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

[imarx]

"There will be no reporting to the IRS if you are beneath the 20k/200 transaction limit. So looks like the only taxes that need to be paid are state taxes."   Are you sure about that?  That seems like a bit of a gamble to me if Paypal has already generated the form.

[prezdrovini]

The problem with the 200 transaction limit is paypals reporting is bogus.  They include refunds to ebay buyers in that item total, I actually received a $10.00 reward from fitbit that they included in addition to 32 credits from coupon cabin for rebates.  Now I did 170 transactions with Ebay selling small items fast food toys from years ago and other items way below the amount for the Federal reporting of 20k, however now, because of Paypals gross numbers I am now liable to file State and Federal.  I understand being from MA you get **bleep** going over 600.00 so I was prepared for that after speaking to Paypal this weekend,....not before as they never disclosed any of this prior to 1.1.2017. Just found out on 2.3.18 when I received a 1099k and called Paypal.  I have argued back and forth with three calls back to Paypal trying to salvage not having to report to Federal because of rebates ...I asked them to adjust the number they will not, they said they report transactions in total, I said its not fair the way you are reporting bring me right over the 200 limit for rebates that had nothing to do with sales. They said I have program I can tell you did 170 for Ebay go by that, I said I cant go by that since the 1099k is now reported to the Federal government.  They have their speeches down pat its like speaking to a stepford wife they all say contact your accountant. I never had an accountant before and have now been on the phone all days with accountants that never heard of such a way to tally a 1099k with rebates.  So now the return I was suppose get will not be happening and I need to hire an accountant for a business filing of  a business that I do not have either.  This is shear insanity.  I will not use paypal nor ebay due to this gross negligence that they refuse to fix.  I have sent the issue to a class action attorney to review. 

[Temp20220712A]

In VT and just received one today also. Filed my taxes already. Keep me informed on class action suit please.

[USLEOINMASS]

i agree with you. better to be safe than sorry.

[prezdrovini]

Thank you for the information however the way paypal completes the box 3 number of payment transactions is not accurate.  This number put me at 203 as they include refunds, and coupon cabin payments for rebates that I received for purchasing a certain amount of goods from their site. So now I have a bogus inflated item count forcing me to report my 1099k to not only MA IRS but to Federal also.  It is total bogus what Paypal is doing to the item count so now I am liable to both when I shouldn't be liable to Federal.  In addition, I called an accountant which would charge me $500.00 to do my taxes due to this form. I never used an accountant before I always did my taxes now I am going from getting a thousand back to owing the government and to have to pay an accountant to now produce my tax forms.  This is so unbelievable and wrong.  I am done with Ebay and Paypal. 

[USLEOINMASS]

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wrote:
I am also from MA and just received mine today as well. I had no idea this would happen. And like others I just sold household things that I already paid tax on when I bought them. I lookin further into the law, this is a MA requirement for the $600 and above. There will be no reporting to the IRS if you are beneath the 20k/200 transaction limit. So looks like the only taxes that need to be paid are state taxes. https://www.mass.gov/technical-information-release/tir-17-11-new-massachusetts-reporting-requirement...

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do you really want to take the word from the state of Mass? Look what they have done to us all thus far. I would not believe anything they say. My tax guys says all 1099-K forms go to the IRS. better to be safe than sorry and report it to the IRS with a schedule C

[USLEOINMASS]

I TOTALLY AGREE. why isnt this illegal? How can the state of mass do this and at the end of the 2017 year?

. the only question no one can 100% for sure answer is if paypal sent this 1099-K to the IRS? everyone is saying no but how can you tell for sure. i called paypal 3 times yesterday inquiring and all 3 different people stated, ' we cannot answer your questions, please refer to your tax accountant." so i find it hard to believe that some members on here are saying that a paypal rep gave them definitive answers.

My tax guy says that ALL 1099-K forms go the the IRS regardless of what everyone is saying. If you dont add the income on your federal return then you are just asking for trouble. worst case scenario is to do a schedule C and reduce the gross amount.

Im in the same boat as you guys. I sold some stuff on ebay for less than i paid for it and with the ebay fees, paypal fees, shipping and supplies i definitely took a loss.

[LMH13]

Thank you for this, it was helpful, I am trying to figure out how to handle this with my SSDI now.

[sdolen]

So I take it this is a Taxachusetts problem and not Paypal's fault per say, but there needed to be some for of communication regarding this.

I've completed and filed my taxes already.  I'm not a business, so having to file like a business is ridiculous.  I just happen to have expensive hobbies.  I don't sell for profit, I'd say every transaction they reported I lost money on. 

I guess if MA wants to audit me to collect less than $100, it's their dime.   I'm not really sure how to proceed.

[Semi888]

All that I did was sell old jackets from my closet and some other old household items. It totalled about 3000 apparently. Yet, I paid much more than that to begin with. Does this mean that I will be taxed on those sales as income? This is rediculous, I have never had to deal with this before from privately selling one of my used items.