New Tax Law Hidden In COVID Relief Bill Will Crush eBay/Paypal Sellers (1 Viewer)

[ReallyGoodUsername]

The amount of money the IRS is going to rake in from those who did not keep records, don't understand the law, or just give up and pay the bill the IRS auto-sends them based on paypal/eBay etc reporting is going to be huge. The govt does not care about the legitimacy of these taxes, they have specifically targetted a new taxable income source that has no choice but to pay whatever the IRS says is owed.

I think the threshold is bullshit but just to be clear, this income has always been taxable, the only change is they lowered the reporting threshold. Think of it like if income received via a W-2 was only reported by your employer if it was above $20k and now it’s anything above $600.

 

[dajebriza]

I think the threshold is bullshit but just to be clear, this income has always been taxable, the only change is they lowered the reporting threshold. Think of it like if income received via a W-2 was only reported by your employer if it was above $20k and now it’s anything above $600.

True the income has always been taxable, *IF* it is legitimate profit income, many of which these types of transactions are not. What has significantly changed is the mandatory reporting and assumed taxes due to the IRS from all financial and sales platforms of ALL transactions in this category, that *could* be profit sales, regardless of whether they were or not, and the IRS assumption of taxes due on all of them in total. This 'guilty until you prove yourself innocent" approach to all these small transactions, many of the funds of which are really non-taxable as they are cost-basis or loss-sales, is a much more heavy-handed persecution approach of the IRS.

 

[FDLmold]

I guarantee this gets delayed again. No way Biden's IRS implements it for 2023 tax year, payable April 2024, which just happens to be in a presidential election year. Every Republican running for federal office would get to use "Democrats coming after your $600" in a campaign.

 

[ekricket]

I guarantee this gets delayed again. No way Biden's IRS implements it for 2023 tax year, payable April 2024, which just happens to be in a presidential election year. Every Republican running for federal office would get to use "Democrats coming after your $600" in a campaign.

Umm logic plays no part in this. Especially strategic planning logic. Just not there this go round.

 

[Budha]

I guarantee this gets delayed again. No way Biden's IRS implements it for 2023 tax year, payable April 2024, which just happens to be in a presidential election year. Every Republican running for federal office would get to use "Democrats coming after your $600" in a campaign.

I think you give the current administration too much credit and over estimate the critical thinking capacity of the American electorate - lol.

 

[FDLmold]

I think you give the current administration too much credit and over estimate the critical thinking capacity of the American electorate - lol.

Also possible.

 

[dajebriza]

I filed having received a tax 1099-K from eBay for my sales. What a scam this new tax law is. This new tax law is specifically designed to extract the maximum revenue from untaxable dollars by burying those untaxable dollars in complex tax reporting procedures that the average "yard seller" on eBay will never be able to navigate and thus, will be taxed at 100% of their sales, despite most of those funds should not be taxable because of cost basis of the sales.

Previously, tax reporting laws protected these yard sellers by keeping the reporting limits high enough that most of these sellers would never have to contend with tax reporting of their lower total sales. Business sellers with a high number of sales and high dollar amounts were always required to document and account for their sales and report them on their taxes. They already do this as a part of their normal business accounting. By lowering the reportable sales amount to a mere $600, this ensures most yard sellers now fall under the reportable category.

But to report your taxes accurately, you need to generate and file additional tax forms where you line-by-line account for every item sold, its cost and sales price to be able to get credit for any cost basis. Otherwise, absent these extra forms, the IRS will assess a 100% tax on all your sales. Yard sellers are not going to know or have records allowing them to file these additional forms or have business expenses they deduct to reduce tax burden. This means that once you enter the 1099-K data into your tax software, you will be assessed 100% tax on these sales. The IRS knows this, and this was the design of the law in its intent: to tax as many previously untaxed dollars as possible, regardless of if they should be taxed. The law has gone from an "assume you are exempt" for low-end sellers, to targetting them with a "prove you should not pay" philosophy. They are relying on the obscurity of the law and process complexity to force taxation of untaxable sales.

I think this is a result of our climbing national debt which is out of control and we will be seeing a lot more new legislation like this to extract more and more hidden tax dollars from the middle class. And if you think this is politically biased, I disagree. I think either party will do the same over the next few decades. Biden is doing so now with new proposed tax laws and Trump massively targeted the middle class for tax revenue and will do so again. They have no option, the debt demands it.

Advice: Chip sales should be either by check/money order or cash. Don't use paypal, etc or you will have to report the sales on your taxes and in order to not be taxed at 100% of the sale, account for everything sold individually. Oh, and by the way sales from "hobbys" according to the IRS are taxed at 100% now to try and close any loop holes, which technically, these sales of poker chips fall under, so the IRS will assess 100% tax on these sales anyway, if they were ever to audit any of these sales if you have cost-basis deducted them.

 

[LowerBama1714]

I filed having received a tax 1099-K from eBay for my sales. What a scam this new tax law is. This new tax law is specifically designed to extract the maximum revenue from untaxable dollars by burying those untaxable dollars in complex tax reporting procedures that the average "yard seller" on eBay will never be able to navigate and thus, will be taxed at 100% of their sales, despite most of those funds should not be taxable because of cost basis of the sales.

Previously, tax reporting laws protected these yard sellers by keeping the reporting limits high enough that most of these sellers would never have to contend with tax reporting of their lower total sales. Business sellers with a high number of sales and high dollar amounts were always required to document and account for their sales and report them on their taxes. They already do this as a part of their normal business accounting. By lowering the reportable sales amount to a mere $600, this ensures most yard sellers now fall under the reportable category.

But to report your taxes accurately, you need to generate and file additional tax forms where you line-by-line account for every item sold, its cost and sales price to be able to get credit for any cost basis. Otherwise, absent these extra forms, the IRS will assess a 100% tax on all your sales. Yard sellers are not going to know or have records allowing them to file these additional forms or have business expenses they deduct to reduce tax burden. This means that once you enter the 1099-K data into your tax software, you will be assessed 100% tax on these sales. The IRS knows this, and this was the design of the law in its intent: to tax as many previously untaxed dollars as possible, regardless of if they should be taxed. The law has gone from an "assume you are exempt" for low-end sellers, to targetting them with a "prove you should not pay" philosophy. They are relying on the obscurity of the law and process complexity to force taxation of untaxable sales.

I think this is a result of our climbing national debt which is out of control and we will be seeing a lot more new legislation like this to extract more and more hidden tax dollars from the middle class. And if you think this is politically biased, I disagree. I think any either party will do the same over the next few decades. Trump massively targeted the middle class for tax revenue and will do so again.

Move to politics thread?

 

[DMack]

I filed having received a tax 1099-K from eBay for my sales. What a scam this new tax law is. This new tax law is specifically designed to extract the maximum revenue from untaxable dollars by burying those untaxable dollars in complex tax reporting procedures that the average "yard seller" on eBay will never be able to navigate and thus, will be taxed at 100% of their sales, despite most of those funds should not be taxable because of cost basis of the sales.

Previously, tax reporting laws protected these yard sellers by keeping the reporting limits high enough that most of these sellers would never have to contend with tax reporting of their lower total sales. Business sellers with a high number of sales and high dollar amounts were always required to document and account for their sales and report them on their taxes. They already do this as a part of their normal business accounting. By lowering the reportable sales amount to a mere $600, this ensures most yard sellers now fall under the reportable category.

But to report your taxes accurately, you need to generate and file additional tax forms where you line-by-line account for every item sold, its cost and sales price to be able to get credit for any cost basis. Otherwise, absent these extra forms, the IRS will assess a 100% tax on all your sales. Yard sellers are not going to know or have records allowing them to file these additional forms or have business expenses they deduct to reduce tax burden. This means that once you enter the 1099-K data into your tax software, you will be assessed 100% tax on these sales. The IRS knows this, and this was the design of the law in its intent: to tax as many previously untaxed dollars as possible, regardless of if they should be taxed. The law has gone from an "assume you are exempt" for low-end sellers, to targetting them with a "prove you should not pay" philosophy. They are relying on the obscurity of the law and process complexity to force taxation of untaxable sales.

I think this is a result of our climbing national debt which is out of control and we will be seeing a lot more new legislation like this to extract more and more hidden tax dollars from the middle class. And if you think this is politically biased, I disagree. I think either party will do the same over the next few decades. Biden is doing so now with new proposed tax laws and Trump massively targeted the middle class for tax revenue and will do so again. They have no option, the debt demands it.

Advice: Chip sales should be either by check/money order or cash. Don't use paypal, etc or you will have to report the sales on your taxes and in order to not be taxed at 100% of the sale, account for everything sold individually. Oh, and by the way sales from "hobbys" according to the IRS are taxed at 100% now to try and close any loop holes, which technically, these sales of poker chips fall under, so the IRS will assess 100% tax on these sales anyway, if they were ever to audit any of these sales if you have cost-basis deducted them.

More rake is better…as long as someone else is paying it. Now, please give your baby donation.