1099-K REALLY?????

buffalorider
Contributor
Contributor

So, I started selling on eBay as a hobby to fund some off road racing I do and was convinced I "needed" an eBay store. That resulted in me selling more items and thus accepting more payments through PayPal. This was still considered a hobby of mine even though I had a "store" online so that I could list more items. I buy old junk off-road motorcycles (instead of people taking them to the salvage yard) and I sell some of the good used parts. This "activity" has now resulted in a damn 1099-K for the IRS. Why in God's name they have any right to money from the hard work I have put in to my hobby is beyond me. So....main question is what are some of you doing to curb getting this "new" 1099-K form sent to you. Should I limit the number of transactions? SHould I watch the total sales coming in and try to stay under the 20K amount? Would you close your eBay store and only sell the minimum number of items? Or would you go full out and start an actual on line business thus keeping tract of all your expenses, putting vehicles into service, writing off part of your property you use for the businss, etc etc on and on??? This was a hobby and I would like to keep it that way. Because I was not prepared for this new 1099, I did not keep tract of expenses during 2017. I guess I can try to figure out some of them but this whole this is a huge pain in my **bleep**.

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12 REPLIES 12

lgwhite
Contributor
Contributor

I recently cleaned out my closet!  A lot, and sold about $11,000 worth of high end clothes and bags.  The sales tax has already been paid by me on all the items that i purchased - so why would you need to report sales tax again and i am not charging the person who buys a used item of clothing sales tax.  I have not made $20,000 yet, so unsure why they are asking for my SS number to send me a 1099.

 

Any ideas?  I do not have  a store - just cleaning out things i would normally take to a consignment shop or put in a yard sale.  Yard Sale people don't have to worry about a 1099 and consignment shops do not send you a 1099 either. Although consignment shops collect sales tax on the item again when they resale it.

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SeanCass
Contributor
Contributor
Where I live you are technically supposed to collect state sales tax on anything you sell, even from a yard sale. Of course I would be surprised if anyone does. But when you sell on Ebay there is an electronic record of your sales, unlike a yard sale. You are also supposed to claim all income when you file your state and federal taxes. As far as not reaching the $20,000 mark, are you sure? Did you subtract shipping, Ebay, and PayPal fees to reach that amount? If $11,000 was your profit only, you could pass the $20,000 mark once you add all the fees and shipping costs that you paid out.
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Teslafan101
Frequent Contributor
Frequent Contributor

if you have collected $11k so far(do you charge shipping>),you could meet or exceed 200 transactions and $20k by the end of the year,and PAYPAL usually ask for your SSN when it comes close to that threshold.

ALSO Paypal has a rule now,if you do not add SSN to your Paypal account,you cannot spend that $$ sitting in your account or send it to someone,you can only download to your bank account.

as for collecting sales tax,states are desperate for $$,MORE AND more states are asking Ebay/AMZN/ETSY to collect sales tax for them,so ?? 

For out of state buyers,Ebay will charge sales tax for yo and remit to the states,you dont get to keep it,but for fellow state resident,you should ask Ebay to calculate and charge sales tax,you get to keep it and remit to your state at the end of the year  

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