Sellers Beware !!

[BluezMe]

First... this is not a Political Discussion... it's New Federal Tax Law and could affect all of us here the USA.

I'm posting this in "Vintage" for the reason there's significant Gains to be made here.

Would like feedback and discussion... are you aware of this... do I understand it correctly... am I being Paranoid ?

How to avoid an Anal Exam ....Cash Only Sales (which would restrict a significant amount of potential buyers)
Bank Cashier's Checks... maybe (knew a guy who got Burnt big from a stolen one) and with today's Tech... can they be easily Forged ? Pick up only... Personal Checks may be an Option with Proper ID... and hopefully their personal Car License Plate number.

Most all of us are aware of 1099's reporting your Income... but have you ever received or filed a 1099 K ?

The old Law was 200 transactions totaling $20,000. The New Law is simply $600. with all online Payment Platforms required to report your Sales.

Obviously selling your used car for $5,000. and taking an "Online Payment"... may not capture the IRS's attention... but how many of us have sold 2 Guitars and 2 Amps in a year ... $15,000. might make them sit up and Take notice. Imagine going before an IRS Auditor without any Purchase Receipts !!!

Below... a short overview of the Law.

Beginning in 2023 (last years' Tax Filing) anyone selling items through online marketplaces (eBay, Etsy, Mercari, PayPal, Reverb and more) must file an IRS Form 1099-K (for the tax year 2022) if they grossed over $600 in sales for any number of transactions.

Imposes Economic Burden and Increases Complexity and Compliance Costs​

• Many sales of used goods by casual online sellers and entrepreneurs would not create any tax liability since the items are often sold for less than what was paid. (tell that to an IRS Auditor)
• Nearly 40% of online sellers surveyed said the change poses an economic hardship, a significant majority of whom sell online to help pay for necessary personal expenses.
• Two out of three (69%) said they are likely to sell less or stop selling online.
• Family and friends splitting the cost of a meal or sending gifts could also mistakenly receive tax forms.
• Out of confusion, tax filers may not know how to report the sales or over-report income leading to inaccurate filings.
• Tax filers with simple returns may be forced to hire a tax professional to ensure compliance.
• Adjusting tax returns will force the IRS to expend additional resources and may delay the processing of those taxpayers’ returns contributing to the IRS backlog.

Disproportionate Effect on Women​

• Women dominate gig economy work when separating out ridesharing and delivery services
• (gig meaning... something done occasionally)
• Women are selling used kids’ clothes, engaged in food/grocery delivery, tutoring, babysitting, and other activities arranged through online apps

Form 1099-K was designed to capture reporting of payments to independent contractors and online sellers via electronic payment platforms rather than traditional cash, check, or direct deposit. Congress previously set the filing threshold for Form 1099-K reporting at $20,000 in payments and 200 transactions.

• In 2021, Congress lowered the threshold for reporting online sales from $20,000 to $600 and eliminated a transaction minimum.
• Lawmakers sought to raise $8.4 billion from perceived tax avoiders to fund the inflationary $2 trillion American Rescue Plan

Remember... we're talking about two different things here... voluntarily reporting Internet sales on a 1099 K... and the IRS getting your Payment info from the online "Payment Platforms"... then sends you a 1099 K complete with all recorded Sales : (

Guessing would be considered a Capital Gain... the Trick would be providing Evidence if it was Short or Long Term.... what a Cluster Fox Trot !!


concerning the Grieving Widow selling the 2 Full Stacks... she would have no Profit in them (Stepped up Basis) due to Inheriting them... but "online payment sales" of $20k plus... may not exclude her from an IRS Audit

​

 

[mrjones2004x]

My god America sounds complicated. Glad we don’t have this in the uk. Well not that I’m aware. I up trade and up sell on gumtree all the time and made £600 profit over last 6 months just selling guitar related gear for more than I purchased it. Using eBay as a free advertising platform 😉 I wouldn’t bother with that nightmare system you guys have.

 

[Geeze]

The sad thing is while they [you know who] think they're going to raise revenue with this what will happen is the same thing that always happens is the person with the tax burden will look for other options that don't levy the tax. I remember when Maryland raised the tax on cigarettes - euphemistically known a sin tax - from $1 per pack to $2 and the state touted they would raise $50 billion in revenue in the first year. Nope. They raised the cigarette tax income for all of the surrounding states as people would drive to Virginia and save $1.70 per pack or $17 per carton.

I'd whip out the tin foil hat analysis on this funds tracking move by you know who but don't want to derail the thread.

Russ

 

[TXOldRedRocker]

IRS announces delay for implementation of $600 reporting threshold for third-party payment platforms’ Forms 1099-K​

https://www.irs.gov/newsroom/irs-an...or-third-party-payment-platforms-forms-1099-k

 

[BluezMe]

My god America sounds complicated. Glad we don’t have this in the uk. Well not that I’m aware. I up trade and up sell on gumtree all the time and made £600 profit over last 6 months just selling guitar related gear for more than I purchased it. Using eBay as a free advertising platform 😉 I wouldn’t bother with that nightmare system you guys have.

I'm Curious... you do have the Value Added Tax... (Vat) Correct ? is that only on new Sales ?
For example... whenever we purchase a used Car... we always have to pay Sales Tax on the Purchase Price... no matter how many times the car is Sold

 

[Gene Ballzz]

WOW!

I had been wondering where the free $$$$$ doled out during the pandemic was going to come from. I had just assumed that creditors would summarily get stiffed! Instead they are simply going to steal it from the citizenry under questionable pretenses. I'm sorry, but if I sell a guitar, sales tax was already paid on that guitar, as it left the vendor. If another tax gets tacked on for reselling it, that is "taxation upon taxation" which was the main basis for the American Revolution, nearly 250 years ago!

Or Well,
Gene

 

[Gene Ballzz]

I'm Curious... you do have the Value Added Tax... (Vat) Correct ? is that only on new Sales ?
For example... whenever we purchase a used Car... we always have to pay Sales Tax on the Purchase Price... no matter how many times the car is Sold

Yeah, that was the beginning of a slippery slope, although it is not federal, but widely and wildly different in each state!
Just Payin'
Gene

 

[V-man]

I said it before, and I’ll say it again about these shitstains… you wantt to consider sales “proceeds“ of a $5,500 guitar bought new for $750 decades ago?

1. adjust for inflation.

2. offset ALL parts, setups and maintenance as preservation expenses.

3. If in fhe “trade” (X sales per year), offset a portion of utilities (rent, electricity) for ALL decades possessed to preserve/maintain an asset just like any other business reporting profits may do (since we are now assumed/accused of the fucking same).

4. If in the recording/performance business, offset all play wear deviation (chips, finish wear, etc) devaluation as depreciation from what the collector grade variant’s premium would be.

 

[mrjones2004x]

I'm Curious... you do have the Value Added Tax... (Vat) Correct ? is that only on new Sales ?
For example... whenever we purchase a used Car... we always have to pay Sales Tax on the Purchase Price... no matter how many times the car is Sold

If I buy a secondhand car from a proper dealer yes it will have VAT in the price. They pay this through their buisness. If I buy a car from someone on say auto trader website then it’s price is it price. He wants say £5000 I give him that or whatever we agree on. No taxes involved if a private sale. I got a car off eBay once and didn’t pay any sort of taxes also.

I’m 41 now and never had to do a tax return or pay any sort of tax for a purchase separately.

 

[BluezMe]

IRS announces delay for implementation of $600 reporting threshold for third-party payment platforms’ Forms 1099-K​

https://www.irs.gov/newsroom/irs-an...or-third-party-payment-platforms-forms-1099-k

Thanks for Posting that... what a relief. Was pretty sure the new House would not appropriate the the $ for the 85,000 new IRS agents requested in that Bill... but still a little Scary... afraid they'll put it in Moth Balls for the time being and bring it out again. A Passed Law is rarely if ever rescinded

So you have one girl and 2 mistresses'... Golf and Guitars : ) I'm guessin' you're in Texas. When working in Austin in 1983.. went out to see some friends playing a Tournament at the Morris Williams Golf Course. Met and talked with Tinsley Penick and parlayed that into a lesson at the New Austin CC with Harvey... a memory for a life time.

 

[BluezMe]

If I buy a secondhand car from a dealer yes it will have VAT in the price. If I buy a car from someone on say auto trader website then it’s price is it price. He wants say £5000 I give him that. No taxes involved if a private sale. I got a car off eBay once and didn’t pay any sort of taxes also.

 

[BluezMe]

Different here in the USA with Cars... even from a Private Seller... they put the sale Price on the Title (usually both agree to write down a much lower sale Price)... but when doing a Title Transfer at the Local Bureau of Motor Vehicles... they will charge Sales Tax on the Price of Sale

 

[Rodical]

Taxes are theft...

 

[mrjones2004x]

Different here in the USA with Cars... even from a Private Seller... they put the sale Price on the Title (usually both agree to write down a much lower sale Price)... but when doing a Title Transfer at the Local Bureau of Motor Vehicles... they will charge Sales Tax on the Price of Sale

Once we buy a car we send off the green slip part of the V5 document and that’s that. Only has name and address details and sold date. No mention of sale price. Doesn’t even cost to have the logbook (title) changed into your name.
Can do it online most of the time and you get new documents few days later. Quick and easy

 

[DaDoc]

A lot of sellers are kinda freaking about this, but the thing is that WE WERE TOLD it was coming! And I would say it's a safe bet that lot of the same sellers who are complaining right now also helped make it happen in a roundabout way! Think about it.

I won't say anything more, as I don't want to be the one who gets the thread nixed, but this kind of crap is what ya get when certain people are holding all the cards, (or have all the power)..

Just some food for thought in a couple of years down the road.

 

[sct13]

Yea they SCREWED us and everyone else real good....I USED to deal guitars for fun....and support my "habit".... Now....Fk it....

I'm not in business and the feds looking up my behind is simply bullshit....So I'm out of "business"

I guess for now....if you need to continue selling you need to charge sales tax ....it passes right on to the customer unfortunately.....In Michigan its 6% ....

Its sad really

And I could see a cap of say 5k ....but $600? Slap in the face to the internet cash flow....

 

[BluezMe]

A lot of sellers are kinda freaking about this, but the thing is that WE WERE TOLD it was coming! And I would say it's a safe bet that lot of the same sellers who are complaining right now also helped make it happen in a roundabout way! Think about it.

I won't say anything more, as I don't want to be the one who gets the thread nixed, but this kind of crap is what ya get when certain people are holding all the cards, (or have all the power)..

Just some food for thought in a couple of years down the road.

It's good to know... we're not all drinking the Kool Aid here

 

[mAx___]

As if lowering the threshold from 20K to $600 wasn't aggravating enough, now it seems that if you sell anything to someone in California, they passed a law saying that you owe taxes in that state even if you don't live there. I hope I read that wrong.

 

[BluezMe]

Hope everyone saw TXOldRedRocker's post... appears this Money Grab has been put on Hold for a while... no need to file 1099 K's or expect to get one from the IRS this year.

Sorry for Freaking everyone out... but fortunately... got some good news out of it... hopefully will be more than just a Temporary Stay of Execution

 

[TXOldRedRocker]

As if lowering the threshold from 20K to $600 wasn't aggravating enough, now it seems that if you sell anything to someone in California, they passed a law saying that you owe taxes in that state even if you don't live there. I hope I read that wrong.

Not the case. A non-resident individual can sell to CA residents without tax consequences.

Things get complicated when you talk about non-CA employers with CA employees. Non-residents owning property in CA, etc., etc.