Paypal 1099-k - Page 6

mjohnatgt · 01-24-2021, 05:25 PM

Still a LOT of bad advice being given. Basically, if this thread is your plan to file your taxes, get a new plan.

nerdherd020 · 01-24-2021, 05:35 PM

Curious about those doing your own taxes... which tax software do you use? I’ve been using TaxAct for several years now but am thinking of switching. TurboTax seems to be the most popular. Which one do you use and your opinion on it?

ALBASKETBALL · 01-24-2021, 05:35 PM

Quote:

Originally Posted by mjohnatgt

Still a LOT of bad advice being given. Basically, if this thread is your plan to file your taxes, get a new plan.

This same thread happens every year....and bad advice is given every year...along with some good advice.

Soxfan26 · 01-24-2021, 05:49 PM

Quote:

Originally Posted by mjohnatgt

Still a LOT of bad advice being given. Basically, if this thread is your plan to file your taxes, get a new plan.

Anything helpful to add?

Soxfan26 · 01-24-2021, 05:50 PM

Quote:

Originally Posted by ALBASKETBALL

This same thread happens every year....and bad advice is given every year...along with some good advice.

What's the good advice?

Soxfan26 · 01-24-2021, 05:50 PM

Quote:

Originally Posted by mjohnatgt

Still a LOT of bad advice being given. Basically, if this thread is your plan to file your taxes, get a new plan.

What's the bad advice?

Sprewell8 · 01-24-2021, 05:52 PM

What if you know exactly what you bought something for that you just sold, but have no old receipts demonstrating what you bought it for?

asujbl · 01-24-2021, 05:53 PM

Quote:

Originally Posted by Soxfan26

What's the bad advice?

Most of it

mjohnatgt · 01-24-2021, 05:55 PM

The bad advice is to start making deductions if you count yourself as a hobby, or to try and pass yourself off as a business if you're actually not.

The good advice is to claim it all as hobby income and pay the appropriate taxes on it, unless you pay a qualified accountant or tax advisor who recommends you treat them as capital gains investments (and is willing to attest to that). Or file as a business if you really are a business.

If you're not a business, register as a business tomorrow and start tracking all your expenses so that you can file properly next year. Don't just flip flop year to year based on what saves you the most money.

REMEMBER: IF YOU GET AUDITED, THE IRS IS LOOKING AT PREVIOUS YEARS TAXES AS WELL!

shrevecity · 01-24-2021, 05:56 PM

Quote:

Originally Posted by nerdherd020

Curious about those doing your own taxes... which tax software do you use? I’ve been using TaxAct for several years now but am thinking of switching. TurboTax seems to be the most popular. Which one do you use and your opinion on it?

Turbotax makes it easier to get deductions. They direct you to them better

hatchd · 01-24-2021, 06:03 PM

This little equation will answer 93.7% of the questions in this thread:

Beginning Inventory
+ Purchases
- Ending Inventory
= Cost of Goods Sold

rngrdanny22 · 01-24-2021, 06:09 PM

Quote:

Originally Posted by mjohnatgt

If you're not a business, register as a business tomorrow and start tracking all your expenses so that you can file properly next year.

You don't need a business license to fill out a Schedule C....

mjohnatgt · 01-24-2021, 06:10 PM

Quote:

Originally Posted by rngrdanny22

You don't need a business license to fill out a Schedule C....

No, but you should actually be operating a business. Again, people should consult and pay for good advice, and not just trust crap on message boards.

rngrdanny22 · 01-24-2021, 06:13 PM

Quote:

Originally Posted by mjohnatgt

No, but you should actually be operating a business. Again, people should consult and pay for good advice, and not just trust crap on message boards.

Gotcha. I operate as a business, but don't have a business license. I file a Schedule C every year due.

Oh, and congrats on 10K posts!

Soxfan26 · 01-24-2021, 06:16 PM

Quote:

Originally Posted by mjohnatgt

The bad advice is to start making deductions if you count yourself as a hobby, or to try and pass yourself off as a business if you're actually not.

The good advice is to claim it all as hobby income and pay the appropriate taxes on it, unless you pay a qualified accountant or tax advisor who recommends you treat them as capital gains investments (and is willing to attest to that). Or file as a business if you really are a business.

If you're not a business, register as a business tomorrow and start tracking all your expenses so that you can file properly next year. Don't just flip flop year to year based on what saves you the most money.

REMEMBER: IF YOU GET AUDITED, THE IRS IS LOOKING AT PREVIOUS YEARS TAXES AS WELL!

Thank you. Sounds like the easiest path when filing your own taxes.

H&R Block Tax software shows a spot under "Other Income" where you can enter non-profit activity income (and in parenthesis it says "e.g. hobby income"). I'm guessing put the 1099-K total from Box1a in there and be done with it. Don't try to subtract any of the fees or sales tax of shipping, eh? I'm not seeing any other logical place for the 1099-K amount to go.

Soxfan26 · 01-24-2021, 06:19 PM

Quote:

Originally Posted by mjohnatgt

No, but you should actually be operating a business. Again, people should consult and pay for good advice, and not just trust crap on message boards.

I think this is a very specific question that pertains to mostly everyone here the same way though. I think the discussion is warranted.

mjohnatgt · 01-24-2021, 06:19 PM

Yeah, the past few years I've just been calling it "Miscellaneous Antique Sales" and putting in the amount I received.

Soxfan26 · 01-24-2021, 06:27 PM

Quote:

Originally Posted by mjohnatgt

Yeah, the past few years I've just been calling it "Miscellaneous Antique Sales" and putting in the amount I received.

There is a section for Miscellaneous Form 1099-Misc, but this would be different I believe.

I'm looking at last year's H&R program. Then the other section, as I mentioned above, is "Income Not Reported Elsewhere", and there's a line for "Non-Profit Activity Income". Doesn't say anything about 1099-K or allow you to add a description.

Perhaps H&R Block will update their software this year to account for this.

Cavaliercards · 01-24-2021, 06:34 PM

From IRS

Question
How do you distinguish between a business and a hobby?
Answer

In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is an activity not done for profit. This includes activities done mainly for sport, recreation, or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:

Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
Whether you have personal motives in carrying on the activity.
Whether the time and effort you put into the activity indicate you intend to make it profitable.
Whether you depend on income from the activity for your livelihood.
Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
Whether you were successful in making a profit in similar activities in the past.
Whether the activity makes a profit in some years and how much profit it makes.
Whether you can expect to make a future profit from the appreciation of the assets used in the activity.

Soxfan26 · 01-24-2021, 06:44 PM

Depend on the income for your livelihood?

Not in my case. This is fun money, online garage sale.

So, hobby I guess.

monkeymcgee · 01-24-2021, 06:44 PM

Tacking onto Cav's post, per the IRS, you can't intermingle your "personal collection" and your card business inventory.

coachnip13 · 01-24-2021, 07:27 PM

Quote:

Originally Posted by Soxfan26

Depend on the income for your livelihood?

Not in my case. This is fun money, online garage sale.

So, hobby I guess.

That's what the IRS wants. Same income, fewer deductions.

coachnip13 · 01-24-2021, 07:28 PM

Quote:

Originally Posted by hatchd

This little equation will answer 93.7% of the questions in this thread:

Beginning Inventory
+ Purchases
- Ending Inventory
= Cost of Goods Sold

Half of these cats didn't even know income tax was a thing until yesterday. You think they had an accurate inventory on January 1, 2020?

mjohnatgt · 01-24-2021, 07:31 PM

Quote:

Originally Posted by coachnip13

That's what the IRS wants. Same income, fewer deductions.

The IRS wants you to follow the tax law and get every deduction you're entitled to. It's even in their training courses for Voluntary Income Tax Advisors. They DO NOT want you to claim deductions you're not entitled to. The money doesn't go to the IRS employees; it goes into the Federal Treasury, who has paid 80% of Americans thousands of dollars that it had to print. So it's definitely the year for them to confirm they're getting what the American taxpayers owe.

3of5-2 · 01-24-2021, 07:35 PM

Quote:

Originally Posted by coachnip13

Half of these cats didn't even know income tax was a thing until yesterday. You think they had an accurate inventory on January 1, 2020?

I've been telling these new players and flippers that line up at Walmart and Target for months now, you better be holding some of that money back, because the IRS is coming for it.

01-24-2021, 06:34 PM	#144
Cavaliercards Member Join Date: Aug 2009 Location: Charlottesville, VA Posts: 30,889 cavaliercards	From IRS Question How do you distinguish between a business and a hobby? Answer In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is an activity not done for profit. This includes activities done mainly for sport, recreation, or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit: Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records. Whether you have personal motives in carrying on the activity. Whether the time and effort you put into the activity indicate you intend to make it profitable. Whether you depend on income from the activity for your livelihood. Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business). Whether you or your advisors have the knowledge needed to carry on the activity as a successful business. Whether you were successful in making a profit in similar activities in the past. Whether the activity makes a profit in some years and how much profit it makes. Whether you can expect to make a future profit from the appreciation of the assets used in the activity. __________________ Always Buying: Vintage and Tobacco Cards Follow us on Twitter AND Instagram: @Cavaliercards

01-24-2021, 05:25 PM	#126
mjohnatgt Member Join Date: Apr 2015 Location: Niceville, FL Posts: 14,770 mjohnatgt mjohnatgt	Still a LOT of bad advice being given. Basically, if this thread is your plan to file your taxes, get a new plan.

01-24-2021, 05:35 PM	#127
nerdherd020 Member Join Date: Apr 2011 Location: Southern California Posts: 2,098	Curious about those doing your own taxes... which tax software do you use? I’ve been using TaxAct for several years now but am thinking of switching. TurboTax seems to be the most popular. Which one do you use and your opinion on it?

01-24-2021, 05:52 PM	#132
Sprewell8 Member Join Date: Jun 2013 Posts: 143	What if you know exactly what you bought something for that you just sold, but have no old receipts demonstrating what you bought it for?

01-24-2021, 05:55 PM	#134
mjohnatgt Member Join Date: Apr 2015 Location: Niceville, FL Posts: 14,770 mjohnatgt mjohnatgt	The bad advice is to start making deductions if you count yourself as a hobby, or to try and pass yourself off as a business if you're actually not. The good advice is to claim it all as hobby income and pay the appropriate taxes on it, unless you pay a qualified accountant or tax advisor who recommends you treat them as capital gains investments (and is willing to attest to that). Or file as a business if you really are a business. If you're not a business, register as a business tomorrow and start tracking all your expenses so that you can file properly next year. Don't just flip flop year to year based on what saves you the most money. REMEMBER: IF YOU GET AUDITED, THE IRS IS LOOKING AT PREVIOUS YEARS TAXES AS WELL!

01-24-2021, 06:03 PM	#136
hatchd Member Join Date: Aug 2014 Posts: 1,698	This little equation will answer 93.7% of the questions in this thread: Beginning Inventory + Purchases - Ending Inventory = Cost of Goods Sold

01-24-2021, 06:19 PM	#142
mjohnatgt Member Join Date: Apr 2015 Location: Niceville, FL Posts: 14,770 mjohnatgt mjohnatgt	Yeah, the past few years I've just been calling it "Miscellaneous Antique Sales" and putting in the amount I received.

01-24-2021, 06:44 PM	#145
Soxfan26 Member Join Date: Nov 2019 Posts: 331	Depend on the income for your livelihood? Not in my case. This is fun money, online garage sale. So, hobby I guess.

01-24-2021, 06:44 PM	#146
monkeymcgee Member Join Date: Apr 2010 Location: VA Posts: 10,974	Tacking onto Cav's post, per the IRS, you can't intermingle your "personal collection" and your card business inventory.