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1099 K From PayPal -

#182
jdwinva said:
This is an classic example of over regulation of fintech. The IRS doesn't understand it so they tax everyone they can. It will be challenged in court I sure. Paypal was strong-armed into this by the IRS . Just as Reverb.com was strong-armed to charge sales tax to buyers. My question is "why would I have to pay tax on used stuff I sell on Paypal if I can sell my used Harley to a dealer and not get a tax form or reported sale to the IRS?" If this holds I won't be using Paypal or Reverb and it won't be long before Talkbass.com gets a call from the IRS.

The threshold appears to be $4,000 in most states and in some states, like Virginia where I live, it's a $600 threshold!! So if I sell one bass it's a taxable event? Unreasonable.

Reselling on eBay or Reverb or Talkbass is not a business for most. It's cleaning out what you don't use. If you are going to be taxed you have the right to write off business taxes, cost of goods sold, marketing, supplies, shipping, etc. We hobby bassists are not a running a for-profit business.

I will talk to my accountant next week. Seems like misguided overreach and a money grab.
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Been going on for a long time. This is nothing new.
 
#184
So I tried entering my 1099Ks (from Paypal and Reverb) into Turbotax, thinking I'd be able to document my receipts showing net-loss. Unfortunately Turbotax indicated that even with such losses, I'd still be paying significant taxes due to "self-employment" tax. Ridiculous. I guess I will not be filing these 1099K with my return. If they come for me I will refer them to the MA website which basically says "no problem" if the payments are only for at-loss sales of used stuff (ie not a business).
 
#185
jw23mind said:
So I tried entering my 1099Ks (from Paypal and Reverb) into Turbotax, thinking I'd be able to document my receipts showing net-loss. Unfortunately Turbotax indicated that even with such losses, I'd still be paying significant taxes due to "self-employment" tax. Ridiculous. I guess I will not be filing these 1099K with my return. If they come for me I will refer them to the MA website which basically says "no problem" if the payments are only for at-loss sales of used stuff (ie not a business).
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Yeah my stuff was at a loss too. I'm not filing them since I wasn't a business of any sort. Our accountant was surprised at these too
 
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#187
jw23mind said:
So I tried entering my 1099Ks (from Paypal and Reverb) into Turbotax, thinking I'd be able to document my receipts showing net-loss. Unfortunately Turbotax indicated that even with such losses, I'd still be paying significant taxes due to "self-employment" tax. Ridiculous. I guess I will not be filing these 1099K with my return. If they come for me I will refer them to the MA website which basically says "no problem" if the payments are only for at-loss sales of used stuff (ie not a business).
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Talk to a CPA. They will come after you.
 
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#190
What if you're selling music gear for someone else through your own Ebay or Paypal account and end up getting a 1099-K for those transactions? Should I report those because I'm making a small commission on the sales of said items? These are the gray areas of tax accounting that I can't stand.
 
#193
PolkaHero said:
What if you're selling music gear for someone else through your own Ebay or Paypal account and end up getting a 1099-K for those transactions? Should I report those because I'm making a small commission on the sales of said items? These are the gray areas of tax accounting that I can't stand.
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My guess would be that it would be sufficient to document that you received no gains from the sale, and report it as such.

Commissions are income, so tax needs to be paid on that. :)
 
#194
MultiScaleMale said:
Ah, here's the reason we have to deal with this - Uber and Lyft claim they are just a 3rd party processor, processing payments for the drivers.

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This gig-economy model where the employees are all "independent contractors" means that everyone else has to do extra work -- and pay for what they avoid paying for with what would have been their "employer" taxes.
 
#195
PolkaHero said:
What if you're selling music gear for someone else through your own Ebay or Paypal account and end up getting a 1099-K for those transactions? Should I report those because I'm making a small commission on the sales of said items? These are the gray areas of tax accounting that I can't stand.
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It may be that *you* would need to send a 1099-K to the folks you sold for.

But the bottom line remains that the 1099-K is a receipt that says you received money from a source, and that the IRS knows it. What the IRS doesn’t know is the context, how much the thing you sold cost you, where, and when, nor where the money went after you received it. Depending on those factors, you may or may not owe tax, but since the government knows about the one movement of money, you now have to be sure that you document the rest of the story if it turns out you don’t owe.
 
#196
Sid Fang said:
It may be that *you* would need to send a 1099-K to the folks you sold for.

But the bottom line remains that the 1099-K is a receipt that says you received money from a source, and that the IRS knows it. What the IRS doesn’t know is the context, how much the thing you sold cost you, where, and when, nor where the money went after you received it. Depending on those factors, you may or may not owe tax, but since the government knows about the one movement of money, you now have to be sure that you document the rest of the story if it turns out you don’t owe.
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I'll make it really simple. I'll report as income my commission on the sale of the instrument. Of course everyone knows the IRS is anything but simple!
 
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