I’ve purchased comics since 1985; some at cover, many not.
I have over 100 boxes.
I guess I should have been keeping all my purchase receipts since 1985?
I guess “technically” in 1994 I was supposed to report the $8 profit I made on a sale to Joe across the street…
In 1998 I was “technically” to report the profit from sales to my buddy for $100 for a couple of hardcover books?
And in the 2010s and beyond when speculating began now all 30,000 comics are just “inventory” because… well… y’know for tax purposes that’s all they really are.
Ahhh yea. Right. Sounds fair and reasonable. The big boys know they got you by the cajones and that’s why folks are infuriated. And they should be.
Has anyone heard if adding your tax info to these platforms will be required for any sales activity or something that won’t be triggered until you reach the $600?
Nope. Next year. Technically you could file quarterly in 2022 for 2022 income.
Starting next year, the federal threshold for issuing the 1099-K will drop to $600 with no minimum transaction level, due to a provision in the recently enacted American Rescue Plan Act. (Some states already have lower minimums.)
This means that in early 2023, you could receive a 1099-K for online sales you make in 2022. And this would be the case whether you’re an occasional seller or are operating as a business, as long as you sold more than $600 worth on a single platform. It doesn’t necessarily mean you’d be taxed on the money, but you would need to account for it on your tax return.
If you were buying and selling back in 1985, yes, you should have been keeping receipts.
I doubt the IRS is going to care about the lone sale in 1994 for $8.
The key now is, if you’re buying and selling week in and week out, that’s you making income, so yes, come audit time they’ll question every penny coming in and out. So you better have good records.
Now if you collected and never sold, maybe doing a few sales a year, the IRS will likely not care particularly if you are losing money. That’s why they don’t care about your yearly garage or yard sale. You’re selling off items you might of paid $100 for 10 years ago and selling for $10 now, at a loss.
The only thing I can recommend is, report all your income coming in. If you move a lot of inventory, buying supplies and what not to sell comics, keep tabs on everything cause taking the “standard deduction” you’ll likely be losing money while claiming actual tax deductions can add up, cutting your overall tax bill.
But you do what’s best for you, just don’t come crying when the tax man a cometh because the last person I knew that got audited said it was the worst time of his life. Said he almost contemplated just killing himself to ease the pain.
@p4p3rm4n , even if they don’t report sales that don’t go over $600, you should be reporting the income. If you were to get audited, they’ll question every deposit and you’ll need to provide proof of what and where it came from, etc. If you can’t, they’ll likely just penalize you and now you owe taxes on it with interest (if the audit is years later).
I just got my Mercari email about the law and changes… it states:
Beginning January 1, 2022, marketplaces like Mercari are required to collect W-9 identification information from sellers who transact $600 or more in gross sales in a calendar year.
This tells me they are starting to collect tax info to send the info off for the actual 2022 tax year, which you file in April of 2023. So doesn’t seem like they’re jumping the gun on reporting sales. So it’s doubtful they’ll be doing it for 2021 tax year…
Mostly curious if these platforms will turn away casual sellers that won’t want to give all of that info over just to sell a single garage sale item on ebay. So will they let you sell until you hit that $600 dollar window then it’s time to hand over your info… or do updated terms of service mean your account is inactive until you’ve filled out the form regardless of your total.
Probably but then again, if you are deterred from this that means you’ve been dodging taxes on income previously.
I’d imagine in order to sell, you’re going to have to fill out the forms. Allowing people to sell up to $600 and then stop selling is just opening a can of worms that would likely allow some to bypass the limits and just open new accounts right before they hit the threshold.
I appreciate the recommendations going forward.
Going forward is all one can do now.
I do, however, maintain that for those of us that have been collecting for 30+ years that it is unfair and unreasonable to have receipts for purchases made 30+ years ago for what was supposed to be a hobby at the time (and for a long time thereafter). My inventory should not be valued at $0. I am quite pissed and that’s kinda hard to do to me.
But, as you implied and I stated, this is about going forward and my going forward means saying goodbye to Ebay, Mercari, Whatnot and every other online platform up to $599. I will not be party to this. Hello 2022. Hello selling at Flea Markets. Hello to my own monthly sidewalk sales. Hello to small cons. Hello to local FB & Insta point to point sales. I believe others will follow who think this is unfair and unreasonable.
Well, the older books don’t have to be valued at $0. You can always at minimum claim the value at purchase time was the cover price of each, that’s plastered on just about every comic.
Just my word of advice, I wouldn’t publicly state too much of your intents on a open and public forum. If you did ever get audited in the future and they traced you back to your online activities, they’ll see your intentions and you’ll not be able to make excuses when they’re tallying up deposits (even cash ones).
I found a loophole as long as you have a Puerto Rican address and only sell your books in Puerto Rico you won’t have to pay federal taxes on your comic sales.
By moving to Puerto Rico through one of the tax programs – which require you to have NOT lived there in the last fifteen years – you can take advantage of a 4% income tax rate , 0% dividend rate, and 0% capital gains tax rate. You and your business ACTUALLY need to move to Puerto Rico. It has to become your “tax home”.
And… to become a bona fide Puerto Rican resident…
Establishing bona fide Puerto Rican residency requires being physically present in Puerto Rico at least 183 days during the tax year, not having a tax home outside Puerto Rico during the taxable year, and not having a closer connection to the United States or any other foreign country than to Puerto Rico.
So is it a loop hole? Not really cause you basically have to move to Puerto Rico and stay there… You’ll probably spend more moving than the taxes you’re trying to avoid…
Just buy enough new comics every year that it exceeds your net sales and you won’t owe anything. You’ll just have to pay the taxes when you stop buying. IRS will just consider it a hobby until that point. Break down shipping, ebay fees, and inventory in Schedule C along with your net sales minus the sales tax collected by eBay. I wouldn’t claim office square footage because that gives you a 1 out of 4 chance of being audited.
Yup, one year I was going to include the space I used for shipping comics and such when I was selling a crap ton and the “you’re chance of getting audited” freaking shot through the roof… so I was like… screw that, it’s not worth the few pennies on tax savings for them to come and invade my life, nitpicking every damn penny I’ve made for the past 7 to 10 years or whatever…
