StockX and GOAT will die out for sellers due to Biden's American Rescue Plan Act

[Deleted member 42060]

Basically no other way to avoid paying taxes on things 600 and up. If you wanna list everything $599 and under, then that’s an option . Still if it adds up to $20G you will get the 1099K.

 

[superblytrife]

^ Isn’t it $600 or more for ALL sales that triggers the 1099? So you could sell 100 items with total sales under $600 and not get a 1099, or 1 item for over $600 and get a 1099. That’s how I understand it anyways.

Whatever the case this law sucks. Should’ve sold some of my high dollar **** last year.

 

[aepps20]

This is why Sleepy Joseph isn't my President and isn't yours either.

 

[Raji Lowenthal]

1099 already generated for this year already lol. 600 is nothing..
What's the 1099 need to look like to be considered a real job? Asking for a friend.

 

[SAINIDIIvIIAINI]

You guys are missing the rules. Its $600 total profit period in a year no matter how many transactions it is. See below

Example 1:
I buy a shoe for $100. I in turn sell this shoe for $500 and say thats all I did for the entire year. If I can show proof that I paid $100 for said shoe technically all I'm liable to pay taxes on the $400 profit. BUT, since the new threshold for reporting/paying taxes is $600 I can be lawless and not pay those taxes on $400.

Example 2:
I buy a shoe for $100. I in turn sell this shoe for $701. I show proof I bought the shoe for $100 now with a profit of $601 I will get a 1099 from whatever entity is responsible for giving me the 1099 and I will have to pay taxes on $601.

edit: The 20k a year and/or 200 transactions is null and void. Doesn't exist anymore. $600 a year and doesn't matter how many transactions you WILL pay taxes.

 

[oh you mad]

Did that one proposal go through? The one about banks having to report deposits over $600 to the feds?

Imagine doing time for evading uncle sam on a lil sneaker flip.

 

[SAINIDIIvIIAINI]

Did that one proposal go through? The one about banks having to report deposits over $600 to the feds?

Imagine doing time for evading uncle sam on a lil sneaker flip.

I read that didn't go through and its back to 10K.

 

[heelsandeers]

So if I sold something for $x that I paid $x for then Would I have to have original receipts? How does that work since it should only be on profit right?

Not sure if it's schedule c or another form

but you should be able to subtract cost of goods for a net taxable amount

 

[Raji Lowenthal]

Did that one proposal go through? The one about banks having to report deposits over $600 to the feds?

Imagine doing time for evading uncle sam on a lil sneaker flip.

Cant even work and get a paycheck without the bank reporting in that case. 600 will never fly, too much red tape.

 

[heelsandeers]

https://www.irs.gov/pub/irs-pdf/i1099k.pdf

New Form 1099 Reporting Coming in 2022

Reporting rules are changing for certain businesses beginning in 2022. Debbie Pflieger of EY’s Financial Services Organization, highlights what you need to know about Form 1099-K, Payment Card and Third-Party Network Transactions.

news.bloombergtax.com

It passed...

 

[superblytrife]

Not sure if it's schedule c or another form

but you should be able to subtract cost of goods for a net taxable amount

Yep, you can do this. And I’ll do it in order to avoid paying taxes. But man—what a ****ing hassle for the average person who just wants to clear out some older items. I have no intention of reselling anything for profit, personally. If I make $$ over what I paid that’s cool, but all I really want to do is sell **** I no longer wear to buy new ****.

And I realize we all should’ve been reporting this income all along. But it just doesn’t feel right paying taxes on stuff I already paid taxes on, that I’m selling to buy more stuff that I’ll pay taxes on. Especially with that low *** $600 threshold. 600 bones FOR A YEAR? Wild.

 

[plansb]

Yep, you can do this. And I’ll do it in order to avoid paying taxes. But man—what a ****ing hassle for the average person who just wants to clear out some older items. I have no intention of reselling anything for profit, personally. If I make $$ over what I paid that’s cool, but all I really want to do is sell **** I no longer wear to buy new ****.

And I realize we all should’ve been reporting this income all along. But it just doesn’t feel right paying taxes on stuff I already paid taxes on, that I’m selling to buy more stuff that I’ll pay taxes on. Especially with that low *** $600 threshold. 600 bones FOR A YEAR? Wild.

Yeah I feel the same way. I have a good amount of old stuff I want to clear out (shoes and other ****) but it’s not really worth much more than I paid (sometimes less than I paid). Really just want to clear up space and get some of my money back at the same time. I should have taken care of it last year but was lazy.

 

[oh you mad]

https://www.irs.gov/pub/irs-pdf/i1099k.pdf

New Form 1099 Reporting Coming in 2022

Reporting rules are changing for certain businesses beginning in 2022. Debbie Pflieger of EY’s Financial Services Organization, highlights what you need to know about Form 1099-K, Payment Card and Third-Party Network Transactions.

news.bloombergtax.com

It passed...

It was another proposal in addition to this..

Biden admin backs down on tracking bank accounts with over $600 annual transactions

The Biden administration has backed down on a proposal to collect banking information on accounts with transactions over $600 per year.

abcnews.go.com

 

[heelsandeers]

Oh yeah, I forgot they floated that one. Very dumb all around

The IRS can barely keep up as is

 

[frankmatthews]

Not sure you can file a schedule C without having a registered business, like an llc. I file schedule C but I have an llc and the form asks for your registered business name as well as a code for the type of business you run. I would check with your tax person but I dont think individuals filing a 1040 without an llc are able to deduct cost of goods anywhere on the form. You can itemize deductions and pull out the costs there but its a headache and usually not better than just taking the standard deduction. So it basically means you are on the hook for the full amount of your sales, not just the profit portion.

In reality, a couple thousand on a 1099 is not gonna affect the amount of taxes you owe that much, depends on your other income. That said, if you're worried about it going forward just register an llc for yourself, it will definitely be worth the minimal costs if you're sellling a lot. You can deduct all your selling related expenses and cost of goods, then carry the profit over to your 1040 AND take the standard deduction off of that.

 

[KanyIZZY]

Lol I used to keep my Kane in the car but then I switched to a truck and it seemed kinda pointless (I was also getting old).

Happy belated founders day to you too btw. YO!

 

[KanyIZZY]

Not sure you can file a schedule C without having a registered business, like an llc. I file schedule C but I have an llc and the form asks for your registered business name as well as a code for the type of business you run. I would check with your tax person but I dont think individuals filing a 1040 without an llc are able to deduct cost of goods anywhere on the form. You can itemize deductions and pull out the costs there but its a headache and usually not better than just taking the standard deduction. So it basically means you are on the hook for the full amount of your sales, not just the profit portion.

In reality, a couple thousand on a 1099 is not gonna affect the amount of taxes you owe that much, depends on your other income. That said, if you're worried about it going forward just register an llc for yourself, it will definitely be worth the minimal costs if you're sellling a lot. You can deduct all your selling related expenses and cost of goods, then carry the profit over to your 1040 AND take the standard deduction off of that.

This sounds like the way.. or the closest thing I've come across to any practical solution outside of craigslist and FB. You mentioned selling a lot.. at what point would this be 'worth' it to do??

I have no sincere interest in being a reseller with an actual LLC on top of that but if it helps me recoup and save as much on the front end/tax side of it.. I have to consider this. But I'm not literally running a side business and raking in the dollars all year long lol.

 

[heelsandeers]

Not sure you can file a schedule C without having a registered business, like an llc. I file schedule C but I have an llc and the form asks for your registered business name as well as a code for the type of business you run. I would check with your tax person but I dont think individuals filing a 1040 without an llc are able to deduct cost of goods anywhere on the form. You can itemize deductions and pull out the costs there but its a headache and usually not better than just taking the standard deduction. So it basically means you are on the hook for the full amount of your sales, not just the profit portion.

In reality, a couple thousand on a 1099 is not gonna affect the amount of taxes you owe that much, depends on your other income. That said, if you're worried about it going forward just register an llc for yourself, it will definitely be worth the minimal costs if you're sellling a lot. You can deduct all your selling related expenses and cost of goods, then carry the profit over to your 1040 AND take the standard deduction off of that.

I wasn't sure about that either. Here's what the IRS says about 1099-NECs. I think 1099-Ks would be similar:

• If you're not an employee of the payer, and you're not in a self-employed trade or business, you should report the income on line 8i of Schedule 1 (Form 1040), Additional Income and Adjustments to Income PDF and any allowable expenses on Schedule A (Form 1040), Itemized Deductions. Refer to Not for Profit Activities in Chapter 1 of Publication 535, Business Expenses for allowable nonbusiness expenses.

Looks like if it can be considered a "not for profit activity" you're able to determine the gross income by subtracting cost of goods sold

 

[Public Enemy]

So if you're not a business and just selling some extra whatever (a microwave, a bike, a tv), and you sell the microwave for 200, the bike for 300 and the tv for 400, does that push you over the $600 and you thus have to report that and pay taxes on it? (if it makes it relevant, lets say you bought the microwave for $50, bike $100, tv $100)

That's what this says right

"Now, as the result of a provision in the American Rescue Plan Act of 2021, if a TPSO—or its electronic payment facilitator, or EPF—makes payments totaling more than $600 in a calendar year to a payee, it will be required to report those payments on a Form 1099-K."​

 

[plansb]

So if you're not a business and just selling some extra whatever (a microwave, a bike, a tv), and you sell the microwave for 200, the bike for 300 and the tv for 400, does that push you over the $600 and you thus have to report that and pay taxes on it? (if it makes it relevant, lets say you bought the microwave for $50, bike $100, tv $100)

That's what this says right

"Now, as the result of a provision in the American Rescue Plan Act of 2021, if a TPSO—or its electronic payment facilitator, or EPF—makes payments totaling more than $600 in a calendar year to a payee, it will be required to report those payments on a Form 1099-K."​

I think if you’re selling that kind of stuff for cash locally via fb marketplace or Craigslist or whatever then you don’t have to worry about it. It’s the electronic transactions for goods/services where they’ll get you.

 

[Air Champa]

That's crazy they wanted to do the $600 thing for banks transactions also.

I guess I'll just have to pay the price for being lazy and not unloading as much as I wanted last year.

 

[Bubbletea]

Does this mean if I keep my sales in goat credits I won’t get hit with 1099?

 

[frankmatthews]

This sounds like the way.. or the closest thing I've come across to any practical solution outside of craigslist and FB. You mentioned selling a lot.. at what point would this be 'worth' it to do??

I have no sincere interest in being a reseller with an actual LLC on top of that but if it helps me recoup and save as much on the front end/tax side of it.. I have to consider this. But I'm not literally running a side business and raking in the dollars all year long lol.

I think I paid $50 one time fee to register an llc (depends on your state) so I think its definitely worth it going forward if you anticipate getting 1099 next year or any following years. Hard to say at what $ amount it would pay off, lot of variables.

 

[frankmatthews]

I wasn't sure about that either. Here's what the IRS says about 1099-NECs. I think 1099-Ks would be similar:

• If you're not an employee of the payer, and you're not in a self-employed trade or business, you should report the income on line 8i of Schedule 1 (Form 1040), Additional Income and Adjustments to Income PDF and any allowable expenses on Schedule A (Form 1040), Itemized Deductions. Refer to Not for Profit Activities in Chapter 1 of Publication 535, Business Expenses for allowable nonbusiness expenses.

Looks like if it can be considered a "not for profit activity" you're able to determine the gross income by subtracting cost of goods sold

Unfortunately I think the payment processor decides which 1099 form they file for you. But like I said, the above indicates you would need to itemize deductions to get the cost of goods subtracted out. But since the standard deduction for single people in 2022 is $12,950, you would need receipts for qualifying deductions greater than that amount for itemizing to have any benefit. And trust me, its a headache putting together all those receipts. But again, with an llc you can subtract your costs and expenses right off the top line AND still get standard deductions after that.

 

[WASHED KING]

I dumped at least 20+ pairs the last few months of the year for the very reason. I blame all the “sneaker invest” crowd. Can’t throw that “I” word around things and not expect the IRS to come along for their cut.