Question in regards to eBay and tax reporting, mostly in regards to how they handle non payers, etc.

[goldenpp72 | 1,234]

So as most of us know, next year the reporting threshold will be very low at 600 dollars, and I have been avoiding listing much because my current sales are at a higher area, but I had a question. Many have stated that eBay, Mercari, etc have no way of filtering out non payers, etc, as 'not counting' towards hitting these limits, but that just seems really stupid and impossible when it comes to tax accounting. If my eBay says I hit 10k of sales but I had say, 5k worth of welched transactions, is there a possibility it's going to be '15k' in turn?

I hope I worded that right, I don't sell too much but due to going a bit overboard on buying took it up this year, kind of sucks things are going downhill.

[darkchylde28 | 1,546]

41 minutes ago, goldenpp72 said:

So as most of us know, next year the reporting threshold will be very low at 600 dollars, and I have been avoiding listing much because my current sales are at a higher area, but I had a question. Many have stated that eBay, Mercari, etc have no way of filtering out non payers, etc, as 'not counting' towards hitting these limits, but that just seems really stupid and impossible when it comes to tax accounting. If my eBay says I hit 10k of sales but I had say, 5k worth of welched transactions, is there a possibility it's going to be '15k' in turn?

I hope I worded that right, I don't sell too much but due to going a bit overboard on buying took it up this year, kind of sucks things are going downhill.

I think you need to re-phrase, as if eBay reports you only had $10K worth of transactions, how would you ever have a possibility of being on the hook for $15K in taxes?  The $10K that eBay reports as you having completed/received funds for/whatever would be the maximum you would possibly be on the hook for, and if, in your example, fully half of those were non-paid transactions, you would either be on the hook for the $10K that eBay says you did total or, with you showing receipts of what you actually received, only $5K that you were paid for.  $10K potentially minus $5K would never lead to $15K in liability.

[goldenpp72 | 1,234]

5 minutes ago, darkchylde28 said:

I think you need to re-phrase, as if eBay reports you only had $10K worth of transactions, how would you ever have a possibility of being on the hook for $15K in taxes?  The $10K that eBay reports as you having completed/received funds for/whatever would be the maximum you would possibly be on the hook for, and if, in your example, fully half of those were non-paid transactions, you would either be on the hook for the $10K that eBay says you did total or, with you showing receipts of what you actually received, only $5K that you were paid for.  $10K potentially minus $5K would never lead to $15K in liability.

I think some of the confusion comes from an excerpt Mercari sent out at some point, that being that even if the sale wasn't finished that it would still go towards the threshold of reporting, even if not reportable for taxable income, and I've seen a few people state this is the case but it's hard to find a firm, yes or no. All reason would dictate that isn't the case but then, i'm not the expert here.

[darkchylde28 | 1,546]

Just now, goldenpp72 said:

I think some of the confusion comes from an excerpt Mercari sent out at some point, that being that even if the sale wasn't finished that it would still go towards the threshold of reporting, even if not reportable for taxable income, and I've seen a few people state this is the case but it's hard to find a firm, yes or no. All reason would dictate that isn't the case but then, i'm not the expert here.

I get that, but the math example you used is off.  If eBay/Mercari are reporting $10K in total sales, regardless of whether you managed to get paid on all of them, and you're saying that you only got paid $5K of the $10K, your maximum liability would be on the $10K the platform is reporting that you sold, but realistically, if you showed your bank records, etc., when filing your taxes, you would likely only be on the hook for the $5K that you got paid for.

Out of a possible $10K of total sales (completed or not), you should never have any chance at being responsible for $15K worth of sales.

I can't truly answer your question about whether you'll be on the hook with the tax man regarding sales that potentially didn't complete, just commenting on the math that you showed, where you asked if you would be on the hook for $5K MORE than the marketplace(s) said you had sold (which wouldn't be possible).

[goldenpp72 | 1,234]

The wording I used might not be great, basically, if you made 15k in sales but had over 20k worth if you factor in unpaid transactions, that they would still issue a form for reporting in turn. Hopefully that's a bit better?

[darkchylde28 | 1,546]

2 hours ago, goldenpp72 said:

The wording I used might not be great, basically, if you made 15k in sales but had over 20k worth if you factor in unpaid transactions, that they would still issue a form for reporting in turn. Hopefully that's a bit better?

I would think that they would only issue a form totaling your completed/paid transactions, as you wouldn't be liable for taxes on sales that you "made" but didn't actually complete.  As I understand it, if you end up filing the proper paperwork with eBay regarding such things, aren't they supposed to cancel out your charges for the percentage of the ending total they're supposed to get, if not the listing fee(s) as well?  At least in the US, you can't be taxed on income you didn't actually make.  So, in your original scenario where eBay says you made $10K total sales but only $5K got paid to you, you should legally only be on the hook for $5K, and at the end of it, eBay should realistically only be sending out paperwork stating $5K in completed sales for tax purposes, lest they end up with a ton of people filing lawsuits against them.

In your second scenario, it should work the same way.  $20K in sales, but only $15K paid, so $20K (total) - $5K (unpaid) = $15K (paid, total actual liability).  Anything different provided by eBay/Mercari should be followed up with a letter from your lawyer, and perhaps a big payout down the line if they don't fix that shit and knock off trying to tell the government that you received funds that you didn't.

[RegularGuyGamer | 2,014]

6 minutes ago, darkchylde28 said:

I would think that they would only issue a form totaling your completed/paid transactions, as you wouldn't be liable for taxes on sales that you "made" but didn't actually complete.  As I understand it, if you end up filing the proper paperwork with eBay regarding such things, aren't they supposed to cancel out your charges for the percentage of the ending total they're supposed to get, if not the listing fee(s) as well?  At least in the US, you can't be taxed on income you didn't actually make.  So, in your original scenario where eBay says you made $10K total sales but only $5K got paid to you, you should legally only be on the hook for $5K, and at the end of it, eBay should realistically only be sending out paperwork stating $5K in completed sales for tax purposes, lest they end up with a ton of people filing lawsuits against them.

In your second scenario, it should work the same way.  $20K in sales, but only $15K paid, so $20K (total) - $5K (unpaid) = $15K (paid, total actual liability).  Anything different provided by eBay/Mercari should be followed up with a letter from your lawyer, and perhaps a big payout down the line if they don't fix that shit and knock off trying to tell the government that you received funds that you didn't.

I really want this to be true. 

[darkchylde28 | 1,546]

11 minutes ago, RegularGuyGamer said:

I really want this to be true. 

If it's not, lawyer up, form a class action, and get a big, fat payout.  The government would go after someone's employer in a heartbeat for misreporting what they'd earned, so I can't imagine why eBay would expect to somehow get off easier, especially since they produce less tax revenue (compared to all of the companies in the country that pay into taxes versus the single entity that is eBay).

[DoctorEncore | 3,691]

2 hours ago, goldenpp72 said:

The wording I used might not be great, basically, if you made 15k in sales but had over 20k worth if you factor in unpaid transactions, that they would still issue a form for reporting in turn. Hopefully that's a bit better?

 

44 minutes ago, darkchylde28 said:

I would think that they would only issue a form totaling your completed/paid transactions, as you wouldn't be liable for taxes on sales that you "made" but didn't actually complete.  As I understand it, if you end up filing the proper paperwork with eBay regarding such things, aren't they supposed to cancel out your charges for the percentage of the ending total they're supposed to get, if not the listing fee(s) as well?  At least in the US, you can't be taxed on income you didn't actually make.  So, in your original scenario where eBay says you made $10K total sales but only $5K got paid to you, you should legally only be on the hook for $5K, and at the end of it, eBay should realistically only be sending out paperwork stating $5K in completed sales for tax purposes, lest they end up with a ton of people filing lawsuits against them.

In your second scenario, it should work the same way.  $20K in sales, but only $15K paid, so $20K (total) - $5K (unpaid) = $15K (paid, total actual liability).  Anything different provided by eBay/Mercari should be followed up with a letter from your lawyer, and perhaps a big payout down the line if they don't fix that shit and knock off trying to tell the government that you received funds that you didn't.

 

37 minutes ago, RegularGuyGamer said:

I really want this to be true. 

It is a relatively common scenario for auto-generated tax documents to be incorrect and you do not have to pay taxes on money you didn't receive. HOWEVER, the onus is on you to prove that the eBay documents are incorrect. You will need to file your tax return with the correct values along with receipts, bank statements, and other supporting documentation to justify why your values are different than those that eBay reported.

I'd recommend having a CPA help you, but you can do it yourself if you're very comfortable with the tax code. I've had similar situations in the past with my ETrade account and it worked out just fine because I submitted documentation to prove my claim.

Edited December 13, 2021 by DoctorEncore

[Tanooki | 4,940]

Seems like too much work for someone who just is getting rid of some old stuff on the side who doesn't have a business, has a tax id number, or as the post above does -- etrade stock stuff.

For us it's a minefield now next year because largely people are not going to have receipts on this, none of it can be proven unless it was a modern item meant for flips and profits which most aren't just going to be doing so the onus would utterly be on someone with no way to reduce that value as a deduction in respect to paid game value vs sold game value.  it's a shame, but they wanted to go after gig workers and stuff and a lot more people are getting taken for a ride over it.

Good luck whoever goes for it, I'm done, outside of cash only and trades now.  I've been filling bags of random cheap parts, pieces, items, all sorts of this and that and been dumping it including today even.

[docile tapeworm | 4,204]

4 minutes ago, Tanooki said:

 

Good luck whoever goes for it, I'm done, outside of cash only and trades now. 

This is what I’m looking at. I don’t have the time or knowledge for all that bs. Do you think enough people will do the same as you and me that it will hurt e bay? 

[Tanooki | 4,940]

@docile tapeworm If not in 2022 in 2023 when they get slapped with an IOU to the IRS in April I imagine they would.

It's not been very well broadcast by the media, definitely not the government either so they're looking for a pay day with some shock and awe on the refunds from the look of it.

 

My plan is pretty simple.  The $600 will cover anyone paying me in extreme rare cases or to cover shipping charges/slight differences in trades for the year -- that's it.

If someone trusts me highly enough I'll deal with cash, otherwise it's cash local using facebook marketplace and when it sells I'll just delist it as I removed it, not that it actually sold just to play it safe.  Around that, online and off I'll be happy to do trades.  If that fails, there's half price books as I'd rather take 20-30% its value than get crap maybe selling it at the twice a year neighborhood garage sale.

I went to HBP earlier today with 8 games and a few other cheap misc items, came out with 2 NES and 2 Genesis titles.  I know I took a hit, and I didn't care, that's how reality has to be now because I'm not paying taxes on getting rid of my own property online.  It's scummy and a lot of unnecessary work to get rid of a few video games or whatever comes up as it's just stupid.

[docile tapeworm | 4,204]

@Tanooki it feels scummy to me too. How many times can you tax the same dollar? I also think people are gonna have a surprise bill to the irs they didn’t realize or thought they understood.

you think it will bring back money orders? And like you hinted it could help brick and mortars as they will now have a better hook in the game. I will certainly be looking to trade more as well.

[Tanooki | 4,940]

@docile tapeworm For me my honest feeling on this is split.  It's 50/50 between sleazing it into a relief bill for the poor, poverty line and middle class and then pull that knife into the back within the mix.  And the other half is the utter impossible inconvenience of it for the dramatic majority of those it will impact, both in what it does, and for those who will find out the hard way in a little over a year with a tax bill, not a tax refund.

If you're already keeping tabs as you have a TIN, NPI, incorporated some small business, or on the side move enough to get a statement yearly anyway you already are a tax guru, damn good accountant, or you hired one to deal with the bs for you and either move product you can track what went in vs out, or leave enough overhead to just eat it all and have some payment (quarterly) plan setup or just imagine away X amount into an account to never touch.  Done and done, fine for them.  But if you're like us getting rid of old stuff, maybe a family dumping some old furniture, getting rid of some old clunker, whatever...you're not going to have it, and it'll be a surprise.  They're counting on that because if you can't iron clad write it off with legal facts, you're done.

 

And maybe on money orders, it's very likely possible I would think.  When you get them in the mail you can take them to X location and just get cash, it shouldn't be digitally logged for input or output so that may be the way like ebay was in the 90s and early 00s until Paypal was born.  And yeah definitely local stores will benefit, harassment and taxes, or just get maybe 1/2 to 2/3 less just to dump it for cash at a second hand store or a bit better in credit.  It makes enough sense I think both will see some level of resurgent use as will cash only deals too.

[TheGameCollector | 18]

Another way around it is I imagine every seller across the board could just add the amount of money they're going to be taxed into the price of their item. Let's say you're just doing it as a small time hobby and not flipping games constantly. Your sales will probably fall into the smallest tax bracket: 10%.

So just raise all your item prices 10% above the current going rate. If a game is trending at $100, raise it to $110. When you get your money, put 10% ($10 in this case) in your savings account, every time and do not buy anything with it. When tax season comes next year, use your savings account to pay what you owe. You should break even. It will eventually sell when the cheaper copies sell out.

[Tanooki | 4,940]

That's an interesting take on it, but since you're only dealing with a 1099 here, that value is rolled into what you really make a year on your actual job.  I think the value will get based upon total taxable income for the year, so 10% is low.

[Bonanza125 | 55]

On 1/7/2022 at 9:49 PM, TheGameCollector said:

So just raise all your item prices 10% above the current going rate. If a game is trending at $100, raise it to $110. When you get your money, put 10% ($10 in this case) in your savings account, every time and do not buy anything with it. When tax season comes next year, use your savings account to pay what you owe. You should break even. It will eventually sell when the cheaper copies sell out.

Probably won't get sales then if you increase the price 10%. There is just too much competition. 

[fcgamer | 4,732]

If someone pays with a check or money order, will it get logged?

[Tanooki | 4,940]

2 hours ago, fcgamer said:

If someone pays with a check or money order, will it get logged?

Good question, that's a big maybe, but doing reading I think it's safe.  The bank thing that was overturned was them ratting out movement of 10K or more on transactions in/out a year, wage income excluded.  If you go to a bank or other cashing space with a check or money order, sure(bank) they'll make sure you have an account with them to do it, but if you're taking cash directly and not placing it into the account no it wont be logged.  If they would have to log it it would be over a 10K level and they'd have to warn you first before proceeding.

So yes, if people here(like me) want to continue selling gaming/nerdy toy/anime whatever stuff in the forums, as long as the buyer and site are cool with it, money orders like the pre-paypal days would be the preferred method since cash can be stolen and checks can get very rubbery.

 

 

Does ebay even allow money orders anymore?  Not that it would matter, those jerks still want a bank account to use the site and would rat you out over the $600 anyway.  I'm betting Mercari, FB marketplace, etc are the same too.  I imagine you could dodge facebook some, offerup perhaps, just post stuff for sale, have someone buy it with a MO, then remove it.  FB allows you to sell locally and then just remove it, that gets around that reporting.

Edited January 10, 2022 by Tanooki

[inasuma | 1,203]

16 hours ago, fcgamer said:

If someone pays with a check or money order, will it get logged?

i think ebay will register it purely on the basis you committed to buy. so if you pay externally they will probably just assume you paid after enough time. but i've also not checked their terms

[Tanooki | 4,940]

It's interesting... I mean sure they could just assume you got it, but then it gets into a gray area of burden of proof.  That's basically charging someone tax for something you think they got...but did they?

[TheGameCollector | 18]

On 1/9/2022 at 5:11 PM, Bonanza125 said:

Probably won't get sales then if you increase the price 10%. There is just too much competition. 

Everybody selling has to do it all at once in solidarity against the taxation.

[mrbogus | 21]

I hadn't read this thread until today, but I did increase my ebay prices prior to the end of 2021 to account for the increased tax headache I will be dealing with getting rid of some of my unwanted collectibles.  I did have buyers already.

I'll put up with ebay and the 1099-K tax reporting for for this year. If I'm too annoyed by it, I'll just hang up my hat on the prospect of selling the small amount of stuff I have no use for.

Edited January 11, 2022 by mrbogus

[Tanooki | 4,940]

Ok here's one I'd love some clarity on.

 

Let's say you sell or not, it's not relevant directly ok, but you have say $100 in your wallet.  You take that $100 and place it in your personal home (pay check goes here) checking account.  Then due to ebay being scummy you had to setup an online banking account, and you want to move the money there.   (IE:  CASH -> Bank 1 -> Bank 2) is there any reporting on that?

I remember fury about 9mo ago of them trying to pass some rule that was like any money over a year at over $600 would get reported to the IRS if it wasn't paycheck/tax refund-credit related.  I think they amended it up back towards $10000.

So is there a solid answer to this one?  I've been thinking of taking some money I had between Christmas or dumping a few used goods at halfprice etc and putting it back into my former ebay shield account to buy stuff I could really use/need online but I don't want to get screwed.  Not a fan of carrying a lot of cash or paying in it, so if I can stuff it into that specific account I'd do it.