Lower IRS Reporting Threshold In Stimulus Bill-Impact To E-Commerce

Firstly, this is NOT a political post. I read this article and thought it would be of interest to those who sell goods online. I think this will lead less to less selection/availability of material on e-commerce websites as smaller sellers will be discouraged from selling online.

https://www.forbes.com/sites/lizfar...72711f793805

Yours is not a political post it is a post regarding changes to tax law contained in a federal law signed last week. That said, what is appropriate to the audience is a bit buried so I quote from the article to show it is worth reading:

"The change means that starting with tax season in 2023, ... and entrepreneurs who sell goods at places like Etsy and ebay will receive a 1099-K for any income they received via credit card or other third party payment services when that annual income totals at least $600."

Previously a minimum number of transactions was required, the minimum has been eliminated, while the $20,000 threshold is reduced 97%. Oh let me spell something else out, "other third party payment services" can be spelled PayPal.

Fair Warning....
The issue is not politics, the issue is the personal attacks and other divisive crap that inevitably comes after a thread overlaps with a political topic. The 'test' is simple, if what you type is a talking point for one of the tribes then it is going to get removed.

We work to keep things friendly and family-based in the community. We do not mind dealing with something but we have better things to do then babysitting for those who would rather create political drama by reagitating their political party's talking points.

So in my opinion the two posts above are fine, but this thread is at 'high risk' for going south. I implore folks to not introduce partisan opinions.
Don

I'm not au fait with US taxation. Is this an income or sales tax? Can the seller's costs be offset against it?

GeoffHa and all,

Yep, this is a messy tax question better discuessed elsewhere. 1099-K reflects gross income which is only a part of the calculation as to what is the your taxable amount. Your costs are deductable from your gross but the devil is in the details documenting and reporting these facts.

Thanks for sharing. $600 obviously is meant to impose Federal tax on most sales on ebay and other such platforms by all than the casual seller. IMHO it will have an impact on ebay overall. The veteran large sellers already triggered the reporting requirement and should not be bothered much unless there are a lot more tax changes buried within the Bill. Many others will be scared away. I do not see imposing new tax requirements as very "stimulating" to most people but what do I know.

Watch for reporting requirements for auction proceeds from traditional auction houses. (unless you self-report already)

Geoffha, it is about income tax not sales tax. [Sales tax rules change last year for those selling and buying on ebay due to a ruling on sales tax collection on internet sales made by the Supreme Court of the United States https://www.supremecourt.gov/opinio...494_j4el.pdf .]

What a 1099-K does is tell the US Government you the seller made this much money. Now the US Government will assume it is all taxable income, if you live in the USA or are a citizen of the USA living abroad, unless you file a US tax return showing all or part of the money is not to be considered taxable income for certain reasons. E.g. for a simple example if $1000 is reported but you spend $500 to buy at wholesale what you sell and it costs you $100 to package and ship the items, you have just shown the taxable portion of the $1000 is just $400 [$1000-($500+$100) = $400]. Beyond that, that is why people can make a good living as tax professionals, taxes are not always simple.

Thank you, everyone. The use of individual tax returns is far less common in the UK than the US. Whilst the tax authorities here have, I think, rules on when income from ebay etc sales should be declared, I think they've shied away from going too deeply into this world, perhaps because of the logistical complexities.

Geoffha, now that you indicated your location, the 1099-K income issue is not your issue.

That said the sales tax changes in the USA are your issue indirectly. If a buyer of your or anyone's material is delivered to a USA registered ebay user address, and that address location requires ebay to collect sales tax it does. It does not matter if I buy from a seller down the street, across town, in another county, state, or foreign country, the buyer pays sales tax charged by ebay on top of your selling and shipping price. Before the court decision, sales tax was not charged.

How does that affect you? If your item is worth 25 dollars or pounds, not only must I consider the 2 dollars or pounds shipping I also have to allow for another 1 dollar or pound for sales tax. Thus I now bid only 22 not 23 + 2 shipping like before; I still pay 25 but you get one less and the tax man gets that from me.

I was asking out of general, rather than personal, interest. If Americans bid on my items (which is quite rarely), I usually remind them of GST when they enquire about postage costs. This year sees VAT added to ebay transactions with the EU and, I think, within the EU, and the UK's exemption from duty for items of <£15 has also gone.

The

had it covered:

One, two, three, four, one, two
Let me tell you how it will be
There's one for you, nineteen for me
'Cause I'm the taxman, yeah, I'm the taxman
Should five per cent appear too small
Be thankful I don't take it all
'Cause I'm the taxman, yeah, I'm the taxman
If you drive a car, I'll tax the street
If you try to sit, I'll tax your seat
If you get too cold, I'll tax the heat
If you take a walk, I'll tax your feet
'Cause I'm the taxman, yeah, I'm the taxman
Don't ask me what I want it for
(Ah ah, Mr. Wilson)
If you don't want to pay some more
(Ah ah, Mr. Heath)
'Cause I'm the taxman, yeah, I'm the taxman
Now my advice for those who die (taxman!)
Declare the pennies on your eyes (taxman!)
'Cause I'm the taxman, yeah, I'm the taxman
And you're working for no one but me (taxman!)