The impact of a $600 taxable threshold on the hobby

[docile tapeworm | 4,198]

11 minutes ago, Tulpa said:

The site monitors your sales and has your tax ID (which if you don't have a separate business tax ID is your SSN.) Once you hit $600, they generate two identical 1099-K forms. One goes to you, the other to the IRS.

Ok. I apologize but here goes.

if I sell $500 on eBay and $500 on mecari do I get a 1099 and who does it come from?

if I sell $601 on eBay and $601 on mecari do I get two 1099’s?

if I sell $601 on eBay and $500 on mecari how many 1099’s do I get?

last question. Did I learn this from public education earlier in life and forgot?

[Tulpa | 3,492]

15 minutes ago, docile tapeworm said:

if I sell $500 on eBay and $500 on mecari do I get a 1099 and who does it come from?

 

You do not get a 1099 from either. The IRS expects you to report all income* and use a 1099-MISC for anything the 1099-K forms miss.

How many actually do that is another discussion.

15 minutes ago, docile tapeworm said:

if I sell $601 on eBay and $601 on mecari do I get two 1099’s?

Yes.

15 minutes ago, docile tapeworm said:

if I sell $601 on eBay and $500 on mecari how many 1099’s do I get?

You get one from eBay. The IRS will expect you to self report Mecari income using a 1099-MISC.

15 minutes ago, docile tapeworm said:

last question. Did I learn this from public education earlier in life and forgot?

We all learned in 1st grade. Since you dropped out in kindergarten, we don't expect you to know this.

 

 

*as a3quit4s said before, it's actually profit you're taxed on, not the sale. So if you sold bought something for $400 and sold it for $500, you'd be expected to report the $100 profit.

Don't count on eBay doing the math for you and just reporting the profit, though. They're just going to report the sales. It's up to you to report what profit you actually made. Have fun!

Edited April 19, 2022 by Tulpa

[Bonanza125 | 55]

56 minutes ago, docile tapeworm said:

Ok. I apologize but here goes.

if I sell $500 on eBay and $500 on mecari do I get a 1099 and who does it come from? You will NOT get a form for gross sales made from both Ebay and Mecari cause it's not over $600. However you will receive a form from your payment app/site or bank.

if I sell $601 on eBay and $601 on mecari do I get two 1099’s? YES you will get 2 1099 forms.

if I sell $601 on eBay and $500 on mecari how many 1099’s do I get? You will receive only 1 form cause you haven't gone past the $600 more on Mecari.

last question. Did I learn this from public education earlier in life and forgot?

Hopefully this answers the questions and helps you. No matter what site you sell on you will receive a form if you are $600 or over. Here is something else. If you sell anything on VGS or any gaming site and you receive Paypal or Venmo payments over $600 you will receive a form from the payment app/site or bank.

Edited April 19, 2022 by Bonanza125

[docile tapeworm | 4,198]

Whoops.

Edited April 19, 2022 by docile tapeworm

[Mega Tank | 960]

I heard someone say just sell everything cash and be done with it @docile tapewormhave the courage like @Tanookiand leave eBay behind!

Edited April 19, 2022 by Mega Tank

[docile tapeworm | 4,198]

15 minutes ago, Mega Tank said:

I heard someone say just sell everything cash and be done with it @docile tapewormhave the courage like @Tanookiand leave eBay behind!

It’s true he is a braver man than me….I’m not far behind him though. That Pokémon yellow I sold for $50 after tax and fees roughly pocket $30. I’m pretty sure I could grab $30 cash local. that’s an easy title to sell though.

Not using ebay hits you in the nuts for the $15-$20 stuff. I mean you only pocket $5-$8 after tax/fees but Soul caliber 2 on ps2 for $10 is a tough sale local cash. I had to lot it with mgs2, transformers and god of war 2 for $25 to move them local. And those are still nice titles that people want to play.

All the mid low filler I find in the wild that use to turn into $5 is gonna be tough to get anything out of from local.

ive probably made close to $500 local just dabbling in fb market/ flea market table local cash sales.

 

Edited April 19, 2022 by docile tapeworm

[MrWunderful | 2,927]

3 hours ago, fcgamer said:

Well considering you're rich enough to be linking to an article behind a paywall....

Not behind a paywall for me. 

[docile tapeworm | 4,198]

Knowing that $600 gross into the bank account no matter what avenue it comes from will probably take me out of the online sales. It’s just hobby sales for fun and taxes are a headache, not fun. Lol

Edited April 19, 2022 by docile tapeworm

[a3quit4s | 4,097]

2 hours ago, Tulpa said:

The site monitors your sales and has your tax ID (which if you don't have a separate business tax ID is your SSN.) Once you hit $600, they generate two identical 1099-K forms. One goes to you, the other to the IRS.

These seems correct to me. The 1099 is generated after you sell above $600 and they use your SSN or business tax ID # to tie that to an entity for tax purposes. 
 

I was simply pointing out each company generates a 1099 for sales, there isn’t just one big one. You hit $600 on eBay you get a 1099 from them, you only sell $250 on mercari you won’t get a 1099 from mercari and so on. You wouldn’t get one 1099 for $850. If you sold $600 on mercari as well you’d get two 1099s one from each  company. 

Edited April 19, 2022 by a3quit4s

[docile tapeworm | 4,198]

@a3quit4s

So maybe I should have asked this directly sooner lol

can I dance around from eBay, mecari, whatnot… staying under $600 gross and avoid a 1099 or will my bank say “nice try here’s your sign” (1099)?

[a3quit4s | 4,097]

Just now, docile tapeworm said:

@a3quit4s

So maybe I should have asked this directly sooner lol

can I dance around from eBay, mecari, whatnot… staying under $600 gross and avoid a 1099 or will my bank say “nice try here’s your sign” (1099)?

Technically even if you don’t generate a 1099 you should still be claiming that as income but yes, if you stay under the $600 on many different sites you won’t generate a 1099 and the IRS won’t know about it. Personally, I’d just stick to Craigslist and Facebook marketplace and do local deals or just trade for stuff you want but to each his own

[LeatherRebel5150 | 1,056]

36 minutes ago, a3quit4s said:

Technically even if you don’t generate a 1099 you should still be claiming that as income but yes, if you stay under the $600 on many different sites you won’t generate a 1099 and the IRS won’t know about it. Personally, I’d just stick to Craigslist and Facebook marketplace and do local deals or just trade for stuff you want but to each his own

Its my understanding that even if you bounce around sites, if you only take payment on one platform (paypal) then paypal will report over $600. So if you sell $300 on ebay and $300 on mercari but both payments are received through paypal, then paypal will trigger the 1099

[a3quit4s | 4,097]

19 minutes ago, LeatherRebel5150 said:

Its my understanding that even if you bounce around sites, if you only take payment on one platform (paypal) then paypal will report over $600. So if you sell $300 on ebay and $300 on mercari but both payments are received through paypal, then paypal will trigger the 1099

100% correct

[docile tapeworm | 4,198]

@LeatherRebel5150 @a3quit4s my eBay and mecari go direct to my bank account. I don’t use PayPal on those sites. I feel like @Bonanza125is saying if I receive $600 into my bank account no matter if it’s $300 from eBay and $300 from mecari the bank will report it and I’ll receive a 1099.

[a3quit4s | 4,097]

39 minutes ago, docile tapeworm said:

@LeatherRebel5150 @a3quit4s my eBay and mecari go direct to my bank account. I don’t use PayPal on those sites. I feel like @Bonanza125is saying if I receive $600 into my bank account no matter if it’s $300 from eBay and $300 from mecari the bank will report it and I’ll receive a 1099.

Banks in my experience do not issue 1099-k’s but I’m not a tax expert and can 100% be wrong. It’s usually the payment processor which can be eBay, Mercari, StockX or whatever and can also be PayPal if that’s what you choose. Your bank is just where the money ends up not who initiated the transaction. You’d want to be very careful if you are using PayPal as the processor as @LeatherRebel5150pointed put for many different services. 

[RegularGuyGamer | 2,012]

2 hours ago, docile tapeworm said:

@LeatherRebel5150 @a3quit4s my eBay and mecari go direct to my bank account. I don’t use PayPal on those sites. I feel like @Bonanza125is saying if I receive $600 into my bank account no matter if it’s $300 from eBay and $300 from mecari the bank will report it and I’ll receive a 1099.

The thing is tho is that you're TAX ID number is your SSN. If these sites have your SSN then the amount you earn is tied to that number. It's possible you will be in the hook for whatever dollar amount is associated with your SSN. 

[docile tapeworm | 4,198]

2 minutes ago, RegularGuyGamer said:

The thing is tho is that you're TAX ID number is your SSN. If these sites have your SSN then the amount you earn is tied to that number. It's possible you will be in the hook for whatever dollar amount is associated with your SSN. 

Ok. That makes sense. I don’t think they have my ssn though. At least I don’t remember giving that information to them.

I’m not worried about $600 going through PayPal because like I said my eBay and mecari both go direct deposit to a checking account. I use PayPal for transaction here but most people are cool about going f&f for me.

[Tanooki | 4,933]

Each site reported 100% individually, they don't collude to sell you out to the IRS for a tax form.  It's not their job, and they don't care as long as THEY stay legal and them alone.

So if you use ebay and tie that to your bank, then it's $600 gross on ebay that's it.
If you use Mercari and that one gets paypal, then it's another $600 gross on paypal for the year.
And if you have a facebook marketplace account tied to an online only checking acct (because of ebay bs last year) +600

...and so on.  As long as each place you use never cracks $600 and where the money get funneled does not overlap, you're set.  Once any, combo, or all go over $600 each entity will issue you a 1099 and notifies the IRS about it.

 

To me it's a hassle.  I'm glad we're finally digging out and I don't feel the need to 50/50 buy and flip to stay above board on random rarer months where shit hit the fan or just so I could even have a hobby at all over a period of 10 years.  I can't prove I got an item 10minute or 10 years ago, no receipts, so anything I may have always owned or not will get bitchslapped with a tax bill which I find disgusting and unacceptable.  They should have set a 5k or 10k cap for individual non-business owners, a sensible here and there, garage sale, whatever slush fund cap...but hey, look who passed it, tax n' spend right?

Just go all cash and local, make online exceptions for friends on a trusted site like here where both will be fine sending cash, money orders, or friends and family on paypal...or save that small cap to pay for postages and trade difference gaps.

I've sold like 1200 in stuff or so this year locally in cash, guarantee you with the 600 cap on ebay I would have made the same, maybe slightly less.  Screw that, not worth the hassle of either losing my refund or guesstimating and paying the IRS quarterly to guard from that since I'd have to call everything profit when I guarantee you at this rate, it's break even or a loss given what is going out now.

[docile tapeworm | 4,198]

@Tanooki I been dabbling in local sales and I’m not doing too bad. Where the online sales will hurt me is a flip non video game items too. Selling niche stuff local will be tough.

I have my eBay and mecari direct depositing to the same checking account if eBay deposits $400 and mecari deposits $200 your saying I will get a 1099? If so who reports it and who generates the 1099?

[Link | 2,709]

On 4/18/2022 at 1:29 PM, Tabonga said:

President Joseph Robinette Biden Jr. 

What's up with the full entire name treatment? 

[Tabonga | 2,317]

1 minute ago, Link said:

What's up with the full entire name treatment? 

That is what one of the sources I used stated.  I imagine that is how the bill was signed since that is his legal name.

[Tulpa | 3,492]

43 minutes ago, docile tapeworm said:

Ok. That makes sense. I don’t think they have my ssn though. At least I don’t remember giving that information to them.

If they haven't asked for it yet, they will soon. If you don't provide it, they won't process payments.

edit: It looks like they will ask for it once you hit the $600 threshold.

https://www.ecommercebytes.com/2021/12/20/ebay-must-collect-social-security-numbers-from-sellers/

Edited April 20, 2022 by Tulpa

[a3quit4s | 4,097]

34 minutes ago, docile tapeworm said:

@Tanooki I been dabbling in local sales and I’m not doing too bad. Where the online sales will hurt me is a flip non video game items too. Selling niche stuff local will be tough.

I have my eBay and mecari direct depositing to the same checking account if eBay deposits $400 and mecari deposits $200 your saying I will get a 1099? If so who reports it and who generates the 1099?

Lol it has nothing to do with your bank account. I’m not sure why you are stuck on that. In your example no one would generate a 1099 because you haven’t crossed the $600 threshold on any site. If you sold $600 on eBay and $600 on mercari each of them would send you a 1099. The payment processor is liable for generating the 1099

Edited April 20, 2022 by a3quit4s

[Tanooki | 4,933]

What he said there, no...each payment processor (not your bank) has a 600 cap before they tell the IRS.  The only thing I could think of is if you used paypal/venmo as your 'bank' on sites that allow it, because they do watch for the 600 cap for all processed transactions listed as goods and services. They do NOT track friends and family flagged transactions.  That's why I brought that up in the earlier post, because if you could get people on here who trusted you to send you money and you went over $600 on paypal, as long as those people used F&F and not G&S you're in the clear.  I mean they might catch on if the tool writes 'thanks for the super famicom and 10 games dude' as that's likely not friends and family, that's a payoff.

[docile tapeworm | 4,198]

3 hours ago, a3quit4s said:

Lol it has nothing to do with your bank account. I’m not sure why you are stuck on that. In your example no one would generate a 1099 because you haven’t crossed the $600 threshold on any site. If you sold $600 on eBay and $600 on mercari each of them would send you a 1099. The payment processor is liable for generating the 1099

Sorry. I got stuck on that idea because I was reading it as if PayPal OR where your payments get funneled too (my bank account) go over $600 I would get a 1099.

I appreciate everyone time and effort here to help me. Thank you.