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I guess we will all find out soon. Has anyone actually seen a 1099 from PayPal yet or are we jumping g the gun here ?
Pit Row
If the IRS sends you an inquiry about the discrepancy, type up a response that states you were only selling used goods for less than you originally paid for them. As long as the amounts are reasonable, this should put an end to the whole affair.
One year I had deducted like 600 dollars in refunds from the 1099 amount on my declared income and was sent a letter saying that my reported income didn't match my declared amount on my taxes. I had accidentally deducted the refunds before rather than putting it on the tax return for them to see and they caught it. I explained my honest mistake but it has me wondering if everyone that doesn't declare this 1099 is gonna get a letter. Maybe they wont if under a certain dollar amount but it will be interesting to see.
Its pretty easy to vet ppl here , just look at their history and what they post and what they have sold in the past from their posts. You can tell with 99.9% certainty that they are real members but a seller rating system would be cool. Though how would the Admins know a true transaction has occurred? Having one random member report that they bought off another can easily be done by a scammer.
On a side note I also saw on ebay it said it had to report sales over $600. I wonder if that also now has been modified to only business ebay accounts.
I’ve been doing this for years already. If I’m selling something i always required the seller to pay “family and friends”. I don’t like how doing a actual purchase would put me as a seller at risk, having to deal with some bs buyers claiming item wasn’t as described etc.
Got paid last night for some parts I’m shipping out today. Seller paid with normal Venmo, no issues.
About a week into this year, someone purchased a small item, the transaction processed fine and the funds sent to my bank account. Then a couple days later, a set of forks sold for more than the $600 threshold. eBay said funds were received and to proceed with shipping. I purchased a label and was about to send it out. I checked the funds processing status and a noticed a banner was posted stating that my funds would not be processed until I provide my SSN so that they can send me a 1099. It said that they will request SSNs when annual sales approach $600. I will not give my SSN to eBay or any online system like that so I called the buyer to let them know. He suggested we use another form of payment. I refunded the sale with eBay and he sent funds through Zelle to my wife. I also gave him a discount, so everyone was happy. I have had 4 transactions complete this same way so far. I have not requested it from the buyers, I have just explained that I cannot process the transaction due to these changes and that I will refund them. I have been dragging my feet on removing the rest of the listings.
As far as PayPal goes, I haven’t received payment in a while, but have have thousands of sales in the past processed through them. PayPal sent notice for me to provide my SSN to keep my seller account a while back and I never did. I will not give them that info but can still receive money by accepting it and immediately transferring it to my bank. I cannot keep a PayPal balance. I know I can receive Friends and Family transactions but assume I cannot accept buyer protected transactions.
I am frustrated I cannot sell on eBay anymore, but it is not worth providing that intrusive level of personal information to them.
If you do not want to receive 1099s, simply do not give them enough information to provide them. It will limit your capabilities with their tools, but at least you will know the boundaries.
Now I have thousands worth of parts that I expected to be able to sell and have to find other ways to do so. I will likely focus on Facebook, OfferUp, VitalMX, and MX Locker. Hopefully enough sellers transition and bring a larger user base to those platforms. I also know that requiring PayPal Friends and Family, Zelle, or a Money Order is going to make it less desirable to buyers and delay my sales significantly.
Post a reply to: Giving you a heads up on new tax law for buying and selling