The impact of a $600 taxable threshold on the hobby

[snes_collector | 56]

One final thing to add- I don't think any people will see a huge change in taxes unless your online sales put you in a higher tax bracket. I would suggest just checking to see where you stand on that and how close you are to the next bracket.

[Silent Hill | 276]

"Lawmakers are rejiggering the proposal after a wave of criticism by Republicans and bank lobbyists. The $10,000 threshold replaces the $600 proposed by the Biden administration. It would exclude wage deposits and payments under federal programs — so that only accounts with “opaque” income streams would be reported to the government, according to a fact sheet from the Treasury Department released Tuesday."

[Tanooki | 4,932]

Problem is that's only for bank reporting of intake outake to the IRS.

 

Unless I'm missing something and they're reworking the shitty $600/yr second hand sales tax crap too are they?

[RegularGuyGamer | 2,012]

Nope that just looks like the bank deposit/withdraw law bring tossed around. 

[RegularGuyGamer | 2,012]

Just wanted to point out that in the build back better plan, the IRS is looking to increase their revenue by $200B billion by doubling their auditor staff.

However, originally they hoped it would generator over $350 billion so the plan is already starting to fall short. Either way, the eye is on the tax payers.

[RegularGuyGamer | 2,012]

Wall Street Journal reporting on it now.

https://www.wsj.com/articles/you-made-700-from-an-online-side-hustle-now-the-irs-will-know-11650015000

Ive seen 3 resellers in my area post that they're done with online sales in ads they've posted for clearing out sales since the start of the year too. The revival of the local market is coming. Start checking your local flea markets as those gutter dwellers start catching on 1 by 1.

Edited April 17, 2022 by RegularGuyGamer

[Brickman | 3,983]

58 minutes ago, RegularGuyGamer said:

Wall Street Journal reporting on it now.

https://www.wsj.com/articles/you-made-700-from-an-online-side-hustle-now-the-irs-will-know-11650015000

Ive seen 3 resellers in my area post that they're done with online sales in ads they've posted for clearing out sales since the start of the year too. The revival of the local market is coming. Start checking your local flea markets as those gutter dwellers start catching on 1 by 1.

Paywalled

I’d be interested to know the impact to eBay since this started.

Have you noticed a drop in listings for stuff you buy?

[docile tapeworm | 4,198]

What are the chances I get an audit for not reporting $5000 worth of income from eBay?

is there a penalty for getting audited?

if I get audited I guess my response will be “hey, ya idk how this works. Your show.” How will that process go? Will the irs say “ok you made $5000 from eBay and here is your bill”.

is the tax from the $5000 the % of the bracket I’m in?

Edited April 17, 2022 by docile tapeworm

[Gloves | 11,776]

9 minutes ago, docile tapeworm said:

What are the chances I get an audit for not reporting $5000 worth of income from eBay?

is there a penalty for getting audited?

if I get audited I guess my response will be “hey, ya idk how this works. Your show.” How will that process go? Will the irs say “ok you made $5000 from eBay and here is your bill”.

is the tax from the $5000 the % of the bracket I’m in?

I'm not an accountant but yeah I'd expect the amount owed to be the percent for the bracket within which that money lands. 

I'd guess $1000-2000 off your 5k. Probably on the lower end of that spectrum I think. 

[a3quit4s | 4,096]

14 minutes ago, docile tapeworm said:

What are the chances I get an audit for not reporting $5000 worth of income from eBay?

is there a penalty for getting audited?

if I get audited I guess my response will be “hey, ya idk how this works. Your show.” How will that process go? Will the irs say “ok you made $5000 from eBay and here is your bill”.

is the tax from the $5000 the % of the bracket I’m in?

When you file and your return doesn’t include the 1099-k that they were expecting it’ll likely be an automated process to send you something on the underpayment. Here are details on the penalties: https://www.irs.gov/payments/underpayment-of-estimated-tax-by-individuals-penalty

you could get ahead and file an addendum for this year and pay up or wait in fear lol

[Bonanza125 | 55]

17 minutes ago, docile tapeworm said:

What are the chances I get an audit for not reporting $5000 worth of income from eBay?

is there a penalty for getting audited?

if I get audited I guess my response will be “hey, ya idk how this works. Your show.” How will that process go? Will the irs say “ok you made $5000 from eBay and here is your bill”.

is the tax from the $5000 the % of the bracket I’m in?

The penalty can be 1 year in jail with up to a $25,000 fine. Saying "I don't know how this works" will not fly with IRS. IRS considers you a business and you will be responsible for whatever you don't report.

[docile tapeworm | 4,198]

13 minutes ago, Bonanza125 said:

The penalty can be 1 year in jail with up to a $25,000 fine. Saying "I don't know how this works" will not fly with IRS. IRS considers you a business and you will be responsible for whatever you don't report.

That seems pretty stiff.

[Gloves | 11,776]

13 minutes ago, Bonanza125 said:

The penalty can be 1 year in jail with up to a $25,000 fine. Saying "I don't know how this works" will not fly with IRS. IRS considers you a business and you will be responsible for whatever you don't report.

Yeah I'd probably avoid playing the "I didn't know" game, especially when you provably do in fact know. 

You'll have agreed to the terms on ebay as well as any updates they've provided about it. Otherwise you'd have to have ceased use of their services. I don't think it'd fly. 

[Bonanza125 | 55]

7 minutes ago, docile tapeworm said:

That seems pretty stiff.

Yeah which is why people should just hire an accountant and pay whatever is owed in taxes. It's not really a big deal sending in forms especially if you see an accountant already for other things.  

[docile tapeworm | 4,198]

7 minutes ago, Gloves said:

Yeah I'd probably avoid playing the "I didn't know" game, especially when you provably do in fact know. 

You'll have agreed to the terms on ebay as well as any updates they've provided about it. Otherwise you'd have to have ceased use of their services. I don't think it'd fly. 

I once got audited for reasons still unknown to me. The only thing I can figure is something to do with like a months worth of unemployment I got. I don’t remember how that process went I was getting paid cash as a roofer at the time. I think I had to pay like $300. I know I probably said something along the lines of (idk how this works, your show).

[docile tapeworm | 4,198]

Just now, Bonanza125 said:

Yeah which is why people should just hire an accountant and pay whatever is owed in taxes. It's not really a big deal sending in forms especially if you see an accountant already for other things.  

I think I’ll just jump from marketplace to marketplace. eBay, mecari, whatnot, posh $575 each I’m getting close to what I usually do in a year on the flip hobby. Then local sales on Facebook, set up at the flea market….

[RegularGuyGamer | 2,012]

1 hour ago, docile tapeworm said:

I think I’ll just jump from marketplace to marketplace. eBay, mecari, whatnot, posh $575 each I’m getting close to what I usually do in a year on the flip hobby. Then local sales on Facebook, set up at the flea market….

I'm pretty sure it's $600 total... But it's actually super easy, it just takes awhile to put in the values. If you use TurboTax, they walk you through it like anything else. You can probably ball park purchase price but what needs to be accurate is the total amount gross sales, the total fees, and the total the shipping labels had cost. That's at least what my friends accountant told him 

He actually went years without paying the 1099k he got and eventually cleared it up about 3 years later with his accountant, all without his wife finding out lol and he has about $65k in sales so, like, yeah you'll have to pay but also it's not like you're going to jail tomorrow. Really they'll eventually take it out your return if you get one and eventually garnish your wages. 

[docile tapeworm | 4,198]

@RegularGuyGamer I thought you only get reported if you make over $600 on any platform? If I make $500 on eBay will they report my earnings? Who is putting together that I made $500 on eBay and $500 on mecari if neither reports me for going over the $600?

[docile tapeworm | 4,198]

Shit I think I already fucked up. Gross pay I went over the $600 on eBay. 
i calculated net payouts to my bank at $580.

am I gonna get a 1099 from eBay? 

[RegularGuyGamer | 2,012]

12 minutes ago, docile tapeworm said:

Shit I think I already fucked up. Gross pay I went over the $600 on eBay. 
i calculated net payouts to my bank at $580.

am I gonna get a 1099 from eBay? 

I'm not going to lie, I actually don't know but from what I was told, since it's all connected to your SSN as a "small business" it won't matter the platform. Like you'll get one from each if the total is over $600 and each account is linked with your SSN bc they're just pooling it all together based on the SSN on file. But again, I don't actually know cuz it hasn't happened AND I'm too cheap to actually get an accountant but my buddy has one and that's what she said just a couple months ago. 

But yeah it's definitely gross. I had a year where I grossed $20350 on eBay and got one because they even counted the entire amount paid for shipping. It's total money from the sale they get you on and then it's up to you to put in the cost of shipping labels and materials actually paid.

I think this year it was like $200 for the TurboTax small business option but they just walk you through it. I always pay the extra $50 for them to represent me in the audit too. 

[Bonanza125 | 55]

29 minutes ago, docile tapeworm said:

Shit I think I already fucked up. Gross pay I went over the $600 on eBay. 
i calculated net payouts to my bank at $580.

am I gonna get a 1099 from eBay? 

Yes you will get a 1099

[docile tapeworm | 4,198]

@RegularGuyGamer @Bonanza125 thanks for your time and sharing what you know with me. I appreciate it because otherwise I would have learned the hard way.

[Tulpa | 3,492]

3 hours ago, docile tapeworm said:

if I get audited I guess my response will be “hey, ya idk how this works. Your show.”
 

If I were the IRS, I'd have you audited just because you said "your show." I'll give you a show.

[docile tapeworm | 4,198]

5 minutes ago, Tulpa said:

If I were the IRS, I'd have you audited just because you said "your show." I'll give you a show.

I understand when I’m in the wrong lane and it’s time to yield. 

[Mega Tank | 960]

Just now, docile tapeworm said:

I understand when I’m in the wrong lane and it’s time to yield. 

Did you claim that blasted Tetris cart as a loss?