eBay is rallying the troops to try and change 1099-K tax reporting rules, issuing a message to its community of sellers this week. eBay used an example of someone selling a personal item on its marketplace to bolster its argument:
“Imagine selling an old bike for $800 that cost you $1,500 a few years ago. Since you didn’t make a profit, the IRS doesn’t consider that taxable income. But under this new law, you’re still going to get a 1099-K. And now you’ll have to prove to the IRS that you don’t actually owe any taxes on that sale, which makes for complicated accounting work.”
People frequently raise the issue on eBay’s seller discussion board, with some stating they believe the threshold is too low, and others saying even with a higher threshold, sellers are required to – and should – report their income.
In Monday’s post, eBay pointed to FAQs section on its website and urged sellers to contact their elected representatives and ask them to pass a new bill recently introduced in Congress that would “raise the threshold and limit the number of sellers getting these unnecessary forms.”
“But,” eBay continued, “we need your support to make sure it will pass! Go to our eBay Main Street website and tell Congress to act now to support Americans selling online. It will only take a few minutes, and if we succeed, it can save you, and millions of other sellers the hassle of needless tax forms for years to come.”
eBay linked to a March 15th press release on Representative Chris Pappas’s website about his proposed legislation dubbed the “Protecting Americans from Tax Overpayment Act.” The press release quoted four online sellers from New Hampshire.
According to the Pappas press release, the legislation would do the following:
- Raise the reporting threshold from $600 to $5,000.
- Require entities to issue a plain-language description of the taxability of income reported on Form 1099-K to reduce confusion among online sellers.
You can find the full post on the eBay website where it asks sellers to click through to a page on its eBayMainStreet.com website to make it easy for sellers to reach out to their representatives.
Sure wish ebay would put this much effort doing something about the USPS, another 1-2 years and it won’t matter to anyone selling online. USPS latest surcharge increased wiped out half my income, did ebay even care, NO NO and NOPE. Several reps I’ve talked didn’t even know about the surcharge. IF Dejoy has his way, rate increase’s twice a year and there won’t be anyone left except the Big Companies.
Politicians are idiots, see dollars signs yet just not the right ones, When they pasted this law didn’t even think the tens of million of 1099’s the understaff and over worked IRS will have to go thru. I bet it will cost more to process then it will bring in money.
Only advice I can give is get your 2023 taxes done as soon as possible, next year is gonna be a mess.
The current US poverty level is $13,590.
THAT is the number the IRS should be paying attention to.
Not the $600 or $5,000.
Did you know : You practically need to take a vow of poverty to be on retirement ?
This country sucks.
Time for the deadbeats to pay their fair share also. If you sold it then report it.
I wish they fought that eagerly to lower shipping prices / stopshipping prices hikes. Go figure
amen, at this rate, shipping will end online sales, only the big guys will be left
Why is it so difficult to get eBay to pay attention to seller productivity? Sale amounts are almost totally hidden by eBay in their sales and payouts reports. Better and more user-friendly reporting could save unwary sellers hours and hours of IRS audits if net payment amounts instead of gross sale are reported as income. While the results may be the same, omitting expenses buried in net payments could be lower than 1099-K amounts. Will eBay ever make it easier to sell? Does anyone at eBay headquarters care anymore?
Had a similar problem as this, which involve Social Security disability years ago. Was selling our personal items on eBay, old computers (now somewhat collectible, ironicallly), old synthesizers from the early 70s (Korgs, mostly) and so on. Because of these sales and the 1099 eBay sent us as we exceeded $600, I lost my disability! Yes, part of that is on SS as well, because SS refused to grasp that a 1099K might be for things someone owned already, and not a warehouse of new items. I found the folks at Social Security were the stereotypical government workers, not caring a bit about what was happening. Visits to the local Soc. Sec. office were depressing as I watched elderly people weeping as they walked away from the “service counter”. Disgusting.
If eBay can help pressure this stuff to change, I’m all for it. But I can’t help wondering why eBay is so interested in this, and there must be something in it for them. I also wish they’d put as much effort into fixing their buggy software and actually listening to/reading the surveys they get from sellers rather than using the surveys as a carrot-and-stick to make sellers think they’re actually being heard!
@tsme35, if you are not using Pirateship you should….they will save you money and are basically hassle free if you have to file insurance claims with the USPS.
I took a look and compared, UPS and USPS rates for 1st class and long priority box, 38x6x5, their the same rate, the box actually was .03 cheaper on ebay. Don’t have to worry about filing any claims with the PO anymore because shipping with either was over $25, my fishing rods wouldn’t sell