That plan was postponed, and will hopefully be cancelled entirely.

Here's the latest:

As a result of taxpayer confusion, lack of clear guidance, concerns about the existing backlog, and impact on the upcoming filing season, industry and stakeholders urged the IRS to postpone the implementation of the new reporting requirements of the Forms 1099-K. Good news: The IRS listened, and on Friday, December 23, the IRS issued Notice 2023-10 delaying the requirement for electronic payment networks to report transactions over $600 to the IRS on a Form 1099-K, Payment Card and Third Party Network Transactions, until 2024.

Key Points:
The IRS is delaying lowering the threshold for Form 1099-K reporting by a year. The $20,000 and 200 transactions thresholds remain in place through December 31, 2023.
The rules for reporting income are not changing. Anybody receiving taxable income paid through third-party networks must still track and report their taxable income.

Additional details can be found on: www.taxpayeradvocate.irs.gov under news.

It's still a potential issue, but even if it goes into effect, a seller has always been required to report income.  This would definitely add to the red tape for businesses that would have to report sales transactions, and force people that weren't reporting the income to do so at a lower threshold.

It was supposedly intended to close a loophole that "businesses" were exploiting, but it's really about capturing all that untapped taxable income from $600-20,000, which represents a lot of people that are just trying to get by, and are probably not reporting it.  The worst part is tracking inventory costs vs. the actual sales prices.  For anyone that has a business, this can be a lot of work, and it would likely cause an enormous amount of confusion for the casual seller.  Many sellers could end up paying more in taxes than they should, if they don't take into account the original cost of the goods sold.

dbartman wrote in Selling and Taxes:It was supposedly intended to close a loophole that "businesses" were exploiting, but it's really about capturing all that untapped taxable income from $600-20,000, which represents a lot of people that are just trying to get by, and are probably not reporting it.  The worst part is tracking inventory costs vs. the actual sales prices.  For anyone that has a business, this can be a lot of work, and it would likely cause an enormous amount of confusion for the casual seller.  Many sellers could end up paying more in taxes than they should, if they don't take into account the original cost of the goods sold.

I think a lot of people bookend the years (selling December into January) to get 2 tax year benefits.  I know I would.  I used to think 20k was an impossible sum to reach but in today's environment, that could be less than 100 sales and could pose a huge deterrent to someone 'cashing out', when you know the government will want its 20-30%. The $600 limit guarantees, the feds get their pound of flesh. I guess eBay purchase emails could constitute a receipt?  

-SKA

Considering the fact that our annual "raise the debt limit ceiling" event is coming up, I have no problems with anyone who skirts taxes. The IRS should be dissolved, it is a bloated money sink. I can't see that happening, accountants and tax firms would puke blood, but it would be better for everyone in the long run.

mbassoc2003 wrote in Selling and Taxes:But if you don't raise the debt ceiling, how will you find the money to house Californians and pick up their faeces?

Easy - the $800 billion California will get from reparations. Multiply that by 50 for all states (less for territories), & there's plenty for everything. Maybe even a new war or two!

MegaTherion wrote in Selling and Taxes:People are making mountains out of molehills. The deductions one can claim can add up quickly....cell phone bill, internet bill, vehicle deduction, cost of inventory, selling fees, promotional fees, shipping supplies, shipping costs (if you do free shipping), storage unit rent (if you have one), home office deductions, there are really quite a few.

To be considered 'self-employed' you only have to make $400. I don't have a tax id #, I'm not incorporated, an LLC or none of that jazz. Just file a Schedule-C (myself, it's not hard)

With the 85,000 armed IRS agents that will be pumped out of the academy, the audit hell one will live through (claiming all these deductions) will be defined by how long they will need to use a donut pillow in order to sit down.

-SKA

ddt58 wrote in Selling and Taxes:Most of the new IRS employees will be customer service or IT.  And a lot of the rest are replacing retiring agents.  The 85,000 armed agents rhetoric is just a scare tactic by the GOP.  That being said, it is a pain in the ass to keep track of the purchase cost of items, unless you are really organized.  For me it would be almost pointless.  Most of my collection was bought new, 40 or more years ago.  When I start selling in a few years, the cost of the sold goods will be negligible compared to the current value.

The effort to increase the IRS budget (which was supposed to drive the @80k employee increase) was defeated in the House shortly after the GOP took the majority last year.  It was reported on briefly but remains in the public record.  While there was certainly fear mongering going on concerning “armed agents going door to door”, the impetus behind the increased budget was a dramatic increase in audits.  That is also public record.