|
 |
| | | Author: | tmxbricks  | | Posted: | Apr 21, 2022 06:53 | | Subject: | New IRS $700 selling threshold | | Viewed: | 313 times | | Topic: | Taxes | |
|
| I saw this article in the WSJ about a new earning reporting requirement the IRS
has for sellers making over $700 a year in sales:
https://www.wsj.com/articles/you-made-700-from-an-online-side-hustle-now-the-irs-will-know-11650015000
Is Bricklink going to send this information about its sellers this year? If so,
I would think it will be a huge change and will make many small time and casual
sellers like myself rethink if it is even worthwhile to continue selling on BL.
|
|
| | | | | |
| | | | | Author: | peregrinator | | Posted: | Apr 21, 2022 06:59 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 100 times | | Topic: | Taxes | |
|
| In General, tmxbricks writes:
BrickLink doesn't process payments so I don't think BL is going to send
anything to the IRS. But PayPal will - and I was under the impression that the
threshold was $600.
The thing is, selling income should be counted as income, and reported on your
tax returns, whether you receive a 1099 from PayPal (or Stripe, etc.) anyway.
|
|
|
| | | | | | | | | |
| | | | | | | Author: | tmxbricks | | Posted: | Apr 21, 2022 07:05 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 80 times | | Topic: | Taxes | |
|
| In General, peregrinator writes:
| | In General, tmxbricks writes:
BrickLink doesn't process payments so I don't think BL is going to send
anything to the IRS. But PayPal will - and I was under the impression that the
threshold was $600.
The thing is, selling income should be counted as income, and reported on your
tax returns, whether you receive a 1099 from PayPal (or Stripe, etc.) anyway.
|
What I don't understand about this though is that I made have earned $20
from a Lego set when I sold it on BL (and got paid through PP), but I might have
bought it for $15 (and already paid tax) two years prior...why am I being taxed
for $20 in earnings rather than the $5 actual earnings. Unfortunately, with this
low of a threshold, it may not be worth the trouble of figuring out (and keeping
receipts) when reselling.
|
|
|
| | | | | | | | | | | | | |
| | | | | | | | | Author: | axaday | | Posted: | Apr 21, 2022 07:46 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 91 times | | Topic: | Taxes | |
|
| In General, tmxbricks writes:
| | What I don't understand about this though is that I made have earned $20
from a Lego set when I sold it on BL (and got paid through PP), but I might have
bought it for $15 (and already paid tax) two years prior...why am I being taxed
for $20 in earnings rather than the $5 actual earnings. Unfortunately, with this
low of a threshold, it may not be worth the trouble of figuring out (and keeping
receipts) when reselling.
|
I totally understand how something starts as a hobby and then entices you into
a bigger scale when you get some money coming in, but this article should serve
as a warning to you to go ahead and figure out if it is worth the trouble for
you, because if you go over the threshold, PayPal is going to tell and you'll
be running the risk of an IRS audit and legal problems. You will be able to
deduct what you paid for the set that you sold, but you need to put it on tax
forms to do that. And if someone at the IRS sees that you have been paid over
the threshold on PayPal and haven't put anything about it on your tax forms,
they're going to contact you to see why.
|
|
|
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Author: | aboyer | | Posted: | Apr 21, 2022 08:29 | | Subject: | (Cancelled) | | Viewed: | 63 times | | Topic: | Taxes | |
|
| | (Cancelled) |
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Author: | SylvainLS | | Posted: | Apr 21, 2022 08:46 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 66 times | | Topic: | Taxes | |
|
| In General, aboyer writes:
| | […]
In H&R Block, on the Deductions page, there’s a single field for hobby expenses.
If you sold a $15 set for $20, you’d put $15 in that field and be done with it.
Presumably TurboTax is similar.
|
Isn’t there a code for each field in your forms?
That’s useful to communicate. We have them in France (things like “2CA” “3VC”).
When we get papers from banks (yearly reports of interests, capital gain, deductible
fees, what we already paid…) or corporations (shareholder dividends…) or anything
that has to be reported, we know where to report/check them on the standard form.
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Author: | aboyer | | Posted: | Apr 21, 2022 08:57 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 53 times | | Topic: | Taxes | |
|
| In General, SylvainLS writes:
| | In General, aboyer writes:
| | […]
In H&R Block, on the Deductions page, there’s a single field for hobby expenses.
If you sold a $15 set for $20, you’d put $15 in that field and be done with it.
Presumably TurboTax is similar.
|
Isn’t there a code for each field in your forms?
That’s useful to communicate. We have them in France (things like “2CA” “3VC”).
When we get papers from banks (yearly reports of interests, capital gain, deductible
fees, what we already paid…) or corporations (shareholder dividends…) or anything
that has to be reported, we know where to report/check them on the standard form.
|
That is true if you are filling out the forms yourself, but no sane American
does so directly. We pay $35-$100/year for tax software that does it for us or
even more for a pro to take care of it.
The US filing system is ridiculous, at least partly on account of lobbying by
an alliance of anti-tax conservatives (who want people to hate the IRS) and the
tax prep companies (who depend on it for their livelihood). The IRS already has
almost all of this information; all they do with your filed return is double-check
that it matches what's already on file.
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Author: | SylvainLS | | Posted: | Apr 21, 2022 09:38 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 38 times | | Topic: | Taxes | |
|
| In General, aboyer writes:
| | […]
That is true if you are filling out the forms yourself, but no sane American
does so directly. We pay $35-$100/year for tax software that does it for us or
even more for a pro to take care of it.
The US filing system is ridiculous, at least partly on account of lobbying by
an alliance of anti-tax conservatives (who want people to hate the IRS) and the
tax prep companies (who depend on it for their livelihood). The IRS already has
almost all of this information; all they do with your filed return is double-check
that it matches what's already on file.
|
Here, it’s been the reverse for a long time: the form is prefilled and you just
check it’s okay or fill the odd field.
As you say, your employer, unemployement agency, pension administration, banks,
etc., already declared everything on their side.
And since a couple years ago, we also have “payment at source”: the taxes are
“paid” by your employer (if you choose so).
Easy-peasy. And it’s a public service, so it’s free. It’s unthinkable to force
people to use paying services for that.
One thing France can be proud of: our tax administration is top notch. They
are very good at collecting taxes and they have the best ideas about creating
new ones.
(Well, I’m not exactly sure I’m that much happy to be proud about the last part
Plus, we export our tax ideas but don’t get any royalties on them  )
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Author: | aboyer | | Posted: | Apr 21, 2022 09:44 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 35 times | | Topic: | Taxes | |
|
| In General, SylvainLS writes:
| | In General, aboyer writes:
| | […]
That is true if you are filling out the forms yourself, but no sane American
does so directly. We pay $35-$100/year for tax software that does it for us or
even more for a pro to take care of it.
The US filing system is ridiculous, at least partly on account of lobbying by
an alliance of anti-tax conservatives (who want people to hate the IRS) and the
tax prep companies (who depend on it for their livelihood). The IRS already has
almost all of this information; all they do with your filed return is double-check
that it matches what's already on file.
|
Here, it’s been the reverse for a long time: the form is prefilled and you just
check it’s okay or fill the odd field.
As you say, your employer, unemployement agency, pension administration, banks,
etc., already declared everything on their side.
And since a couple years ago, we also have “payment at source”: the taxes are
“paid” by your employer (if you choose so).
Easy-peasy. And it’s a public service, so it’s free. It’s unthinkable to force
people to use paying services for that.
One thing France can be proud of: our tax administration is top notch. They
are very good at collecting taxes and they have the best ideas about creating
new ones.
(Well, I’m not exactly sure I’m that much happy to be proud about the last part
Plus, we export our tax ideas but don’t get any royalties on them )
|
I envy you! My federal return for 2021 was 51 pages long, including all of the
worksheets, and I don't even try to claim depreciation on my yacht.* 
* - that I don't own
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Author: | jennnifer | | Posted: | Apr 21, 2022 10:42 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 53 times | | Topic: | Taxes | |
|
| In General, SylvainLS writes:
| | In General, aboyer writes:
| | […]
That is true if you are filling out the forms yourself, but no sane American
does so directly. We pay $35-$100/year for tax software that does it for us or
even more for a pro to take care of it.
The US filing system is ridiculous, at least partly on account of lobbying by
an alliance of anti-tax conservatives (who want people to hate the IRS) and the
tax prep companies (who depend on it for their livelihood). The IRS already has
almost all of this information; all they do with your filed return is double-check
that it matches what's already on file.
|
Here, it’s been the reverse for a long time: the form is prefilled and you just
check it’s okay or fill the odd field.
As you say, your employer, unemployement agency, pension administration, banks,
etc., already declared everything on their side.
And since a couple years ago, we also have “payment at source”: the taxes are
“paid” by your employer (if you choose so).
Easy-peasy. And it’s a public service, so it’s free. It’s unthinkable to force
people to use paying services for that.
|
I should mention here that the vast majority of people who have income that only
comes from their employers or other simple income have a very easy 2 page tax
form. Some deductions for kids, a mortgage, and nothing else fancy: you are done
in ten minutes online. Most everyone can do this and there are lots of free resources
to help.
This 1099 from Paypal that we are talking of you receive for achieving a mere
$600 in total sales. It basically means that your taxes just got a lot more complicated
and now you will need to pay someone or buy a program to do your taxes. That
the threshold was made so low was basically targeting low-income people. It used
to be $20,000 or 200 transactions. Or basically what it would look like if you
are actually running a business. Now it hits anyone who sells too many of their
kid's Pokemon cards on ebay or has a side job selling crafts on etsy.
Jen
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | Author: | SylvainLS | | Posted: | Apr 21, 2022 12:03 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 71 times | | Topic: | Taxes | |
|
| In General, jennnifer writes:
| | […]
I should mention here that the vast majority of people who have income that only
comes from their employers or other simple income have a very easy 2 page tax
form. Some deductions for kids, a mortgage, and nothing else fancy: you are done
in ten minutes online. Most everyone can do this and there are lots of free resources
to help.
|
Oh good. The way people complain (here and elsewhere), it looked like it was
always over-complicated 
| | This 1099 from Paypal that we are talking of you receive for achieving a mere
$600 in total sales. It basically means that your taxes just got a lot more complicated
and now you will need to pay someone or buy a program to do your taxes. That
the threshold was made so low was basically targeting low-income people. It used
to be $20,000 or 200 transactions. Or basically what it would look like if you
are actually running a business. Now it hits anyone who sells too many of their
kid's Pokemon cards on ebay or has a side job selling crafts on etsy.
Jen
|
Here, if you buy to resell or “create” what you sell, then you’re considered
a professionnal and there’s no lower limit to declare but it’s only a couple
of fields more, mostly gross and costs (and you can even choose a “my costs are
71% of the gross” option and not bother with costs).
And if you’re only selling your own old stuff, then you declare nothing (except
single transactions over €5000 (except cars and furniture)).
So there’s still a kind of “it’s all my ‘old’ stuff” loophole that will maybe
be plugged, taking the USA as an example 
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Author: | MidwestBrick | | Posted: | Apr 21, 2022 09:56 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 47 times | | Topic: | Taxes | |
|
| In General, aboyer writes:
| | In General, SylvainLS writes:
| | In General, aboyer writes:
| | […]
In H&R Block, on the Deductions page, there’s a single field for hobby expenses.
If you sold a $15 set for $20, you’d put $15 in that field and be done with it.
Presumably TurboTax is similar.
|
Isn’t there a code for each field in your forms?
That’s useful to communicate. We have them in France (things like “2CA” “3VC”).
When we get papers from banks (yearly reports of interests, capital gain, deductible
fees, what we already paid…) or corporations (shareholder dividends…) or anything
that has to be reported, we know where to report/check them on the standard form.
|
That is true if you are filling out the forms yourself, but no sane American
does so directly. We pay $35-$100/year for tax software that does it for us or
even more for a pro to take care of it.
The US filing system is ridiculous, at least partly on account of lobbying by
an alliance of anti-tax conservatives (who want people to hate the IRS) and the
tax prep companies (who depend on it for their livelihood). The IRS already has
almost all of this information; all they do with your filed return is double-check
that it matches what's already on file.
|
Sorry but I do not agree with this take. For a large percentage of Americans
that just have a W2 and take the standard deduction, yes they know "enough" about
you cause it is easier to track, but for everyone else, no, they do not know
everything about you. They have no idea which purchases are business expenses,
they can not track cash transactions as in they do not know what a payment is
for, so if we would like the American government to tax us based on all cash
flows into our bank accounts, we would all have much higher tax liabilities as
each transaction that increases our balances would get scrutinized to the highest
degree and be assumed to be revenue and taxable, and it would be on every person
to break out what is revenue vs what is not and we would have to trust each other
that friends/family would report the same gifts/trading of cash the same ; which
IMO, would be far worse than it is now.
As an example, imagine going out to dinner with a group of friends, you split
the bill with one person paying the tab and 7 others Venmo you their share to
you. The government would see all those Venmo's as revenue to you and then
2 of the 7 friends want to deduct the payments as expenses cause they want to
cheat the system. It could be an absolute nightmare and it would be.
Or you buy something at a store for $200, use it for a year, end up not liking
it so you sell it for $50 cash, then deposit that cash into your bank and boom,
another item to report as revenue, that you took a loss on (not counting depreciation
here) but the government sees it as revenue to report. An example of how keeping
money out of banks would be a valid tactic to avoid taxation.
For purposes on this topic, when I knew I was going to start selling Lego, I
immediately kept track of every purchase I ever made, every set from a store,
every expense incurred, every cash transaction through craigslist, every mile
driven, etc... to keep records of it all. This is what is expected of any citizen
that is selling anything cause it is the law. Now, there are differences between
a Hobby and Business; of which, I made sure to meet the business criteria to
be able to gain all those deductions. Thousands and thousands of records; thank
god most stores allow us to buy more than 2-3 sets at a time to reduce the paperwork.
For anyone out there that is worried about paying taxes on their revenue here,
report it to the best of your ability and expect the government to know about
it from paypal transactions. In reality, just about every State requires selling
permits, tax to be paid to your home state, and every person should be reporting
every craigslist item sold or facebook marketplace sale, etc... It all falls
under revenue/sales for taxation.
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | Author: | aboyer | | Posted: | Apr 21, 2022 10:03 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 42 times | | Topic: | Taxes | |
|
| In General, MidwestBrick writes:
| | In General, aboyer writes:
| | [..]
The US filing system is ridiculous, at least partly on account of lobbying by
an alliance of anti-tax conservatives (who want people to hate the IRS) and the
tax prep companies (who depend on it for their livelihood). The IRS already has
almost all of this information; all they do with your filed return is double-check
that it matches what's already on file.
|
Sorry but I do not agree with this take. For a large percentage of Americans
that just have a W2 and take the standard deduction, yes they know "enough" about
you cause it is easier to track, but for everyone else, no, they do not know
everything about you. They have no idea which purchases are business expenses,
they can not track cash transactions as in they do not know what a payment is
for, so if we would like the American government to tax us based on all cash
flows into our bank accounts, we would all have much higher tax liabilities as
each transaction that increases our balances would get scrutinized to the highest
degree and be assumed to be revenue and taxable, and it would be on every person
to break out what is revenue vs what is not and we would have to trust each other
that friends/family would report the same gifts/trading of cash the same ; which
IMO, would be far worse than it is now.
[..]
|
Oh, I don't disagree. It's the W-2 / dependents / mortgage interest stuff
that should be automated away. All of the business expense, charitable deductions
etc. forms would need to stay.
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Author: | CPgolfaddict | | Posted: | Apr 22, 2022 00:22 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 56 times | | Topic: | Taxes | |
|
| Yes the IRS system is ridiculous. But not because the IRS already knows almost
everything. For a business the IRS does not have nearly enough information to
calculate accurate income tax owed. They know how much you took in via 1099
statements e.g. from Paypal. (but only if over the threshold). If you sold for
cash...they don't know. Sold and took a barter, they don't know. They
have no idea how much your expenses were either. Deducting home office expenses...IRS
has no idea what your electric bill was for the year, they don't know how
much of your home is used for business etc.
As for who wants to change what the IRS knows, Who is in power when this new
law/rule came about?. So who is it who wants you to hate the IRS? It was also
the liberals who were recently trying to require banks to report every last deposit
over $600. e.g. every paycheck, a Christmas gift check from family, sell a used
car for cash & deposit to the bank... every. last. thing. Make some cash at
a garage sale....everything!! not just your paypal income. Luckily they backed
off this insane requirement.
In General, aboyer writes:
| | In General, SylvainLS writes:
| | In General, aboyer writes:
| | […]
In H&R Block, on the Deductions page, there’s a single field for hobby expenses.
If you sold a $15 set for $20, you’d put $15 in that field and be done with it.
Presumably TurboTax is similar.
|
Isn’t there a code for each field in your forms?
That’s useful to communicate. We have them in France (things like “2CA” “3VC”).
When we get papers from banks (yearly reports of interests, capital gain, deductible
fees, what we already paid…) or corporations (shareholder dividends…) or anything
that has to be reported, we know where to report/check them on the standard form.
|
That is true if you are filling out the forms yourself, but no sane American
does so directly. We pay $35-$100/year for tax software that does it for us or
even more for a pro to take care of it.
The US filing system is ridiculous, at least partly on account of lobbying by
an alliance of anti-tax conservatives (who want people to hate the IRS) and the
tax prep companies (who depend on it for their livelihood). The IRS already has
almost all of this information; all they do with your filed return is double-check
that it matches what's already on file.
|
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | Author: | jennnifer | | Posted: | Apr 21, 2022 09:04 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 45 times | | Topic: | Taxes | |
|
| In General, SylvainLS writes:
| | In General, aboyer writes:
| | […]
In H&R Block, on the Deductions page, there’s a single field for hobby expenses.
If you sold a $15 set for $20, you’d put $15 in that field and be done with it.
Presumably TurboTax is similar.
|
Isn’t there a code for each field in your forms?
That’s useful to communicate. We have them in France (things like “2CA” “3VC”).
When we get papers from banks (yearly reports of interests, capital gain, deductible
fees, what we already paid…) or corporations (shareholder dividends…) or anything
that has to be reported, we know where to report/check them on the standard form.
|
No codes here...just forms, more forms, more worksheets for forms, etc. Only
a tax professional has any chance of getting it right.
However, I believe the issue here is how to account for the value of what you
sold when you bought it for yourself, no longer have a receipt, or never had
a receipt, and have now decided to sell at a small profit. A real business would
understandably keep records. Someone selling an amount of used stuff on ebay
can't be expected to adhere to corporate tax standards. Except now they are.
Jen
|
|
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | Author: | SylvainLS | | Posted: | Apr 21, 2022 09:46 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 33 times | | Topic: | Taxes | |
|
| In General, jennnifer writes:
| | […]
No codes here...just forms, more forms, more worksheets for forms, etc. Only
a tax professional has any chance of getting it right.
However, I believe the issue here is how to account for the value of what you
sold when you bought it for yourself, no longer have a receipt, or never had
a receipt, and have now decided to sell at a small profit. A real business would
understandably keep records. Someone selling an amount of used stuff on ebay
can't be expected to adhere to corporate tax standards. Except now they are.
Jen
|
As you already have codes for forms (1099-k…), I thought you maybe had codes
for fields too.
They can be cryptic too but if you had them, one could say “just add the amount
in field XX in form YY” instead of “you can do that, somewhere, I think, with
this reporting tool, I don’t know for the others… ask your accountant” that we
often see here.
Anyway, just an idea….
|
|
|
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Author: | aboyer | | Posted: | Apr 21, 2022 09:39 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 33 times | | Topic: | Taxes | |
|
| In General, axaday writes:
| | In General, tmxbricks writes:
| | What I don't understand about this though is that I made have earned $20
from a Lego set when I sold it on BL (and got paid through PP), but I might have
bought it for $15 (and already paid tax) two years prior...why am I being taxed
for $20 in earnings rather than the $5 actual earnings. Unfortunately, with this
low of a threshold, it may not be worth the trouble of figuring out (and keeping
receipts) when reselling.
|
I totally understand how something starts as a hobby and then entices you into
a bigger scale when you get some money coming in, but this article should serve
as a warning to you to go ahead and figure out if it is worth the trouble for
you, because if you go over the threshold, PayPal is going to tell and you'll
be running the risk of an IRS audit and legal problems. You will be able to
deduct what you paid for the set that you sold, but you need to put it on tax
forms to do that. And if someone at the IRS sees that you have been paid over
the threshold on PayPal and haven't put anything about it on your tax forms,
they're going to contact you to see why.
|
I removed my earlier reply because it looks like H&R Block and TurboTax disagree
here. Also, the H&R Block deduction is in the 2% section, which means the expense
must exceed 2% of your AGI in order to be deductable. TurboTax claims this deduction
is completely gone for 2018-2025.
On the Intuit community forums (search for "1099-k and eBay sales (no profit)")
there is advice about using the "Personal Property" and "Cost of Personal Property"
fields to negate any garage sale-type income you have. I have no idea what small
BL sellers should do. What a mess.
Andrew
|
|
|
| | | | | | | | | | | | | |
| | | | | | | | | Author: | jennnifer | | Posted: | Apr 21, 2022 08:55 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 76 times | | Topic: | Taxes | |
|
| In General, tmxbricks writes:
| | In General, peregrinator writes:
| | In General, tmxbricks writes:
BrickLink doesn't process payments so I don't think BL is going to send
anything to the IRS. But PayPal will - and I was under the impression that the
threshold was $600.
The thing is, selling income should be counted as income, and reported on your
tax returns, whether you receive a 1099 from PayPal (or Stripe, etc.) anyway.
|
What I don't understand about this though is that I made have earned $20
from a Lego set when I sold it on BL (and got paid through PP), but I might have
bought it for $15 (and already paid tax) two years prior...why am I being taxed
for $20 in earnings rather than the $5 actual earnings. Unfortunately, with this
low of a threshold, it may not be worth the trouble of figuring out (and keeping
receipts) when reselling.
|
I understand how you feel here! They are not actually taxing you on your $20
earnings. They are reporting it, and it's up to you to provide details as
to how much of that is actual income.
There's little correlation between the idea behind this law:
Everyone should report all their income and pay taxes on it!
with the actual implications of how it might work for a home seller/crafter/hobbyist/small
business owner who doesn't have an army of tax professionals at their disposal.
The problem of finding a receipt for something you bought once and are now selling
is ridiculous at this scale. Consider the accounting necessary when you are selling
the $15 set as just parts and you will never get to the bottom of it. I am sure
our lawmakers considered the ramifications of this on the lower-income non-business
type folks when they stuffed this law onto another bill a few years ago. Oh yeah,
probably not.
However, there is probably some wiggle room in the accounting when selling used
items or something not specifically bought for resale. I myself keep exact records
of all the fees, taxes, postage, shipping supplies, etc and then just make a
general accounting of the cost of the actual LEGO. (Hard to come up with receipts
when you are just handing your neighbor $50 for their kid's used tub of LEGO.)
I hope when Tax Man comes to my door one day, he will understand. I am so far
below any audit thresholds that I doubt this will happen. I would rather be above
reproach, but the home LEGO business just does not fit neatly into an IRS box.
Jen
|
|
|
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | Author: | 1001bricks | | Posted: | Apr 21, 2022 09:13 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 58 times | | Topic: | Taxes | |
|
| | | Everyone should report all their income and pay taxes on it!
|
Right - starting from Elon and Jeff?
Good luck and make it happen!
|
|
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | Author: | popsicle | | Posted: | Apr 21, 2022 10:40 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 74 times | | Topic: | Taxes | |
|
| In General, 1001bricks writes:
| | | | Everyone should report all their income and pay taxes on it!
|
Right - starting from Elon and Jeff?
Good luck and make it happen!
|
Although Tesla paid little to no taxes in 2021, Elon, with his Tesla share sell-off
($16.5 billion) last year, has placed himself in over a 52% combined tax rate
for the year. Something north of $11 billion in personal income tax for 2021
alone paid
|
|
| | | | | |
| | | | | Author: | cosmicray | | Posted: | Apr 21, 2022 07:07 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 62 times | | Topic: | Taxes | |
|
| In General, tmxbricks writes:
Keep in mind that any number like that will be gross sales, and not profit. You
have to claim deductions for all the various fees and overhead.
Nita Rae
|
|
| | | | | | | | | |
| | | | | | | Author: | Beebs | | Posted: | Apr 21, 2022 08:26 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 54 times | | Topic: | Taxes | |
|
| From all the research I've done (and I'm not a tax professional), if
the sales are claimed as hobby expense, deductions CANNOT be taken. They were
removed a few years ago (2019 I think). The main way to be able to claim deductions
against the sales and therefore pay on net profits rather than gross sales, would
be to report the income as business income. First, books will need to be kept
somewhat organized, and there are certain thresholds that need to be established.
It wouldn't hurt to take to an accountant for some of it.
I was advised to look at also reporting my revenue as capital gains, but haven't
fully delved into that conversation yet. If it seems reasonable, I'll share
with the community.
In General, cosmicray writes:
| | In General, tmxbricks writes:
Keep in mind that any number like that will be gross sales, and not profit. You
have to claim deductions for all the various fees and overhead.
Nita Rae
|
|
|
|
| | | | | | | | | | | | | |
| | | | | | | | | Author: | aboyer | | Posted: | Apr 21, 2022 08:34 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 56 times | | Topic: | Taxes | |
|
| In General, Beebs writes:
| | From all the research I've done (and I'm not a tax professional), if
the sales are claimed as hobby expense, deductions CANNOT be taken. They were
removed a few years ago (2019 I think). The main way to be able to claim deductions
against the sales and therefore pay on net profits rather than gross sales, would
be to report the income as business income. First, books will need to be kept
somewhat organized, and there are certain thresholds that need to be established.
It wouldn't hurt to take to an accountant for some of it.
I was advised to look at also reporting my revenue as capital gains, but haven't
fully delved into that conversation yet. If it seems reasonable, I'll share
with the community.
|
I believe the deductions that were removed were for hobby expenses like the storage
room, cleaning supplies, etc. You have always been able to fully deduct the cost
of the items you’re selling (including inbound shipping).
|
|
|
| | | | | |
| | | | | Author: | MrBricktastic | | Posted: | Apr 22, 2022 01:43 | | Subject: | Re: New IRS $700 selling threshold | | Viewed: | 65 times | | Topic: | Taxes | |
|
| I always wonder why resellers complain about taxes, in the sense that it's
a bit more than a hobby to maintain a decent storefront here.
Sure, this may be a side-hustle for some but Bricklink is capable of generating
a significant amount of revenue if you care for your store properly. Part of
caring for your store is tracking your expenses, income and classifying both
of them.
Sure, you paid $15 for a set one year but sold it for $20 the next. That doesn't
mean that you didn't get to write that $15 as an expense in Y1. Everytime
I see these articles I always suggest that people take the time to understand
their states' taxes and their own tax requirements. Pay an accountant if
need be, it'll save you a headache in the end if you don't fully understand
what needs to be done.
|
|
|
|
|
|
USA, North Carolina
France, Nouvelle-Aquitaine
