New tax law for selling

[Fatcamp]

Has any of this actually happened to anyone here?

Anyone been charged the 24% or had it withheld?

I have to be over that but I do more buying than selling.

 

[fwafwow]

There are a few other threads on this topic, including ones in which I’ve commented enough that I expect folks are sick of me. Some of what is posted above is accurate, some is not. Some is correct but incomplete. If I don’t get negative memes, I may at some point get more specific, but the game is on. And you can search in the interim.

 

[Kimber7man]

They announced that you will not be taxed for tax year 2022, and they expect Congress to do something about raising the $600 level in 2023.

Keep all your receipts, when sell something for less than the amount on your receipt, put that receipt in your tax file and print out a copy of the PayPal sales receipt (or screen shot). Both of them will be all the proof you need that you did not make a profit, and thus do not have a taxable gain.

 

[def90]

The 1099 reporting has been delayed for a year..

IRS announces delay for implementation of $600 reporting threshold for third-party payment platforms’ Forms 1099-K | Internal Revenue Service

IR-2022-226, December 23, 2022 — The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season.

www.irs.gov

 

[NRA4LIFE]

Keep all your receipts and print out all your transaction evidence and hold on to them. What torques me off is you can't offset your profits by losses. I sell tickets online and I can't claim any losses.

 

[snowymtnwolf]

This all sounds great - but look at taxes paid on a car - every time that dang thing is sold, there’s a full tax owed (obviously state dependent). I just hope it doesn’t turn into the “used car example of taxing”


Sent from my iPhone using Tapatalk

 

[roadrunner]

How is everyone managing the new tax law? I am trying to sell my Cimarron and needed to use goods and services. With the new tax code, I would be hit with a 24% income tax on $800. That’s $192. Plus the shipping, and PayPal fees. Just wanted to hear some thoughts and discussion as I am pretty frustrated right now. How does our future of selling gear look?

New tax law??

 

[codybrown]

Different form of payment. It's going to get messy when the audits start. Keeping a good enough paper trail to satisfy the irs will be a near impossible task.

 

[Bolt]

Just have the customer mail a check?

Sent from my Pixel 6 using Tapatalk

 

[ODB]

Why do i owe taxes at all? Because something I bought for personal use happened to appreciate in value since I bought it?

You think about this shit long enough and you start to get the feeling you don’t really ever own anything you can’t eat.

 

[fwafwow]

Why do i owe taxes at all? Because something I bought for personal use happened to appreciate in value since I bought it?

1. This has been the law for a very long time. Any accession to wealth is income, unless there is an exception (like a gift). Personal use is irrelevant. If you find money, that's income too.
2. The new reporting rule (not law) was deferred, but it's in place for 2023 (so anything you are selling now "counts"). I did read an article the other day, however, that cautions taxpayers that some payment platforms may have already geared up for the rule to apply and Forms 1099-K might be issued for 2022 transactions under the new rule, even with the deferral. I expect that shouldn't be an issue for PayPal.
3. As @sndmn11 and others have pointed out, the form of payment matters as to whether this reporting rule is applicable. But the form of payment doesn't change whether you have income or not (see #1).
4. Keep good records, but if you can't find a receipt, there may be a solution (go to the IRS Q&A in one of the threads below).
5. It would be great if Congress changed this rule, but I could say that about a lot of things, especially things that are far more important. But I have little hope.
6. I'm pretty confident that TurboTax will be sufficient.

FWIW - here are other relatively recent threads in which most of the above have been covered:

IRS Delayed the 1099 600$ rule for one year. See article

https://www.dailymail.co.uk/news/article-11570271/IRS-delays-criticized-new-tax-rule-hustles-600.html At least we have another year to buy and sell gear. its a damn shame this is what our country has resorted too. Hoping a new Administration will throw this crap out.

rokslide.com

Don’t forget to report your classified sales to the IRS!

https://www.forbes.com/advisor/taxes/cash-apps-to-report-payments-of-600-or-more/ This is going to be a mess. I hate checks and money orders but it seems like the best options unless you want to keep all receipts and report sales as a loss.

rokslide.com

So, money orders.

Looks like money orders are going to become more common. I have never sent or received one but I have been told by my wife that they are one of the most common fraudulent forms of payment. She managed one of those cash advance places and they wouldn't even cash them. Is it wise to ask for a...

rokslide.com

 

[ODB]

1. This has been the law for a very long time. Any accession to wealth is income, unless there is an exception (like a gift). Personal use is irrelevant. If you find money, that's income too.
2. The new reporting rule (not law) was deferred, but it's in place for 2023 (so anything you are selling now "counts"). I did read an article the other day, however, that cautions taxpayers that some payment platforms may have already geared up for the rule to apply and Forms 1099-K might be issued for 2022 transactions under the new rule, even with the deferral. I expect that shouldn't be an issue for PayPal.
3. As @sndmn11 and others have pointed out, the form of payment matters as to whether this reporting rule is applicable. But the form of payment doesn't change whether you have income or not (see #1).
4. Keep good records, but if you can't find a receipt, there may be a solution (go to the IRS Q&A in one of the threads below).
5. It would be great if Congress changed this rule, but I could say that about a lot of things, especially things that are far more important. But I have little hope.
6. I'm pretty confident that TurboTax will be sufficient.

FWIW - here are other relatively recent threads in which most of the above have been covered:

IRS Delayed the 1099 600$ rule for one year. See article

https://www.dailymail.co.uk/news/article-11570271/IRS-delays-criticized-new-tax-rule-hustles-600.html At least we have another year to buy and sell gear. its a damn shame this is what our country has resorted too. Hoping a new Administration will throw this crap out.

rokslide.com

Don’t forget to report your classified sales to the IRS!

https://www.forbes.com/advisor/taxes/cash-apps-to-report-payments-of-600-or-more/ This is going to be a mess. I hate checks and money orders but it seems like the best options unless you want to keep all receipts and report sales as a loss.

rokslide.com

So, money orders.

Looks like money orders are going to become more common. I have never sent or received one but I have been told by my wife that they are one of the most common fraudulent forms of payment. She managed one of those cash advance places and they wouldn't even cash them. Is it wise to ask for a...

rokslide.com

I really don’t care about a law. I care about people going about the business of daily life and when, they stumble into luck with the value of some thing they have likely already paid taxes on, if they sell it for a small profit the goddam government thinks they deserve a piece.

If we simply follow laws like lemmings then no complaining when the laws stop hunting, take your guns, remove your kids from your house because you won’t call him a her, take another 10% for reparations, another 3% for Ukraine, or decline your purchase because you’ve eaten enough meat this month.

 

[fwafwow]

I really don’t care about a law. I care about people going about the business of daily life and when, they stumble into luck with the value of some thing they have likely already paid taxes on, if they sell it for a small profit the goddam government thinks they deserve a piece.

If we simply follow laws like lemmings then no complaining when the laws stop hunting, take your guns, remove your kids from your house because you won’t call him a her, take another 10% for reparations, another 3% for Ukraine, or decline your purchase because you’ve eaten enough meat this month.

I just tried to answer the question. No judgment was intended and I'm not trying to defend anything. It is what it is. If you/I/we don't like it, that's another kettle of fish. I'd say write your rep or vote in someone else, but I personally don't think anything short of term limits will lead to any changes.

 

[HeavyFootHick]

Don't sell with electronic pay services. Request either a personal check or USPS money order.
Kind of scary too think but would not surprise me if the IRS would require the Postal Service report Money Order transactions as well.

 

[sndmn11]

1. This has been the law for a very long time. Any accession to wealth is income, unless there is an exception (like a gift). Personal use is irrelevant. If you find money, that's income too.
2. The new reporting rule (not law) was deferred, but it's in place for 2023 (so anything you are selling now "counts"). I did read an article the other day, however, that cautions taxpayers that some payment platforms may have already geared up for the rule to apply and Forms 1099-K might be issued for 2022 transactions under the new rule, even with the deferral. I expect that shouldn't be an issue for PayPal.
3. As @sndmn11 and others have pointed out, the form of payment matters as to whether this reporting rule is applicable. But the form of payment doesn't change whether you have income or not (see #1).
4. Keep good records, but if you can't find a receipt, there may be a solution (go to the IRS Q&A in one of the threads below).
5. It would be great if Congress changed this rule, but I could say that about a lot of things, especially things that are far more important. But I have little hope.
6. I'm pretty confident that TurboTax will be sufficient.

FWIW - here are other relatively recent threads in which most of the above have been covered:

IRS Delayed the 1099 600$ rule for one year. See article

https://www.dailymail.co.uk/news/article-11570271/IRS-delays-criticized-new-tax-rule-hustles-600.html At least we have another year to buy and sell gear. its a damn shame this is what our country has resorted too. Hoping a new Administration will throw this crap out.

rokslide.com

Don’t forget to report your classified sales to the IRS!

https://www.forbes.com/advisor/taxes/cash-apps-to-report-payments-of-600-or-more/ This is going to be a mess. I hate checks and money orders but it seems like the best options unless you want to keep all receipts and report sales as a loss.

rokslide.com

So, money orders.

Looks like money orders are going to become more common. I have never sent or received one but I have been told by my wife that they are one of the most common fraudulent forms of payment. She managed one of those cash advance places and they wouldn't even cash them. Is it wise to ask for a...

rokslide.com

Does the reporting apply to gifted money via f/f PayPal or Venmo?

 

[Kimber7man]

Does the reporting apply to gifted money via f/f PayPal or Venmo?

Not from what I've seen. Only goods and services.

 

[sndmn11]

Not from what I've seen. Only goods and services.

That's what I thought.

 

[roadrunner]

You trade money for a good, then later on trade that good for money at a depreciated rate. Paying a tax on money you already paid a tax on.

And people are good with that in the name of the law.

BS!