Received a 1099-K - Didn't meet thresholds? (MA/VT)

[Dunroamin3]

$1700 in ebay sales for the year and 52 transactions...

Why the 1099-k...both are WAY below the thresholds...any thoughts...not a busuiness...just and individual

[Whac-A-Mole]

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wrote:

Hello sweet_melody.
About Massachusetts amended the tax law is OK!
But I m not agree with federal tax values. I m not fit into any options (20k or200 transations) to generate this tax.

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the 1099k goes to IRS,states could have received some information as well.

I know this is the case with K1.

[sweet_melody]

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wrote:

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wrote:

Hello sweet_melody.
About Massachusetts amended the tax law is OK!
But I m not agree with federal tax values. I m not fit into any options (20k or200 transations) to generate this tax.

---

the 1099k goes to IRS,states could have received some information as well.

I know this is the case with K1.

Whack-a-mole,

The 1099-K is NOT sent to the IRS (Federal) by PayPal.  Only two State Tax Departments are receiving notification of the earnings if the amount is at least $600 - Vermont and Massachusetts.

I was given this information by a PayPal representative and I then verified it with my State Tax Dept.   It's also readily available by Googling 'PayPal 1099-K' .

I received the 1099-K and it might appear confusing because the form states that it's reported to the IRS.  However, according to a PayPal representative, that form is ONLY sent to the two states mentioned.  PayPal didn't have adequate notice to be able to provide new forms to address the sudden change so they sent out what they had available.  (The change to a lowered threshold happened in the middle of December and was made retroactive to January 2017.)

The IRS (Federal) is not interested in changing the tax code regarding the $20,000 + 200 transactions criteria followed by third party processors at this time.  The change in reporting is only for the states of Vermont and Massachusetts (for now).

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[Heatherfeather0]

I am in the same boat and trying to find it is reported to the IRS as well After reading your comments, I feel better because it is not required on the federal level But how do you report it on your taxes State only ?

[prezdrovini]

Sweet Melody I called the Federal Irs they said that I am responsible to file on my federal return if I received a 1099k and were over the item count. I am far under the 20k but 3 items over on the items due to the way Paypal computes their numbers, the box 3 includes non taxable credits, coupon cabin rebates, refunds to Ebay buyers, and fit bit achievement credit.  I would be delighted if I did not have to file the 1099K with the Federal government where do you find out that the 1099K was not going to the federal government just to MA?

[Whac-A-Mole]

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wrote:

Hello sweet_melody.
About Massachusetts amended the tax law is OK!
But I m not agree with federal tax values. I m not fit into any options (20k or200 transations) to generate this tax.

---

The 1099k just lists what you have received,it does not say you have tax owed,it is up to you to do the reporting

[sweet_melody]

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wrote:

Hello sweet_melody.
About Massachusetts amended the tax law is OK!
But I m not agree with federal tax values. I m not fit into any options (20k or200 transations) to generate this tax.

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Hi SRVSL,

The 1099-K is not reported to the IRS (Federal).  It is only reported to the State Tax Depts of Vermont/Massachusetts.  Even just one transaction is reported to these two states if the value is $600 or more.

Check with your accountant for more information.  It's not a tax bill.  It's just letting you know that the amount has been reported to the State Tax Dept.

Hope this helps.

[wingsneck]

Massachusetts passed a last minute tax law requiring third party payments over $600 for goods and services be reported on the 1099-K and made the law retroactive to the beginning of the tax year (2017).  Since this is now reportable income for Mass residents, you will want to capture it on your tax returns, realistically both Federal and State via a schedule C.  The schedule C will allow for you to offset the income with expenses, postage, ebay fees, paypal fees, mileage, office and shipping supplies, advertising, internet fees, cellphone expense.  Realistically small time operations may show losses since the cost of doing business can exceed the revenues reported.  I can't help but think that this could back fire on the state, business losses trickle down to taxable income which means less $$  for the state!

[Lynx11]

Hello, I need help. I just got form 1099-K for 4852.26 and 10 transactions from PayPal. I sold only used personal items on eBay during 2017 and I'm not a business. How can I explain IRS that I got 0 profit from these transactions. I do know that PayPal should send the form only above 20K and 200 transactions, but it looks like they have not very smart  noways. I think they already reported me to IRS and I have to proof that I didn't earn a penny from the transactions. 

Thanks for any help.

[sweet_melody]

If you reside in Vermont or Massachusetts, a 1099-K has been issued to anyone who received total payouts of $600 and above for 2017 due to an end of year (Dec/2017) change to the tax laws in those states that became retroactive to January 2017. 

It doesn't matter whether the $600 threshold was reached in a hundred transactions or only one single sale!  The dollar amount ($600) is what now  triggers the issuance of the 1099-K in these two states.

Although it's printed on a form that says it's being sent to the IRS (Federal), this isn't true according to a customer service representative I spoke with just hours ago.  It was the only form that they had available because PayPal was taken by surprise with this new tax law also.   It is only reported to the state tax department - not the IRS (fed).

If you Google for information (PayPal 1099-K), you'll be able to read all about it.  It's a move to help close the financial gaps in these states and other states are expected to follow this path.

A bit of transparency would have been appreciated by Vt and Mass tax departments but no...everyone who met the $600 cap was taken by surprise. 

Hope this helps.

[chappy21]

My problem is that Pay Pal included my rebates from Mr. Rebates and Ebates, putting me over the $600 threshold for Massachusetts. The new MA law specifically says for sales only.