 3, 2021 I'm looking ahead and thinking about what impact the new $600 threshold to receive a 1099K (down from $20,000) will have on the hobby. For instance, I bought 28 games this year on ebay this year so far and only 5 of those sellers clearly fall under the current $20k threshold to get a tax form. I wonder what will happen to those other 80% of seller. Ebay itself said about 85% of their sellers don't meet the $20k threshold. I just wonder what these sellers will do the year after they get a self employed tax form for selling $1k or even $5k of stuff they accumulate over a year at the thrift store or the flea market. Will it make those people give up on flipping? Maybe it'll being flea markets back to life. I an see now people flocking to Facebook to try to unload their stuff in person since Craigslist is a ghost town. Anybody have any predictions for what to expect? Then we can @ you in a two or three years and see who got it right. Link to comment Share on other sites More sharing options...
snes_collector | 57 Posted October 3, 2021 Share Posted October 3, 2021 (edited) It has already started in some states including the state where I live, Virginia. It was a major pain this year as I wasn't aware and had to calculate all my cost for the entire year without a plan. I have purposely stayed under the threshold this year but I have so many things to get rid of around the house that next year I plan to start back up. It isn't fun with the paperwork but my taxes didn't really go up much. I try to sell anything offline through Facebook marketplace before listing it. Also if a game store like GameStop offers credit pretty close to the online value when they do trade promotions I now take advantage because it is less work and the money isn't far off from what I'd make online. I've also traded with more people online now as no funds are involved. I don't have an independent game store close by but I assume this will help their trade ins. Most people that I know who sold online before still do for what it is worth. However, I no longer pick up items to resell unless the profit margin is too good to pass up (ie not longer pick up items where I'd make 10-20 profit.) Edited October 3, 2021 by snes_collector 2 Link to comment Share on other sites More sharing options...
Tanooki | 5,162 Posted October 3, 2021 Share Posted October 3, 2021 (edited) 1 hour ago, RegularGuyGamer said: I'm looking ahead and thinking about what impact the new $600 threshold to receive a 1099K (down from $20,000) will have on the hobby... Will it make those people give up on flipping? Anybody have any predictions for what to expect? Then we can @ you in a two or three years and see who got it right. Hah finally not me making this post within other threads that relate. Please bare with the post I broke it into my experience now/going forward into 2022 and then the requested predictions below I numbered. I will start saying this, if someone by then doesn't make an instant deduction of federal taxes setup on ebay, etc at the point of service that will be the deciding factor of what happens next year. They can do it for state, so why not?? This is NOT worth my refund which I always get. I refuse to pay taxes a third time (1 my job 2 my buying the item and now 3 selling vs trashing it) That $600 cap will be only used if I need to, to pay for postage if I do a trade with someone online, that's it. How this has impacted me? I've slowed up buying compared to previous years, increasingly so as this year gets closer to the end. I've been actively switching over to TRADES online first, cash as a last resort through Paypal. I was ok with trades before, but prefer the extra work on it now. Next year assuming there isn't a fix I will be ALL TRADES and PHYSICAL CASH ONLY. I'm also now going to do as I've been preaching to an addict friend of mine who buys/sells too much and got into martial problems -- KID ON A BUDGET. I will give myself a monthly allowance online/off for not so much price(within reason) but X items in a month. Since my friend has a big problem I've talked him into only keeping a few systems, of which one or two will be modded to run ROMs like nuts (one being a Wii with a usb hard drive.) For the cash/hunting reward he will just buy no more than 1-2 games (within price) a month for TG16, NES, Genesis -- THAT IS IT. Pretend to be the child who only got games for allowance and holidays. I think this is smart. I will do this to some degree and have been coaxing it if you noticed my far less 'finds' posts I do compared to 6mo or a year ago. If you have less crap coming in, you are spending more time PLAYING it. And if less is coming in, you're wasting less money on fluff that could have formerly been flipped. My predictions , and this excludes any online/offline business who already pays up anyway because they're over 20K, or under and love giving the gov't money for some odd reason 1) A large amount of sales will be LOST from online at all points: ebay, facebook, mercari, amazon, private forums, discord, etc. People are NOT going to want to have to factor in another what 15%? or something on what they earn. 2) The turn on that will be a downward valuing of what flipper will pay for goods, which will piss off those selling/offloading things because if someone was nice and gave 1/2 now they'll probably give 1/3 to 1/4 instead due to the added slice. 3) Trades will be on a large upswing as will be CASH sales, trusting long members online with money in a card, because even a money order goes to a bank and will get tracked. 4) I expect online retailers and processors to go after the US govt over this, lobbyists and whatever, to try and get some kind of a reasonable fix, a middle ground, but at the least they'll take a bone tossed where the IRS will do instant deductions so people don't feel the bite on their tax papers yearly. 5) I think there will be a surge of local/driving distance sales at flea markets, local online services(fb marketplace, offer up, etc) with CASH only. 6) I think mom/pop and chain stores(like half price books) who do second hand will see their stock of stuff swell from those also dodging the reaper. I think that swelling will cause a lot of it to sit for months, until they learn, people won't pay as much with ample supply so that'll get a correction too to a point. 7) More stuff will get bought being desired vs just because it's kind of a deal. Something you could make 5-10 or so on won't be appealing anymore with the taxes, nor will selling cheap junk either. The more valued stuff will be easy because people will be more likely to take it. Edited October 3, 2021 by Tanooki 3 Link to comment Share on other sites More sharing options...
Bonanza125 | 56 Posted October 4, 2021 Share Posted October 4, 2021 I think the people who want avoid paying taxes on flips will probably just use Facebook cash only/pick up only. A bunch of people will continue to sell on Ebay though cause there is more money in it and things sell faster. Link to comment Share on other sites More sharing options...
Chaos Control | 71 Posted October 4, 2021 Share Posted October 4, 2021 Do I get bonus points if I use my local Police station for safe in-person deals to avoid paying taxes? More seriously, I wouldn't be surprised to see if this gets repealed or indefinitely delayed. After all, this isn't the first time that very similar requirements were tried and successfully pushed back against. Ten years ago, the near-identical requirement from Obamacare that required businesses to report all $600 and higher transactions (it would have been a nightmare) was repealed: https://www.washingtonpost.com/blogs/2chambers/post/obama-signs-1099-repeal-into-law-marking-first-repeal-of-national-health-care-law-provision/2011/04/14/AFRhYjeD_blog.html ... history might not always repeat but it does rhyme, as the saying goes. There's reason for cautious optimism! 4 Link to comment Share on other sites More sharing options...
fcgamer | 5,033 Posted October 4, 2021 Share Posted October 4, 2021 Well, this is the point where I'll call it a day and stop selling. As I'm using my mother's PayPal account, no point in complicating her taxes for just a few extra K per year. Actually, I'd probably just start doing trades only, or selling on the local platform, and if any western folks wanted it, I could cut a deal, they could use a proxy service to bid, and the money would go straight to me without the bullshit. This whole situation appropriately comes at the same moment as the required electronic registration form for mailing to Europe, and the postal service here is likely to make this mandatory for the States too, even though it's technically not a requirement. In addition, most of the good deals are long gone, the finds are getting more expensive and are of lower quality, if not non existent. Maybe I'm just getting older and changing priorities, but it really seems to be a chicken egg situation, as my lack of interest (aside from the VGS community, and actual playing) was hugely affected by the shops locally drying up or moving out, greedy resellers, the whole Wata BS, and now these new regulations and rules. I have no qualms about paying taxes if I actually own a business, but paying taxes on clearing out my closet is where I draw the line. Link to comment Share on other sites More sharing options...
Brickman | 4,231 Posted October 4, 2021 Share Posted October 4, 2021 I'm not in the US but I'd be pretty pissed off if this was introduced here. $600 seems way too low, why not at least make it like $5k-$10k. This is probably also going to lead to even more of a throwaway society because people may just find it easier to throw something away then try and re sell it. 4 Link to comment Share on other sites More sharing options...
Hammerfestus | 4,124 Posted October 4, 2021 Share Posted October 4, 2021 I guess that’ll be it for my eBay selling. The thought of having to use Facebook turns my stomach though. I guess it’s going up here. 1 Link to comment Share on other sites More sharing options...
RegularGuyGamer | 2,052 Posted October 4, 2021 Author Share Posted October 4, 2021 6 hours ago, Hammerfestus said: I guess that’ll be it for my eBay selling. The thought of having to use Facebook turns my stomach though. I guess it’s going up here. My understanding of the language is that it's going to be $600 on any given online medium. So even getting $600 in online sales through PayPal will get you a 1099k 1 4 Link to comment Share on other sites More sharing options...
phart010 | 1,800 Posted October 4, 2021 Share Posted October 4, 2021 I believe that you are “supposed to be” paying tax on ALL income regardless of whether is reported by the various platforms. So if you have been paying your taxes all along, then no change. This new law just makes it so that the platforms have to report your earnings to the IRS if you have more than $600 in earnings. So eBay and others will send you and the IRS both a little slip that sums up your activity if it exceeds $600. So what? It’s not a huge burden, you don’t have to do the record keeping, eBay does that for you. You just have to make sure that you are withholding some of your earnings to pay the taxes due on them. Actually, if you have been paying your taxes on all of your income all along, then this should actually make things easier for you. Because now instead of you having to keep records of all your eBay activity, eBay will do all of that for you and summarize onto a neat little slip of paper. 1 Link to comment Share on other sites More sharing options...
tbone3969 | 316 Posted October 4, 2021 Share Posted October 4, 2021 (edited) 8 hours ago, Hammerfestus said: I guess that’ll be it for my eBay selling. The thought of having to use Facebook turns my stomach though. I guess it’s going up here. It seems even if you sell here it will be reported by PayPal unless you do friends and family. I hear that the Government wanting to track Crypto transactions is driving a lot of this. Edited October 4, 2021 by tbone3969 1 Link to comment Share on other sites More sharing options...
Silent Hill | 299 Posted October 4, 2021 Share Posted October 4, 2021 Hopefully this garbage doesn't fully go through. $600 from $20k/200 transactions is egregious and shit way to drum up money. I can't see any valid reason why anyone would be in favor of this. 1 2 Link to comment Share on other sites More sharing options...
LaC | 104 Posted October 4, 2021 Share Posted October 4, 2021 (edited) 15 minutes ago, phart010 said: I believe that you are “supposed to be” paying tax on ALL income regardless of whether is reported by the various platforms. So if you have been paying your taxes all along, then no change. This new law just makes it so that the platforms have to report your earnings to the IRS if you have more than $600 in earnings. So eBay and others will send you and the IRS both a little slip that sums up your activity if it exceeds $600. So what? It’s not a huge burden, you don’t have to do the record keeping, eBay does that for you. You just have to make sure that you are withholding some of your earnings to pay the taxes due on them. Actually, if you have been paying your taxes on all of your income all along, then this should actually make things easier for you. Because now instead of you having to keep records of all your eBay activity, eBay will do all of that for you and summarize onto a neat little slip of paper. Yes, this is not a new law. You are always supposed to claim business income. And ya'll can just write this off as garage sales funds. (ie: sold at a loss) So just just lie your ass off like you've been doing this the whole time when you didn't claim this income in the years prior. Warning this is not considered legal advice and I am not a tax professional. Edited October 4, 2021 by LaC 2 Link to comment Share on other sites More sharing options...
phart010 | 1,800 Posted October 4, 2021 Share Posted October 4, 2021 36 minutes ago, LaC said: Yes, this is not a new law. You are always supposed to claim business income. And ya'll can just write this off as garage sales funds. (ie: sold at a loss) So just just lie your ass off like you've been doing this the whole time when you didn't claim this income in the years prior. Warning this is not considered legal advice and I am not a tax professional. Yea it doesn’t even matter that they will be reporting it to the IRS. It only matters if you get audited. An audit requires an actual IRS agent to be assigned to your case. There’s only so many of them, so they’ll be focusing their audits on big money. If you are only selling a couple thousand bucks of old games on eBay nobody is gonna waste any time on you. With that being said, you should have always been paying taxes on ALL income. If you haven’t been doing so, consider yourself lucky that you’ve been getting away with it all these years Link to comment Share on other sites More sharing options...
fcgamer | 5,033 Posted October 4, 2021 Share Posted October 4, 2021 All it takes is to be clearing out the closet and selling a couple vintage Marshall amps, and you're over the limit. 2 Link to comment Share on other sites More sharing options...
Bonanza125 | 56 Posted October 4, 2021 Share Posted October 4, 2021 1 hour ago, phart010 said: I believe that you are “supposed to be” paying tax on ALL income regardless of whether is reported by the various platforms. So if you have been paying your taxes all along, then no change. Agree 1 hour ago, phart010 said: This new law just makes it so that the platforms have to report your earnings to the IRS if you have more than $600 in earnings. So eBay and others will send you and the IRS both a little slip that sums up your activity if it exceeds $600. So what? It’s not a huge burden, you don’t have to do the record keeping, eBay does that for you. You just have to make sure that you are withholding some of your earnings to pay the taxes due on them. Yes you do have to keep records. Your tax accountant will want to know the cost of goods sold, shipping cost, Ebay or Paypal fees. There is book work involved. Ebay just takes state sales tax and does that work. 1 hour ago, phart010 said: Actually, if you have been paying your taxes on all of your income all along, then this should actually make things easier for you. Because now instead of you having to keep records of all your eBay activity, eBay will do all of that for you and summarize onto a neat little slip of paper. Not true. Ebay is just going to report to the IRS earnings of $600 or more. You are responsible to tell the IRS how that money was earned. 1 Link to comment Share on other sites More sharing options...
TDIRunner | 2,952 Posted October 4, 2021 Share Posted October 4, 2021 The only thing that might change is that it will be slightly more difficult to lie on your taxes compared to before. Link to comment Share on other sites More sharing options...
Bonanza125 | 56 Posted October 4, 2021 Share Posted October 4, 2021 1 hour ago, tbone3969 said: It seems even if you sell here it will be reported by PayPal unless you do friends and family. I hear that the Government wanting to track Crypto transactions is driving a lot of this. Yes if you sell items here you will still need to report it cause yes Paypal does report the income. Yes Paypal will still report friends & family payments as well but you are responsible to explain to the IRS who the family members are and still some book work involved. All your doing would be not paying fees. Friends & Family payments are still considered income in the eyes of the IRS. Link to comment Share on other sites More sharing options...
Bonanza125 | 56 Posted October 4, 2021 Share Posted October 4, 2021 (edited) 39 minutes ago, phart010 said: There’s only so many of them, so they’ll be focusing their audits on big money. If you are only selling a couple thousand bucks of old games on eBay nobody is gonna waste any time on you. With that being said, you should have always been paying taxes on ALL income. If you haven’t been doing so, consider yourself lucky that you’ve been getting away with it all these years The IRS can and has audit people with $2000 worth of total transactions. It doesn't matter if its $200 or $200 million they will still audit if you don't explain or unclear where the money is coming from. Edited October 4, 2021 by Bonanza125 Link to comment Share on other sites More sharing options...
a3quit4s | 4,418 Posted October 4, 2021 Share Posted October 4, 2021 (edited) Facebook marketplace is just as bad as Craigslist when you try to sell, it’s all bullshit scammers and scalpers trying to pay you $10 for $100 items. If I can’t sell/trade it here I’ll just trade it in for credit at a game store. I’m probably done selling on eBay. I assume once most people realize eBay is reporting they will stop selling as well and thus why eBay is fighting tooth and nail for this not to go through. Edited October 4, 2021 by a3quit4s 2 Link to comment Share on other sites More sharing options...
Tanooki | 5,162 Posted October 4, 2021 Share Posted October 4, 2021 (edited) 17 hours ago, Shmup said: I'm not in the US but I'd be pretty pissed off if this was introduced here. $600 seems way too low, why not at least make it like $5k-$10k. This is probably also going to lead to even more of a throwaway society because people may just find it easier to throw something away then try and re sell it. Agreed and that is what I'm doing now. I've had some low dollar amount vintage and antique toys I've literally snapped and trashed because they'd sit on ebay for awhile in the $5-8 range and with the stupid fees, getting a box in cases(1-2 cost), and the greedy FVF into the shipping why the hell bother? Neighborhood had a garage sale on saturday, I advertised games, and no one showed up but had a few asks online, probably weather, and a few items went. The rest I put in a box and a day later used the money off that to chop into that pickup I got of those 2 nice GBA games. I coud have got easily more than 40 for all that stuff, but expenses, time wasted, resources wasted is no longer worth it. I'm about now trading, making green if it's worth minimally $10 online, or it's either going to half price books or being literally trashed. Funny it was the left who put this shit into a bill to punish the people they care to want to support the most by taxing the rich, the same left all up in arms over increasing land fill sizes, throw away society, and THEY created an expansion to that very problem being greedy twatwaffles. 1 hour ago, fcgamer said: All it takes is to be clearing out the closet and selling a couple vintage Marshall amps, and you're over the limit. All it takes is for grammy to die, and she leaves you a collection of her old Hummels. No one want that but very specific people, and well when you find someone will give you $2k for a curio load of them you'll have to decide did she want you paying the government on her old stuff, give it away, or toss it out. Or maybe you have old furniture and redo your main room, you want to sell it and make 1K, and now you owe the govt on $400... yeah, really fair. That is NOT a business, it's people just moving stuff along. The whole argument we're all in business is crap. 32 minutes ago, a3quit4s said: ...and thus why eBay is fighting tooth and nail for this not to go through. I hope for their sake and ours they succeed, if not to be removed, amended to a middle ground as it's just screwing a lot of people unnecessarily at this point. If it's not fixed by 1/1 I'm done selling online, it's all trades and cash only, or it's as you said, going to the game store, or garage sale, or at worst (ugh)facebook cash only local for whatever works. I'm already only buying to play now knowing this is coming too. Edited October 4, 2021 by Tanooki 6 Link to comment Share on other sites More sharing options...
RegularGuyGamer | 2,052 Posted October 4, 2021 Author Share Posted October 4, 2021 2 hours ago, phart010 said: So what? It’s not a huge burden, you don’t have to do the record keeping, eBay does that for you. You just have to make sure that you are withholding some of your earnings to pay the taxes due on them. The thing is tho that most of us aren't doing this as a business and it wouldn't be considered income since basically 90% of the US lives off of more than $20k a year. " f you are self-employed, then earned income is defined as the net earnings from that self-employment if you own or operate a business or farm." So the language is that now anyone selling more than $600 online is a small business which seems like a stretch. Also, unless Im misunderstanding, you're guilty until you prove yourself innocent to the IRS so you have to produce records of the cost of goods otherwise you'll have to pay tax on the entire gross sales figure outside of shipping and fees, and maybe those if you can't produce those records. Anyway, I'm thinking of the people who I see at yard sales. The absolute gutter folk that come out of the sewer twice a week to try to flip a vidya just to make their car payment every month. Those people are going to get completely fucked and blindsided by this new tax and will start resorting to their ol ways of being flea market exclusives. The only reason most people sell on eBay is its not a hassle. I'm surprised ebay isn't lobbying against this. It's basically going to lol their revenue since they report 85% don't pay tax already. Link to comment Share on other sites More sharing options...
snes_collector | 57 Posted October 4, 2021 Share Posted October 4, 2021 1 hour ago, Bonanza125 said: Not true. Ebay is just going to report to the IRS earnings of $600 or more. You are responsible to tell the IRS how that money was earned. To expand to this more- the report that ebay sends the IRS is the total amount of dollars taken in- which means you have to calculate all the deductions for shipping, taxes the buyer paid, and the ebay fees. So if you sell an item for $25, $4 shipping, and the buyer paid $1 the IRS will be shown $30. You have provide your tax professional the totals for all of those other expenses so you have to keep detailed records- and by personal experience- you better start doing it in January. 2 Link to comment Share on other sites More sharing options...
RegularGuyGamer | 2,052 Posted October 4, 2021 Author Share Posted October 4, 2021 9 minutes ago, snes_collector said: To expand to this more- the report that ebay sends the IRS is the total amount of dollars taken in- which means you have to calculate all the deductions for shipping, taxes the buyer paid, and the ebay fees. So if you sell an item for $25, $4 shipping, and the buyer paid $1 the IRS will be shown $30. You have provide your tax professional the totals for all of those other expenses so you have to keep detailed records- and by personal experience- you better start doing it in January. How do you deal with buying items with cash? Just bank withdrawal records? That's my main concern since 90% of stuff I buy and sell is cash sales. 1 Link to comment Share on other sites More sharing options...
fcgamer | 5,033 Posted October 4, 2021 Share Posted October 4, 2021 Off topic, but related to taxes, and I think it'll blow some of your minds. At all of my jobs here in Taiwan, past and present, the foreign employees are paid cash stuck in an envelope. So a day like today (which is payday), I'll receive $2000+ USD in cash. This is all in the name of the companies underdeclaring taxes, and then when I go do my local taxes here, what do you think those papers show, which ultimately then are given to my tax guy in the states. 2 1 Link to comment Share on other sites More sharing options...
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