New Ebay Tax Requirement/Form For 2022 - USA Sellers

This is probably old news for the professionals out there, but it could have a HUGE impact for "hobby" sellers:

https://community.ebay.com/t5/Annou...a-p/32556521

Bottom line - before 2022, you didn't receive a 1099-K tax form unless you had 200 sales of at least $20,000 (in most cases). Now you get one for $600 in gross sales in 2022...

Happy New Year!

John

The reporting is new. The requirement to report the income from eBay, PayPal, etc. is not. People were supposed to be reporting it all along, but since most did not, the powers that be decided "OK, have it your way: instead of $20,000 being the reporting threshold, let's make it $600. Kthksbai!"

Back in the 1980s, 1990s, and 2000s many brick and mortar stores were being pressured by two local competitors; 'flea markets' and 'Big Box' stores. Flea market sellers dodged taxes by being ephemeral and Big Box stores crushed smaller mom and pop stores with economy of scale. Many states slowly caught up to the flea market tax dodge and began to send tax agents into these market places and forced sellers to get legitimate and collect taxes. Now we are seeing the same thing for online sellers, the tax man is coming and the tax vacation is just about over.

If folks do not like paying taxes, they need to pressure their elected officials. In my own opinion, I think that collecting taxes multiple times (first time when item was originally sold) is lame and that 'used' items should be exempt. But my opinion does not matter, the only way to change the tax landscape is if enough voters bring pressure to the politicians.
Don

And just to be clear, the requirement is not limited to Ebay:




https://www.cnet.com/personal-finan...nmo-in-2022/

My boss had this problem forty years ago - we paid VAT on sales, but, because we bought records from the public, we had no countervailing VAT payment to offset against our own tax. His response was to set up a crazily complex arrangement whereby a new company was established every two or three days when we approached the VAT threshold. I doubt whether tax authorities would exempt second-hand goods - it would be too readily open to abuse.

All great points of discussion...

I know this has impacted me. I have closed my store and will shut down completely before I hit the new limit. Not a business by any stretch of the imagination. I use eBay sales to get rid of duplicate/unwanted items, and to fund new purchases. I would imagine there are many hobby sellers in the same boat. No knowledge of detailed accounting (how does one even do this in philately?) or any desire to add another layer to my tax burden. There is a difference between this and evasion, because evasion implies some kind of profit...

The time-honored tradition of buying a lot, taking out what you need or want, and selling the remainder to break even or even make a bit is now problematic, at best.

John

I am thinking that I might try bartering instead of selling.

I would be willing to trade my White Privilege Card for stamps if anyone is interested. It's a little over 63 years old, but in 'like new' condition. It has never been used, I want to trade it because it's not done me any good; no free college, no get out of jail free, no free food, no free medical insurance, no free housing. Contact me off board if anyone would like to trade some stamps for this card.
Don

Edit: Note to the humorless, the above is me making a joke. But the point of this post is that humans will be humans and many are already figuring out ways to dodge these taxes. Bartering might be a solution. Will some sellers give up trying to build faithful clients and start new multiple eBay accounts? I assume that this will drive many sellers to change how they handle their tax return each year, now accumulating all their costs and writing them off to offset the income. The reason our tax laws are so complex is due to stuff like this; a flat tax would be so much better for our country in my opinion. Time to start declaring the 'stamp room' as a 'stamp sales office' and writing off its costs.

Don, while meant in humor, I can actually foresee a time in this country where tax rates are different depending on your race, gender, or sexual orientation, just as there currently are for marital status. It's a natural progression of the last 10 years...

Well, tax rates are already different for some Mar-a-Lago residents, who don't pay any.

This could be great for traditional dealers and venues such as Cherrystone's online stamp store because the new requirement does not apply to debit and credit cards and of course cash/checks. It is "digital app" centric.

Bartering stamps would be most awesome. Of course as soon as it became large and organized the tax man would focus on reporting your trades.

To be accurate, the rates are the same, but the loopholes that the uber-wealthy (of ANY political ideology) have available to them are much more numerous than those available to the peasants. Do you think a certain Speaker of the House doesn't avail herself of the same tax advantages that the Evil Orange Man (tm) does?

Most intelligent people use the tax laws to their advantage. If anyone has an issue with 'who pays what taxes' the correct focus would be with the politicians who write the tax laws (which in the US is the Congress).
Don

Yep. "Don't hate the player, hate the game."

Oh, no - another poster from the common sense agenda!

John

Pay taxes ????? My situation is the purchasing of stamps far excesses the selling . I will always be buying more than my sales .