Paypal 1099-k

[SacKingsR1]

Originally Posted by TimBuckTwo

By what date will Paypal notify you or send you a letter if you have a 1099-K to file for taxes?

Ebay states you will be sent information by Feb 3rd.

LOL if they do you should report them to the IRS. Let them get hit with a bunch of fees! From what I know it is MANDATORY for all tax information to be delivered or post marked by January 31st.

[TimBuckTwo]

Originally Posted by SacKingsR1

LOL if they do you should report them to the IRS. Let them get hit with a bunch of fees! From what I know it is MANDATORY for all tax information to be delivered or post marked by January 31st.

Form 1099-K is an IRS tax form that includes the gross amount of all payment-card and third-party-network transactions you received within a calendar year. If you’re a managed payments seller, we’ll mail you a Form 1099-K by February 3rd if you exceed both of the following thresholds:

You received more than $20,000 in gross payments from the sale of your items.
You had more than 200 payment transactions.

Direct from their website. Let's bust 'em. Maybe we can finally take ebay down !!!

[mnvikingstwins]

Illinois government and screwing their residents, in other news it's Sunday and the sun is out

[aggies1960]

Originally Posted by mjohnatgt

You guys are mainly thinking of the old rules for hobbyists. Those tax laws changed when they doubled the standard deduction a couple of years ago. If you are a hobbyist, not running a business, you likely owe taxes on the entire amount of your hobby income. But please take your information to an accountant or knowledgeable tax advisor. I just see a lot of bad recommendations made in this thread.

Yeah this thread is getting a little out of hand.
Feel like I need to get my CPA wife make a video to break it down for all of yall. I don't like seeing false tax information because I know too many people who have gotten IRS letters for very simple things.

[TimBuckTwo]

Originally Posted by oddstuff

Looks like Paypal sent out the 1099s yesterday. If you didn't get an email from them (maybe email is in spam folder?) and want to be sure, log into your Paypal account and you should see whether you got a notification in the upper right hand corner.

Thanks. I got nothing. And am thankful I do not live in Illinois (for tax reasons) or California (for many other reasons). LOL

[mrb842]

Originally Posted by mnvikingstwins

Illinois government and screwing their residents, in other news it's Sunday and the sun is out

For me the taxes aren't overwhelming-this is probably $250, it's that I have to waste all this time on something like this which isn't going to make the state any serious $.

[free2131]

This time of year always makes me glad I'm poor and hate selling cards on Ebay.

[QuinEarlyDoucet]

Yup, I am with you on this. I never know how I should calculate this. Wondering if it would be safe to put a cost basis of "ZERO" when you have an example like this. Figure that is most conservative and right thing to do. I dont know.

Originally Posted by Soxfan26

And that's where it gets complicated. Unless I have receipts, how do I do that? I sold a set of Muppets dvds (Season 1 and 2). Bought them at Target 7-8 years ago. Still in shrink wrap. Probably broke even, but I don't remember the original cost and certainly don't have the receipt. What about the three handbags I sold for my wife? She bought those for $150 a piece, used them sparingly, sold them for $25 a piece (all approximate). Were they new? No. Were they worth what they sold for? I don't know. How do you calc depreciation? Honestly, I'm probably in the hole. Sold some kids toys and stuff too. You're correct, I got none of this stuff for free.

[KingInTheNorth]

Just looked at mine and was really caught off guard. These sales can really add up quickly...

[pewe]

Originally Posted by KingInTheNorth

Just looked at mine and was really caught off guard. These sales can really add up quickly...

Congrats???


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[auctionjmm]

Originally Posted by SacKingsR1

LOL if they do you should report them to the IRS. Let them get hit with a bunch of fees! From what I know it is MANDATORY for all tax information to be delivered or post marked by January 31st.

The start of tax season this year was delayed to February 12th so that should apply to forms as well. Also, certain forms such as Schedule-K do NOT need to be released by the 31st. I received a Schedule-K last year 7 days before my return was due and the attorney said that was allowable.

[rngrdanny22]

Still don't have mine, but should get one. I probably won't get one from eBay managed payments since I switched so late in the year, so I'll need to figure out how to find the total sales there. Yes, I'll be paying taxes regardless if I get a 1099 or not... just like everyone should be doing.

[Soxfan26]

Originally Posted by mrb842

For me the taxes aren't overwhelming-this is probably $250, it's that I have to waste all this time on something like this which isn't going to make the state any serious $.

I've spent most of my morning now going through this just to get a handle, mostly for shits and giggles.

So the Paypal K-1099 includes everything. It's gross payment (for me around $1500 for selling off toys, wife's extra purses, a couple of cards, a bobblehead, mostly junk around the house).

First thing I had to do is going into the montly Paypal docs to figure out the tax that Ebay collected, as this isn't summarized anywhere easily. It's listed as "tax collected by partner". This is around $76.

Then a quick calc for the 30 cent fee per transaction (the Paypal 1099 is incorrect by the way, I had 41 transactions instead of 39), so that's $12.30.

Then subtract the 2.9% Paypal fee ($43.91).

Then subtract Ebay fees (generally 10%, except for books/movies). This is $145.75. Easily available through Ebay invoices monthly or you can run a report for the year. I cross checked it with my calcs.

Now subtract shipping costs. $328.45 for the year. So, that brings the total "net" sales (not including any Ebay or Paypal fees, taxes, or shipping) to $907.20.

That's without any deductions for supplies or cost basis, but obviously just to get to the "Starting point", this was a pain in the ass.

[rngrdanny22]

Originally Posted by Soxfan26

I've spent most of my morning now going through this just to get a handle, mostly for shits and giggles.

So the Paypal K-1099 includes everything. It's gross payment (for me around $1500 for selling off toys, wife's extra purses, a couple of cards, a bobblehead, mostly junk around the house).

First thing I had to do is going into the montly Paypal docs to figure out the tax that Ebay collected, as this isn't summarized anywhere easily. It's listed as "tax collected by partner". This is around $76.

Then a quick calc for the 30 cent fee per transaction (the Paypal 1099 is incorrect by the way, I had 41 transactions instead of 39), so that's $12.30.

Then subtract the 2.9% Paypal fee ($43.91).

Then subtract Ebay fees (generally 10%, except for books/movies). This is $145.75. Easily available through Ebay invoices monthly or you can run a report for the year. I cross checked it with my calcs.

Now subtract shipping costs. $328.45 for the year. So, that brings the total "net" sales (not including any Ebay or Paypal fees, taxes, or shipping) to $907.20.

That's without any deductions for supplies or cost basis, but obviously just to get to the "Starting point", this was a pain in the ass.

This is why I stick to ONLY selling cards through eBay/PayPal. i have a spreadsheet that I've been keeping since 2016 that logs every single card purchase (year, brand, player, card number, etc) and the cost of each card. If I buy a lot of 20 Juan Soto's, it's 20 lines, not a single line. As I sell, I start at the top and notate the amount sold with the date.

Yes, this whole process is a pain, but if you setup a great spreadsheet, it's a lot easier. Mine effectively tracks eBay fees, PayPal fees, shipping fees, supplies, and calculates COGS.

[coltsnsox07]

You guys should get more creative, knock down what you owe by including consulting fees to family members ala Trump, 'Should I sell the Zion raw or get it graded first Billy?'..

[jhssketchcards]

Originally Posted by coltsnsox07

You guys should get more creative, knock down what you owe by including consulting fees to family members ala Trump, 'Should I sell the Zion raw or get it graded first Billy?'..

If you paid for it you can ala if you pay for membership to sites like BO, Beckett etc.


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[starwolf1234]

I got mine this morning. Yay, Illinois. 111 transactions and $4500. CPA friend said since I do view mine as a legit hobby based on IRS definitions I should just put it in hobby income. No hobby deduction hurts, but whatever. Should have saved a couple hundred bucks instead of buying PC cards, but live and learn.

[discodanman45]

Originally Posted by starwolf1234

I got mine this morning. Yay, Illinois. 111 transactions and $4500. CPA friend said since I do view mine as a legit hobby based on IRS definitions I should just put it in hobby income. No hobby deduction hurts, but whatever. Should have saved a couple hundred bucks instead of buying PC cards, but live and learn.

Well if you do this you will be taxed completely on the $4500. You can't make any deductions for a hobby at all these days. The rules are absolutely stupid.

I would recommend looking into a schedule D which treats collectibles with short and long term capital gains. Treat sports cards like stocks. If you don't every single penny you earn from eBay will be taxed without any deductions at all.

[SacKingsR1]

Originally Posted by auctionjmm

The start of tax season this year was delayed to February 12th so that should apply to forms as well. Also, certain forms such as Schedule-K do NOT need to be released by the 31st. I received a Schedule-K last year 7 days before my return was due and the attorney said that was allowable.

Good to know as again I am a huge numbers guy but am not a huge tax guy lol. If I try to research I may get confused on a few things so I learn the tax figures when I file my own taxes every year.

Appreciate the heads up and that is good information to have...

[Sprewell8]

Wait so i understand correctly, the gross amount on the 1099 form, once we deduct paypal fees, ebay fees, ebay taxes per transaction, .30 cents per transaction on paypal, and shipping charge for each transaction, that net number is all we actually need to report to IRS, right?

Also, this stinks! I will lose money on deals because they are taking taxes on it. Boo hoo

[discodanman45]

Originally Posted by Sprewell8

Wait so i understand correctly, the gross amount on the 1099 form, once we deduct paypal fees, ebay fees, ebay taxes per transaction, .30 cents per transaction on paypal, and shipping charge for each transaction, that net number is all we actually need to report to IRS, right?

Also, this stinks! I will lose money on deals because they are taking taxes on it. Boo hoo

You have three choices.

1. Treat it as a hobby and pay taxes on the entire 1099 form with no deductions.
2. Treat it as a business and file a schedule C. If you report loses on this it is a red flag and the IRS will tell you to treat it as a hobby.
3. Treat cards as a collectible and file a schedule D. If you received a 1099-K form you will need to redirect from the schedule C as the IRS expects the income to go there.

Removing the ability to deduct costs from hobby income was stupid and completely unfair. Anything I sell on eBay that I sold for less than I paid for it I treat as an online garage sale. All the cards I sell I treat as a collectible on the schedule D form. I keep spreadsheets in case I get audited. It would be low though since I don't get a 1099-K form since I am in California.

[pewe]

Originally Posted by Sprewell8

Wait so i understand correctly, the gross amount on the 1099 form, once we deduct paypal fees, ebay fees, ebay taxes per transaction, .30 cents per transaction on paypal, and shipping charge for each transaction, that net number is all we actually need to report to IRS, right?

Also, this stinks! I will lose money on deals because they are taking taxes on it. Boo hoo

Because taxes are on net profits, you should never lose $$ because of them... just earn some amount less..


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[SupermanBrandon]

FB groups are littered w/ people having a panic attack today. Just as many of us predicted.

[coachnip13]

Originally Posted by discodanman45

Well if you do this you will be taxed completely on the $4500. You can't make any deductions for a hobby at all these days. The rules are absolutely stupid.

This is not true. You can still reduce your tax liability by the amount of COGS, even if it is just a hobby. The thing that changed a couple of years ago is that you can't deduct any other expenses. But cost of goods sold is still in play.

[Sprewell8]

Is there a way I won't get taxed on any of this?