I think most people that are upset (like me) because why should we pay the tax when big companies pay about nothing. We know about the laws. This will have a big effect on the internet platforms. Besides that, this will effect the market of buying and selling. It could be good and bad for collectors. Things could be easier to find and values might drop. We will have to see. The sales of new comics as a whole might go down. It will effect other collectibles. This will effect brick stores like comic shops, collectible stores, auction houses and flea market vendors.
I will not be buying to many new things to resell. Maybe when I retire and have less of an income. I will just go back to my collecting. Why would anyone buy a $4 comic to resell for $10. After the fees you might get back $8.00 and the pay another say $2.00 in income taxes on that. After all your work you might make $2.00. Not for me.
Does this hypothetical sound like a reasonable solution?
Buy x amount of comics in 2022
Sell y amount of comics in 2022
If y - x ≤ $599 on Dec 31st then you’re good
If y - x > $599 on Dec 31st, then buy more comics from yourself in the amount that will take your ‘profit’ below the $600 threshold
Hypothetically, if the Gov’t is taxing my hobby like a business, then I will turn my collection into inventory a little bit at a time as needed to ensure I’m under $600.
Edit: or is this moot because the threshold is based on transactions and not profit? If that’s the case, just file an LLC and make y - x equal to a nominal amount.
As I’ve stated before, I ALWAYS pay my taxes and any/all 1099s and 1040s are submitted to my tax folks. I would never suggest, encourage, advise, or condone NOT paying your taxes.I usually owe taxes. It sucks. I feel that we pay way too much in taxes.
My anger toward this clause is that it just feels like a cash grab. Washington never seems willing to look in the mirror and be honest with themselves about the ridiculous crap our tax dollars pay for that SHOULDN’T be paid for.
I know I started down a rabbit hole and I apologize for the distraction I may have caused. That being said our elected officials are human. They are fallible. I still urge that people read “The Prince” and then take a step back and survey the landscape.
That’s not how it works. Any income from eBay sales should be being claimed on your taxes. This is in regards to eBay sending out a form. They don’t have to send that form unless you meet the requirements. They’ve now lowered that down from the $20,000 to the $600. At least that’s my understanding of it.
What I’m saying is you should’ve been already paying taxes on sales regardless of the dollar amount. You don’t have up to $20,000 before you have to report it. That just triggers a form being sent. If I’m making sense or maybe I’m just misunderstanding you.
That’s not entirely true. They’re only required to report such earnings when it went over 20k or 200 transactions via paypal but you should still have paid taxes on “income” from your sales.
You might want to seek a tax professional though. If you got audited, despite paypal/ebay not reporting this to the IRS, you’d still held accountable for all money coming into your bank accounts.
So, become a big company and report just as many losses as money you made… You do realize these companies that make a crap ton of money also lose a bunch of money, while also donating a lot of money to end up not paying taxes. So yes, it’s maddening but not as maddening when you look at all the details of why they don’t pay as much.
Yea I get it. I was actually misunderstanding. Yes I should have been reporting earnings but no one is coming after me for a few grand in sales in a calendar year. It would cost them more in paying employees to come after me than they would get lol So regardless of the past, 2021 will be the first year I am reporting sales. I actually started collecting taxes on ebay sales for my state in November or December.
Ebay has allowed our hobby to be centralized in early 2000’s. If you purchased comics in the 70’s and 80’s (and even some 90’s) it was mostly a localized sale situation with prices/values set by Overstreet. If you wanted a particular comic in that time, if it wasn’t in your general vicinity you were willing to travel, you’d have a real hard time getting the comic.
What may very well happen is a de-centralization of sorts with this Bill. Does one want that 9.8 copy of XXXX and willing to buy it at FMV for $2K in 2022? Well - you may not find that many opportunities anymore on Ebay. Again - some comply; but many adapt. I am quite sure it will be harder to get the comics one wants on Ebay than it currently is today.
Okay, so assuming I still do a lot of buying and selling in 2022 why do I need to be an LLC? Can I just do it as me and keep track of stuff closely that I then report on my 1099 or such? Who was the guy who said he’d give us tax info in DMs for a small fee?
I am planning on starting something when I retire. I’m just explaining the facts. This will hurt the internet based economy. Earlier this year people were quitting eBay because of an payment system change. You don’t think this won’t have more of an effect. Why is everyone so willing to submit? Now the everyday person that sells anything over $600 has to keep records. You buy something in cash at a garage sale and then sell it years later for $601 profit. Now this could open you up to an audit. It is not fair for the regular person.
We will have to see how this gets set up. We might just report the earnings as a capital gain. Like an investment. Whatever it is you should start keeping track of what the cost of the item was and then the date of purchase. An keep the receipts or record of where you purchased it. I’m just will start a ledger.
As someone who has been above the 20,000$ and 200 transaction limit every year. And as someone who has always filed this income on my taxes as a sole proprietor business, the $600 makes no difference. In fact, from time to time I have had to pay day labor to help with stuff. Normally the rule is if you pay them over $600 you have to provide a 1099 for them. I have always been under that $600 threshold but have gotten close. So that $600 limit seems to have been there for a while.
Maybe cause as a tax payer, I’ve already been doing it as should everyone else.
Now, garage/yard sales are a different ball game though. The IRS will allow people to do a few per year and not care about the sales since you are likely selling items at a loss from the original purchase price.
Why would the IRS make you pay taxes on that beat up set of pots and pans you paid $200 for and now selling for $5? That’s a loss, not a gain.
But if you bought something for $600 at a garage sale and then later sell it making $601 profit, you should pay taxes on it. Or did you mean to say $1 profit instead? Cause if you bought something for $600 and sold it for $601 years later, that’s $1 profit… not $601 profit…
I used to prepare taxes. I still prepare my own taxes. I used to have my own small business. I know about paying taxes and pay taxes. eBay is like an online garage sale for a lot of people. They sell unwanted stuff. The point is they might have to prove it is a loss for things over $600.
I am a collector and have been selling things on eBay to pay for my collection. I have already started keeping records for my transactions on eBay for this year. How have you been paying taxes for your ebay sales? Do you file a schedule C like a small business? or do you file like an investment like stock transactions with capital gains?
I was trying to say if you had sales on ebay over $600 total selling stuff like clothes, household junk or whatever.
The bottom line is you will have to be more organized with records. If you have been selling like business, then nothing will change for paying taxes. If you are a collector selling stuff you will have to be prepared.
There probably will be a drop in sales. There will also be less things to buy also. I don’t about prices? Do they go up or down. Do less people spend money because they will not be selling online? This is an spec market. There will be more sales at the shows or other places off line.
Some one will have some type of software by the end of the year and we will have more information from eBay or the IRS on this matter too.
