EBay Sellers Face 1099-K Tax Headache Under New IRS Rule - Bloomberg

Summary

Small-business owners, prepare yourselves for the era of the 1099-K. That’s the tax form for disclosing transactions with services such as PayPal, Venmo, and Airbnb. Until this year, anyone with less than $20,000 in total payments typically didn’t get a 1099-K—and thus, in theory, could avoid paying taxes on money earned on such platforms. But since Jan. 1 those companies have been required to report gross payments of more than $600 directly to the Internal Revenue Service. That means small-business owners—as well as people who periodically empty their closets on EBay—will receive a 1099-K from any service provider where their income exceeds that amount.

Lexi, who asked that her last name not be disclosed because she fears an IRS audit, spends her weekends trolling flea markets, estate sales, and storage unit auctions for hidden treasures such as vintage sunglasses and Nintendo Game Boys. Since 2013 she’s sold those items as well as her old clothes and housewares on EBay, Facebook Marketplace, and Depop, earning as much as $15,000 a year. And because those companies didn’t say anything to the IRS, well … she didn’t, either. But under the new regulations, if she raids her closet for a vintage dress to sell for $45, that $45 will be considered taxable income unless she can provide the original receipt proving she’s selling it at a loss. “I’m just constantly cleaning out my house,” she says. “The new rule means I’ll have to track everything.”

Small-business owners, prepare yourselves for the era of the 1099-K. That’s the tax form for disclosing transactions with services such as PayPal, Venmo, and Airbnb. Until this year, anyone with less than $20,000 in total payments typically didn’t get a 1099-K—and thus, in theory, could avoid paying taxes on money earned on such platforms. But since Jan. 1 those companies have been required to report gross payments of more than $600 directly to the Internal Revenue Service. That means small-business owners—as well as people who periodically empty their closets on EBay—will receive a 1099-K from any service provider where their income exceeds that amount.

Lexi, who asked that her last name not be disclosed because she fears an IRS audit, spends her weekends trolling flea markets, estate sales, and storage unit auctions for hidden treasures such as vintage sunglasses and Nintendo Game Boys. Since 2013 she’s sold those items as well as her old clothes and housewares on EBay, Facebook Marketplace, and Depop, earning as much as $15,000 a year. And because those companies didn’t say anything to the IRS, well … she didn’t, either. But under the new regulations, if she raids her closet for a vintage dress to sell for $45, that $45 will be considered taxable income unless she can provide the original receipt proving she’s selling it at a loss. “I’m just constantly cleaning out my house,” she says. “The new rule means I’ll have to track everything.”

EBay Sellers Face 1099-K Tax Headache Under New IRS Rule - Bloomberg
Photo Credit: Bloomberg

Recent Ebay News Articles

Rare 50p coin sells for £225 with thousands more out there - Liverpool Echo

Something went wrong, please try again later. Sign up to FREE email alerts from our Money Saving Club Newsletter A rare 50p coin has sold for a huge 450 times its face value on e …

Read more here
Rare 50p coin sells for £225 with thousands more out there - Liverpool Echo

Be Wary of eBay Handling Time Rules - EcommerceBytes

Some sellers are reporting eBay is now allowing them to specify a 40-day handling time, up from 30 days, and are wondering the reason for the change in a post on the eBay discussio …

Read more here
Be Wary of eBay Handling Time Rules - EcommerceBytes

Fake Australia Post worker targets eBay seller: 'It is a scam' - Yahoo News Australia

An eBay seller has been the target of a scammer posing as an Australia Post worker, who attempted to lure the man to share his payment details. The Sydney man, who sold an item to …

Read more here
Fake Australia Post worker targets eBay seller: 'It is a scam' - Yahoo News Australia

Top News Story Advises Buyers on Cancelling eBay Orders - EcommerceBytes

A headline on Google News this week read, “How to cancel order on eBay and how to contact seller” that brought visitors to an article on the USA Today website titled, “Won the auct …

Read more here
Top News Story Advises Buyers on Cancelling eBay Orders - EcommerceBytes

eBay Buyers Don't Have Control over Returning the Wrong Item? - EcommerceBytes

Dear Ina, Once or twice per year eBay hits the press boasting of their seller protection. Do they do this for Wall Street or is just an attempt to convince sellers that they are d …

Read more here
eBay Buyers Don't Have Control over Returning the Wrong Item? - EcommerceBytes