How have you handled payments with the new PayPal rules?

[bthomas515]

I have a bunch of groups I need to sell (etap 11’s, hydro ultegra and 105) that are going to be a bit of $$$. I’ve sold a few cheaper things using Venmo and such. Being that these are going to a bit more money, I am seeing if there’s any alternative or way that y’all have found with PayPal and 1099’s?

I am on a work and scholarship for school which doesn’t allow secondary jobs so I’m a little extra uneasy about random 1099’s.

[BRad704]

I've just kept rolling through bikes and parts like it was 2021. Mostly G&S sales if I don't know the person, or F&F if it really is a Friend or Family or a local Memphian who might have been paying cash anyway... If I'm going to get audited, I'll be able to show purchase history for 95% of everything I've sold and at that point I'm not "making money" anyway.

[tellyho]

I get the 1099, I pay the taxes. The end.

[bthomas515]

Originally Posted by BRad704

I've just kept rolling through bikes and parts like it was 2021. Mostly G&S sales if I don't know the person, or F&F if it really is a Friend or Family or a local Memphian who might have been paying cash anyway... If I'm going to get audited, I'll be able to show purchase history for 95% of everything I've sold and at that point I'm not "making money" anyway.

Do you plan to show purchase history for stuff you’ve bought used?

[fa63]

I have no issues with using Friends & Family when dealing with reputable forum members.

[prototoast]

Originally Posted by bthomas515

Do you plan to show purchase history for stuff you’ve bought used?

He's probably not planning on being audited, because only an extremely small portion of taxpayers are audited, but assuming he were, if you buy and sell most things online, it's not terribly hard to come up with receipts.

[ap_az]

Keep in mind that while you have to pay tax on 1099 income you get to deduct cost of good sold (and cost of sale) prior to calculating your adjusted gross income.

In other words, if you paid $2000 for an item and sell it for $1000 then you aren't going to owe any taxes on the transaction. I plan to hand my accountant the 1099 along with a roll-up amount for the cost of goods and sale. I'll be able to back this up with documentation if needed, but the documentation isn't required to be submitted with the return.

This law isn't about going after people cleaning out their garage via online sales as the IRS knows that those people aren't actually _making_ money doing that. This is all about catching service providers who use these apps to provide a convenient payment mechanism, but have historically under-reported income.

[Ralph]

Originally Posted by ap_az

Keep in mind that while you have to pay tax on 1099 income you get to deduct cost of good sold (and cost of sale) prior to calculating your adjusted gross income.

In other words, if you paid $2000 for an item and sell it for $1000 then you aren't going to owe any taxes on the transaction. I plan to hand my accountant the 1099 along with a roll-up amount for the cost of goods and sale. I'll be able to back this up with documentation if needed, but the documentation isn't required to be submitted with the return.

This law isn't about going after people cleaning out their garage via online sales as the IRS knows that those people aren't actually _making_ money doing that. This is all about catching service providers who use these apps to provide a convenient payment mechanism, but have historically under-reported income.

Yes....There are many full time online merchants who pay little or no income tax. This IRS rule is designed to make it harder to be a full time merchant and avoid paying income taxes on your full time business. It's not designed to stop us from cleaning our our garage.

[citycyclist247]

Included the potential taxes in the sale price of a frame I listed(& thankfully sold).

[BRad704]

Originally Posted by bthomas515

Do you plan to show purchase history for stuff you’ve bought used?

If needed, sure. Below posts covered my thoughts pretty well already.

Originally Posted by prototoast

He's probably not planning on being audited, because only an extremely small portion of taxpayers are audited, but assuming he were, if you buy and sell most things online, it's not terribly hard to come up with receipts.

Originally Posted by ap_az

Keep in mind that while you have to pay tax on 1099 income you get to deduct cost of good sold (and cost of sale) prior to calculating your adjusted gross income.

In other words, if you paid $2000 for an item and sell it for $1000 then you aren't going to owe any taxes on the transaction. I plan to hand my accountant the 1099 along with a roll-up amount for the cost of goods and sale. I'll be able to back this up with documentation if needed, but the documentation isn't required to be submitted with the return.

This law isn't about going after people cleaning out their garage via online sales as the IRS knows that those people aren't actually _making_ money doing that. This is all about catching service providers who use these apps to provide a convenient payment mechanism, but have historically under-reported income.

[sheepbleat]

Originally Posted by tellyho

I get the 1099, I pay the taxes. The end.

^

[robt57]

Originally Posted by Ralph

It's not designed to stop us from cleaning our our garage.

For me/IMO the point is thrusting the responsibility and work [or paying accountant to itemize] for the ridiculous low threshold of 600.00. 6000.00 I could understand to move the line outside a reasonable personal item value arena, just IMO.

Having to substantiate tax revenue on personal items I paid for with post income tax revenue is the bridge too far. I understand what you need to do, first business started @ 23 years old. I've been an employee after that far less than I was prior to that since, retired now.

Yada...

I am out, they lost a 25 year paypal accnt. I am sure they care not.

I will say it surprised me it was plug and play one click operation. I fully expected the shell game for the task..

[zennmotion]

Originally Posted by fa63

I have no issues with using Friends & Family when dealing with reputable forum members.

+1. I always offer F&F as a buyer. I don't sell much and I've never had an issue, but if this were a problem for a buyer, I'd just find another buyer, sell locally for cash or donate the item to my local co-op. For larger transactions, there are other means, somehow we had an economy and a market before PayPal. On the other hand, if your buying and selling starts to look like something more like collecting or a side gig for income generation, then yeah, you should probably suck it up and pay to play.

[KonaSS]

Originally Posted by robt57

For me/IMO the point is thrusting the responsibility and work [or paying accountant to itemize] for the ridiculous low threshold of 600.00. 6000.00 I could understand to move the line outside a reasonable personal item value arena, just IMO.

Having to substantiate tax revenue on personal items I paid for with post income tax revenue is the bridge too far. I understand what you need to do, first business started @ 23 years old. I've been an employee after that far less than I was prior to that since, retired now.

Yada...

I am out, they lost a 25 year paypal accnt. I am sure they care not.

I will say it surprised me it was plug and play one click operation. I fully expected the shell game for the task..

This is an IRS reporting requirement. It seems like you are blaming Paypal. Call your congress person if you want to be angry at someone.

[robt57]

Originally Posted by KonaSS

This is an IRS reporting requirement. It seems like you are blaming Paypal.

Clearer maybe: I am not blaming anyone, just why I am done. PP was the only mechanism I was using and stopped for the stated reasons. There is a little "get off my lawn" component to be sure, maybe more than a little.

Call your congress person if you want to be angry at someone.

LOL, talk about "get off my lawn". At least I could be angry to a person instead of a corp. I would not waste my breath calling a congressional tool.

Not my circus, not my monkeys. I'll just 'get off my lawn' along venting on forums. #WAH!