PayPal 1099-K Tips for $600 Rule

[TSU_Archer]

Attention fellow members.

I recently got done with my CPA for this years taxes and asked what would be the best course of action with any Goods/Service transactions for the 2023 year to prep for next years Tax season since the IRS intends to fully proceed with the $600 P2P 1099-K next year. Luckily they decided to put it off for the ‘22 Tax season. Was told some might still receive a 1099-k but as for it being a blanket mandatory rule resetting the amount to $600. That will be next year.

She said to prove it was a transaction that was for a sold item under Goods/Services, for which you can claim a loss and not an actual Good or Service. You will need to have the buyer add an accurate description of the item or something that can easily be used to match to a receipt or proof of item sold.

In other words, I would recommend making absolute sure your buyers who opt to continue using PayPal Goods/Services to alway add an accurate description of item(s).

Granted this will be a tad challenging considering some items might raise red flags with PayPal due to their super aggressive rules on certain items. So what I was going to personally do was insure the buyer is in agreement to message back me with the reference number of the transaction and an accurate description or a screenshot of the PayPal Transaction and a description. Thus giving me something on file to take one more transaction adding up to $600 off of a potential 1099-K.


Granted some here might be more well versed in Tax or a CPA themselves and possibly know or heard something else. This is just what I was informed on and we have been working with this CPA for years. She has been a CPA for nearly 30 years and also owns a small kennel business that utilizes P2P transactions such as PayPal. I would imagine the information given is pretty sound.

Hope this helps and any extra input anyone can share I am sure would further help.

I am just insuring once this silly rule goes full steam ahead that the scum bag IRS can’t double dip on me for a bow or pair of binos I already paid tax on.

Cheers!

 

[Hunt_Jefferson]

Make sure you are 100% abiding by PayPal’s terms of service if you are going to require detailed descriptions. The TOS states they can freeze your account and charge you $2,500 per infraction if they deem what you sell to violate their policy. So if you sell two knives they will ding you for $5,000. I closed my PayPal account instead.

Acceptable Use Policy

Acceptable Use Policy

www.paypal.com

And:

• If you are a seller and receive funds for transactions that violate the Acceptable Use Policy and said violation is associated with fraud or the sale of goods that are counterfeit or otherwise infringe on intellectual property rights, then in addition to being subject to the above actions you will be liable to PayPal for the amount of PayPal’s damages caused by said violation. You acknowledge and agree that $2,500.00 U.S. dollars per violation is presently a reasonable minimum estimate of PayPal’s actual damages - including, but not limited to, internal administrative costs incurred by PayPal to monitor and track violations, damage to PayPal’s brand and reputation, and penalties imposed upon PayPal by its business partners resulting from said violation associated with fraud or the sale of goods that are counterfeit or otherwise infringe on intellectual property rights - considering all currently existing circumstances, including the relationship of the sum to the range of harm to PayPal that reasonably could be anticipated because, due to the nature of the violation, actual damages would be impractical or extremely difficult to calculate. PayPal may deduct such damages directly from any existing balance in any PayPal account you control.

 

[hicountry1]

Closed mine also.

PayPal went woke

 

[TSU_Archer]

Closed mine also.

PayPal went woke

Yeah I’m about to after I get through a series of classifieds I have here and I elsewhere.

 

[realunlucky]

There is an entire other thread covering this.

Sent from my SM-G996U using Tapatalk

 

[#1antler]

Will this apply to eBay sales also?

 

[Ishisube]

...they can freeze your account and charge you $2,500 per infraction if they deem what you sell to violate their policy. So if you sell two knives they will ding you for $5,000. I closed my PayPal account instead.

They won't let you sell a knife????

 

[rodney482]

I closed my pp and venmo and find I buy less the stuff

 

[Freborg]

Thanks for the info. No Paypal in excess of $600 at a time for me. Curious, how the Gov't needs to know if any average citizen spends $600 and how the hell you got it. Yet simultaneously, has no concerns about how Jeffrey Epstein moved his money around or where it came from. I guess it's for my safety.

 

[UncleBone]

Thanks for the info. No Paypal in excess of $600 at a time for me. Curious, how the Gov't needs to know if any average citizen spends $600 and how the hell you got it. Yet simultaneously, has no concerns about how Jeffrey Epstein moved his money around or where it came from. I guess it's for my safety.

Pretty sure it is $600 in a year, not per transaction. I could be mistaken though.

 

[Freborg]

Pretty sure it is $600 in a year, not per transaction. I could be mistaken though.

You are right! Looked it up on IRS.gov. Good lord, it's even worse than I thought.

 

[Gutshotem]

Will this apply to eBay sales also?

Absolutely. I got a 1099-K from ebay sales and I didn't even hit the $600 mark in 2022.

 

[rileybassman]

They won't let you sell a knife????

I took this as regulated knives (autos etc.)

I have used paypal through DLT trading and blade HQ, for example... so I don't think that these vendors would use paypal if that was against their AUT?

 

[UncleBone]

You are right! Looked it up on IRS.gov. Good lord, it's even worse than I thought.

Those 87k new IRS agents are only meant for the top 1% though. Not to make sure you dont get $600 amd don't report it.

 

[AKBC]

I am sick of people cheating on their taxes. Tax cheats should be persecuted and publicly shamed.

I dont understand the issue here. If you buy something for $1,000, use it, and then sell for $800 and it gets reported on a 1099-K, you lost money and its easy to document. If you are making thousands buying stuff cheap and selling it on eBay for more, you owe a tax.

 

[UncleBone]

I am sick of people cheating on their taxes. Tax cheats should be persecuted and publicly shamed.

I dont understand the issue here. If you buy something for $1,000, use it, and then sell for $800 and it gets reported on a 1099-K, you lost money and its easy to document. If you are making thousands buying stuff cheap and selling it on eBay for more, you owe a tax.

The issue is the government sends hundreds of millions of dollars over seas for BS every year, and wastes even more on domestic garbage. They are not held accountable for spending American taxpayers dollars, they do not deserve any of it at all. Taxation is theft.

 

[UncleBone]

I am actually surprised to see someone who loves giving the government money.

 

[ID_Snow]

I’m not making a profit off any of my used gear on here, just trying to recoup some cost and make sure it gets used. Seems like I won’t have to pay any taxes…. What’s the problem? A form? If y’all are making this much money off Rokslide transactions, shouldn’t you be a paid sponsor?