"The phone is a remarkably complex, simple device, and very rarely ever needs repairs, once you fix them." - Dan/Panther
Started by Desert Phone Guy, September 12, 2021, 11:55:55 AM
Quote from: Desert Phone Guy on September 12, 2021, 11:55:55 AMI have always understood that a 1099 would be sent to sellers if they have over $20,000 in annual sales AND over 200 transactions.MY question is regarding the $20,000 plateau.In looking at my sales report, total sales INCLUDES collected sales tax and shipping costs, if I understand it. Moving over to the far right column, There is a NET sales column, which is considerably less.Does anyone know which benchmark that Ebay uses to kick out a 1099 to the seller AND the IRS? Seems wrong to use the gross sales line that includes shipping fees and collected sales sales tax.What experience has anyone had dealing with this situation?Thanks...Steve
Quote from: Doug Rose on September 15, 2021, 06:03:17 PMeBay or PayPal has nothing to do with The Federal or State Government. There "rules" are meaningless. Over $600 and you are responsible for paying taxes. If you think the IRS and your local State are going to let you make 20K and not pay taxes on it, you are in for a heap of hurtin' my friend.Only thing certain are death and taxes. You will be taxed.Not a risk I am willing to take.....Doug
Quote from: kleenax on September 18, 2021, 08:30:57 AMWe are speaking on 2 completely separate subjects here Doug:#1 subject: "At what $$ point do you get a Form 1099 from Paypal (for sales on eBay)?#2 subject: "At what $$ point are you "required" to "pay" (additional) income tax?The answer is this: The $20,000/200 transaction threshold is what the IRS has determined to be in excess of what they term "CASUAL INCOME", and if it is determined that your eBay (PayPal pmts) is your PRIMARY SOURCE of income, then you are "REQUIRED" to report it (and pay taxes on it). This DOES NOT MEAN that the IRS will be on your doorstep for you failing to report your PayPal earnings that are LESS THAN $20K AND 200 TRANSACTIONS. This is the "official" threshold (in the IRS COMPUTER ALGORITHMS) that will trigger a RED FLAG on your taxes.I have researched this extensively, and have been selling via PayPal/eBay since 1997, and have received a 1099 from PayPal (eBay did NOT issue 1099's up to June-2021). It was for "earning" in excess of $26,000/208 transactions via PayPal sales. Some of those sales were completely independent of eBay; the count is for TOTAL PayPal transactions, irrespective of whether or not they came from eBay sales.
Quote from: kleenax on September 18, 2021, 08:45:32 AMHit "send" too soon!So, in furtherance of this subject and Doug's answer:While it is technically "true" that you are "supposed" to pay (additional) income tax on ANY additional (untaxed) income, it doesn't mean that you will be punished/flagged/tracked-down for not reporting ALL income. If your TOTAL gross income is under say, $100,000, then your chances of being audited by the IRS is REALLY REALLY LOW for not reporting "ALL" (untaxed) income. And unless you are "hiding" hundreds-of-thousands of income dollars from the IRS, an "AUDIT" will consist of a letter requesting explanation OR payment of those alleged unpaid taxes; no jail time ;-) How do I know this? ;-) The IRS has a LOT of bigger "fish" to catch for tax evasion.
Quote from: FABphones on October 08, 2021, 01:17:05 PMReply #2 by JN sums it up for me:https://groups.io/g/singingwires/topic/off_topic_but_of_note_to_ebay/86155193
Quote from: Doug Rose on October 08, 2021, 02:18:22 PMBig John "loves" the Forum, just ask him...
Quote from: FABphones on October 08, 2021, 03:45:21 PMI must be missing something, I thought this thread was about completing an IRS form.Back on topic, as they say - simples - sellers should pay their taxes alongside every other citizen.