Well, I got the 1099-k from PayPal

[540-Virginian]

I sold my bow and accessories last year so have a form saying $1,450 in sales. Anyone know if I still have to include it on my return this year? I know they delayed the new $600 threshold. Ive never gotten a 1099-k.

Curious what others are doing. Not taking tax advice obvi.

 

[GoatPackr]

I would definitely include it especially if you have original receipts and you sold at a loss.

 

[def90]

The IRS has postponed this until next year.. if you didn't profit off the sale vs what you paid for it it's not income anyway.

I guess they haven't met the 80,000 new hires target yet.

 

[tdhanses]

The $600 threshold has been a law/rule for many many years, the IRS postponed only the requirement to send a 1099 for last year, this doesn’t mean they can’t send a 1099.

You need to fill out the correct schedule showing your costs offset against that on your return, if you made a profit you’ll get taxed.

So much confusion surrounding this, the only thing the ruling did was require online payment providers to track rev and help the gov collect money on an existing rule, which is now not a requirement until next year for the payment providers.

Best bet is talk to your tax guy or read the instructions on how to file for the 1099-k and what forum to include showing your costs.

 

[sneaky]

If you sold at a loss they can freaking pound sand. Receipts are your friend.

Sent from my SM-G955U using Tapatalk

 

[doc holiday13]

A friend of mine got one of those a few years back and they just left it off their taxes.

 

[sneaky]

Anyone seen the little disclaimer from PayPal that if your tax ID on file doesn't match up they'll automatically withhold 24% of the transaction and you'll have to claim it on your taxes? I hope they go broke.

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[Valsport]

Don't accept G&S problem solved.

 

[fwafwow]

I agree with much of this.

The $600 threshold has been a law/rule for many many years, the IRS postponed only the requirement to send a 1099 for last year, this doesn’t mean they can’t send a 1099.

No, yes and yes. The $600 reporting threshold for the 1099-K is new in this context - it used to be $20k and more than 200 transactions a year. The IRS did postpone the new $600 requirement with respect to 2022, but you are right that it doesn't mean they can't send a 1099-K - which appears to have been the case for the OP.

You need to fill out the correct schedule showing your costs offset against that on your return, if you made a profit you’ll get taxed.

Correct. So not doing anything for this sale would not IMHO be wise.

So much confusion surrounding this, the only thing the ruling did was require online payment providers to track rev and help the gov collect money on an existing rule, which is now not a requirement until next year for the payment providers.

Best bet is talk to your tax guy or read the instructions on how to file for the 1099-k and what forum to include showing your costs.

You could also start with TurboTax (or a similar program). I've already filed my taxes, but I went back into the program pretending that I was amending the return to add two Forms 1099-K. The questions are pretty straight forward, but I did need to use the "search" function for directions on where to put in the basis.

I entered two fake 1099-K entries - both for large numbers, and chose "Personal item sales" for each after entering the dollar amounts. One one I chose "All items were sold for a loss or no gain" and that 1099-K seems to have been ignored for the rest of the tax calculation (I didn't dig into schedules). The other I answered "I sold some items at a loss or had no gain" and then had to manually go find another page and enter in the amount I paid for the items, dates acquired and sold, and since I showed I paid almost nothing for the items, my income and tax bill did go up.

 

[tdhanses]

I agree with much of this.

No, yes and yes. The $600 reporting threshold for the 1099-K is new in this context - it used to be $20k and more than 200 transactions a year. The IRS did postpone the new $600 requirement with respect to 2022, but you are right that it doesn't mean they can't send a 1099-K - which appears to have been the case for the OP.

Correct. So not doing anything for this sale would not IMHO be wise.

You could also start with TurboTax (or a similar program). I've already filed my taxes, but I went back into the program pretending that I was amending the return to add two Forms 1099-K. The questions are pretty straight forward, but I did need to use the "search" function for directions on where to put in the basis.

I entered two fake 1099-K entries - both for large numbers, and chose "Personal item sales" for each after entering the dollar amounts. One one I chose "All items were sold for a loss or no gain" and that 1099-K seems to have been ignored for the rest of the tax calculation (I didn't dig into schedules). The other I answered "I sold some items at a loss or had no gain" and then had to manually go find another page and enter in the amount I paid for the items, dates acquired and sold, and since I showed I paid almost nothing for the items, my income and tax bill did go up.

The $600 rule previously was on the honor system if you made any income from transactions over this amount and were paid in cash and didn’t get a 1099, no one followed it, hence they found a way to find some of it with the new rule going after these online payment vendors and the 1099-k. Correct the old 1099 rule in this instance was $20k+ or the set amount of transactions. But the IRS has always had a self reporting requirement for any income, 1099 or not.

 

[fwafwow]

The $600 rule previously was on the honor system if you made any income from transactions over this amount and were paid in cash and didn’t get a 1099, no one followed it, hence they found a way to find some of it with the new rule going after these online payment vendors and the 1099-k. Correct the old 1099 rule in this instance was $20k+ or the set amount of transactions. But the IRS has always had a self reporting requirement for any income, 1099 or not.

I totally agree with the last two sentences. I'm lost on the first, but not a big deal.

I am not surprised that the complexity is apparently eliminated with software.

 

[tdhanses]

I totally agree with the last two sentences. I'm lost on the first, but not a big deal.

I am not surprised that the complexity is apparently eliminated with software.

Oh just that in theory a 1099 was supposed to be issued for any income made over $600, for a company to include it as a deductible expense they need to show they provided a 1099 for these so not really on base with this.

 

[BDWMT]

I think they call this a bait and switch. “No one making under $400k will pay more taxes”. The catch is you have to be able to provide that receipt from 1998 when you purchased that piece of gear and now sold for a loss. No receipt and you pay taxes as if it is income.

 

[fwafwow]

I think they call this a bait and switch. “No one making under $400k will pay more taxes”. The catch is you have to be able to provide that receipt from 1998 when you purchased that piece of gear and now sold for a loss. No receipt and you pay taxes as if it is income.

FWIW, TurboTax doesn't ask for receipts, although having them in an audit would help. But I wouldn't lose sleep over it.

 

[BDWMT]

FWIW, TurboTax doesn't ask for receipts, although having them in an audit would help. But I wouldn't lose sleep over it.

You never need receipts until you are audited…

Maybe that’s what the 87,000 new agents will be helping with. Wait, they are only auditing people that make more than $400k… or is that just another bait and switch…. Starting to see a pattern in the bulls!t promises.

 

[fmyth]

If they sent a 1099 to you they sent a copy to the IRS. Not including that 1099 you received on your taxes is a good way to get audited. I have been audited. It will cause you a ton of stress and time. They will find something you did incorrectly in the audit and you will be fined heavily and you will pay interest on the adjusted amount that you owe the IRS after the audit.

 

[Maki35]

I sold my bow and accessories last year so have a form saying $1,450 in sales. Anyone know if I still have to include it on my return this year? I know they delayed the new $600 threshold. Ive never gotten a 1099-k.

Curious what others are doing. Not taking tax advice obvi.

Go to your seller's hub. under the "payment" icon there's a tab for "taxes". Click the "taxes" icon and it will show if you have a "Form 1099-K" ebay statement. If there is one, print it and file it with your tax return.

 

[fwafwow]

Go to your seller's hub. under the "payment" icon there's a tab for "taxes". Click the "taxes" icon and it will show if you have a "Form 1099-K" ebay statement. If there is one, print it and file it with your tax return.

It’s more complicated than that for filing - as specified above. I don’t think you merely file it with the return - especially if you are filing electronically.

 

[Rokwiia]

There are several issues here:

1) In many states there are the "casual sales" rule where you must file a form and pay sales tax to the state if it is above a certain threshold amount. In my state, if the sales(s) is $600 or more for the year, you need to file and pay sales tax on the full amount.

2) You got a 1099-K so I'd report the proceeds on your return along with your cost basis. If sold at a loss, I'd report $1,450 on Schedule 1, lines 8(z) and 24(z). If you sold it at a gain, I would report it on Form 8949 and Schedule D, Capital Gains. This treatment is spelled out in IRS Fact Sheet 2022-41, Question 3.

https://www.irs.gov/pub/taxpros/fs-2022-41.pdf

3) People with glass houses shouldn't throw stones. If you have an existing "issue" on your tax return and choose to ignore reporting the $1,450 sale(s) related to the 1099-K, you're opening your front door and inviting the IRS to come in. Report the sales properly.

 

[ThumbsMcGee]

I’m not up to date on all this, but most likely you didn’t sell it as a profit. If sold at a loss, do you have to report it?