I see a big Craigslist boom incoming!
New ebay payments require SS#?
I received an email from ebay and they now will deposit your amount from a sale directly into your bank account. So, they require your routing and account numbers. But they also required my SS number, which I'm not sure I like. They say the purpose is to comply with government regulations. Is there any reason to think they would transmit the amount of your sales to the irs and issue you a 1099? I only occasionally sell used items on ebay and don't consider any amount I receive to be taxable income. Thoughts?
Showing 14 responses by mtrot
@stereo5 Well, ebay sending out a 1099 and reporting it to the IRS is what I was concerned about. For people who only occasionally sell a used item that they may have owned for a decade or more, I don’t see how that should be taxable income. Now, if you run a business on ebay and support yourself that way, I can see how it might be taxable income. The IRS would not be sending out 1099 forms. Rather, it would be ebay that would send the 1099. How do you know that ebay plans to do this, and do you have a link? |
It looks like there is a threshold, currently $20,000, beyond which platforms such as ebay are required to send you a 1099 form. But, starting in 2022, the threshold will drop to $600. It looks like the earliest you would receive a 1099 form for sales over $600 will be in early 2023. And you will have to account for any payments over the $600 threshold on your tax return, although you may not owe taxes on it. But still, I'm not interested in the hassle of having to fool with that. https://www.cnbc.com/2021/03/26/its-going-to-get-harder-to-avoid-telling-the-irs-about-income-from-o... |
@theo In that scenario, you would not owe income tax. Even if you go over the threshold for receiving a 1099, it does not necessarily mean you owe taxes on anything. It depends on the situation. If you operate on ebay as a business, then you might. Or if you sell something that significantly appreciated in value during the time you owned it, you might owe tax on the appreciated value. That's the way I understand it. |
@fuzztone The problem is, I don't know if other families are similar, but in my family, we send each other money via paypal, back and forth, for various occasions, i.e., birthdays, Christmas, Mother's Day, etc. So, basically, we are sending money back and forth to each other, such that we don't really net anything from it. But I guess it's possible that one of us might receive over $600 in one year. Why should anyone in that circumstance have to explain anything on their tax return? |
@8th-note Thanks for that helpful information. One problem I see is that some people selling their used audio equipment may have owned the equipment for decades and have no idea where the original receipt is, nor may they remember exactly how much they paid for it. They may even have paid cash for it, and no receipt was involved. Some of this gear may be worth quite a bit of money, but why should they owe any income tax on it? Also, what about items that you inherited? If you inherit an expensive piece of audio gear and have no use for it, why should you owe income tax on any sales proceeds from it? And you would not have purchased it and received a receipt, either. |
Well, according to this, the Dems are changing the reporting threshold to $10,000. I wonder if that will mean online selling sites like eBay will not be sending you and the IRS a 1099 form for sales over $600? I, from time to time, sell some item of audio gear for well more than $600, and I don't consider that to be income at all, since I not only paid taxes when I bought it and usually sell it for less than what I paid. https://justthenews.com/nation/economy/democrats-pare-down-treasurys-irs-bank-reporting-plan-raise-t... |