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Sellers Requesting PayPal Friends and Family

for what it's worth, in the event those 1099s do ever come to fruition [i've been selling online for a longgg time and never encountered one with paypal], you can write off basically all business oriented expenses. labels, supplies, hell even the membership fee for this forum. any sort of 'receipts' for purchase, whether it be from another member/ebay/etc can be used to write off the incurred 1099 balance owed. any valid tax-prep person would be able to take care of this and if you do your own taxes, you really only need to worry about physical receipts to be delivered in the event of an audit.

i think the entire subject of the 2022 1099-k fiasco is kind of blowing out of proportion. i did read talks of them revising it but we'll see if it really actually happens. zelle/venmo/cashapp all are viable as well but i am still a strong proponent of paypal g&s covering your ass. as others said in previous pages, f/f with that large of a sum of money could bite you in the ass. and nonetheless, no matter what paypal type you use, ALWAYS use a linked credit card for added security.

It applies to ALL payment processors including Zelle, cash app and venmo
 
It applies to ALL payment processors including Zelle, cash app and venmo
zelle is bank-to-bank so there is no real payment processor or middle man in this situation like cashapp/venmo. it'll be fine to use. that means it would be somebody like BOFA sending you a 1099, which unless it's changed... was something like after a 10,000$ deposit IIRC?

the venmo misconception is one i see often online in the other groups i'm in. it will ONLY apply to those who mark venmo with that 'Paying for a good or service?' button, which i honestly feel like nobody has ever used. personal transactions on venmo, like zelle, will also be clear to use.
 
zelle is bank-to-bank so there is no real payment processor or middle man in this situation like cashapp/venmo. it'll be fine to use. that means it would be somebody like BOFA sending you a 1099, which unless it's changed... was something like after a 10,000$ deposit IIRC?

the venmo misconception is one i see often online in the other groups i'm in. it will ONLY apply to those who mark venmo with that 'Paying for a good or service?' button, which i honestly feel like nobody has ever used. personal transactions on venmo, like zelle, will also be clear to use.
Can you imagine sending money through zelle when you split the check from the restaurant on weekends and at the end of the year they ask you to pay taxes for that as well? 😢 RIDICULOUS
 
Others have explained this better but the point is that in addition to any immediate costs/taxes/fees at time of transaction, at the end of the year the seller is responsible for 100% of the profit to be on their IRS income tax, if they are a US citizen.

So if I sold something for $600 on PayPal goods and services, even if that is at a loss, unless I have my original receipt and fill out enough paperwork the IRS assumes that all $600 was 100% profit (assumes my original cost was $0) and I’ll owe an extra ~20% or ~$120 at the end of the year.

If I misunderstand something, someone please correct me. This is new legislation effective the beginning of 2022 for US citizens
If I decide to sell anything, I will just be doing cash transaction in person. It'll limit me, but I am not paying taxes like this hobby is actual "income". Technically, the law states this should have been happening already. It's the new administration requiring the 1099 for $600 and more. It's another way to get taxes from middle class people who just do **** for fun.
"Rich" people already know how to work the tax system and poorer folks probably aren't selling through PP and other cash aps, if at all.
 
While digging around in ebay, they are pushing folks to send a letter to congress and have even made a little GUI that does this for you...Link is below. It automatically sent this to my PA representatives


 
While digging around in ebay, they are pushing folks to send a letter to congress and have even made a little GUI that does this for you...Link is below. It automatically sent this to my PA representatives


@Atticus I think this last URL deserves its own post and I think all of us should fill out the form. Let’s petition congress to change the ridiculous $600 threshold.
 
Just another way to capture what the government perceives as lost taxation revenue with the growth of p2p marketplaces for used merchandise. Ugh freaking stinks .

I wonder what peeps do in the luxury watch resale market . Having to pay taxes on a $10k -$30k item would suck hairy moose knuckle balls
 
Just another way to capture what the government perceives as lost taxation revenue with the growth of p2p marketplaces for used merchandise. Ugh freaking stinks .

I wonder what peeps do in the luxury watch resale market . Having to pay taxes on a $10k -$30k item would suck hairy moose knuckle balls
Would you really trust buying a watch in that price range from an individual? I would just rather go to a store that has an ebay account. I've done it before and you can also use crown&caliber
 
Here is the response from Casey in PA...He's Dem, IIRC. I bolded a section that may be a bit of a reprieve, but I'll be surprised if it happens...

--------------------------------------------------------------------------------------------------------
Thank you for taking the time to contact me about recent changes to reporting requirements for Third-Party Settlement Organizations (TPSOs). I appreciate hearing from you about this issue.

I proudly supported the American Rescue Plan Act, Public Law Number 117-2, which included significant expansions of tax cuts that supported workers, families and children. This legislation dramatically expanded the Child Tax Credit, the Child and Dependent Care Tax Credit and the Earned Income Tax Credit. I believe that these investments have been essential to our efforts to help millions of families weather the pandemic, and keep our economy and small businesses afloat.

As you've noted, section 9674 of the American Rescue Plan adjusted reporting requirements for third-party payment networks and de minimis reporting thresholds for TPSOs. Section 9674 lowered the reporting threshold from $20,000 to $600 annually and eliminated the threshold requiring the number of annual transactions to exceed 200. Under these new thresholds, contractors for app-based companies, like Uber and Lyft, or those who sell goods on marketplaces, like Etsy and eBay, will receive a Form 1099-K for any income they received via credit card or third-party payment services, which they can use when doing their taxes at the end of the year.

These changes were made to simplify reporting requirements, improve tax compliance and make it easier and simpler for everyday taxpayers to do their taxes. Today, filing taxes can be difficult for self-employed individuals because the large businesses or apps that they utilize do not provide them information on total payments and tax liabilities at the end of the year. This can make record-keeping for individual self-employed people very complex and time-consuming, and can expose them to costly and time-consuming audits if records are not kept correctly. The Internal Revenue Service (IRS) estimates that when third parties do not provide information to the IRS, 63 percent of income is misreported. To give individuals more information about their own finances, many states have begun requiring third-parties to provide information reports after transactions exceed $600. This law brings the entire United States to a similar standard.

As a transitional measure, the Build Back Better Act, which Congress is currently considering, reimposes the 200-transaction threshold for 2022. This is meant to acknowledge that some third-party payers will need time to adjust as these new rules are applied to the nation as a whole. While the details of the bill have not yet been finalized, please be assured that I will keep your thoughts in mind as I consider any further changes to reporting requirements for TSPOs.

As a member of the Senate Finance Committee, I will continue to fight for a tax code that is fair and equitable for all Pennsylvanians and all Americans. I am committed to modernizing our tax code so that it keeps pace with new technologies and emerging markets, leaving no opportunities for exploitation of the working class and making sure that the wealthy and large corporations pay their fair share.

Again, thank you for sharing your thoughts with me. Please do not hesitate to contact me in the future about this or any other matter of importance to you.

For more information on this or other issues, I encourage you to visit my website, https://casey.senate.gov. I hope you will find this online office a comprehensive resource to stay up-to-date on my work in Washington, request assistance from my office or share with me your thoughts on the issues that matter most to you and to Pennsylvania.

Sincerely,
Bob Casey
United States Senator
 

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