2022 law change - PayPal transactions over $600 (2 Viewers)

For those of you who are running group buys and not filing a proper tax return, please reconsider. This is potentially a serious risk no matter how you are getting paid. Not so much for the person doing a few hundred-dollar project, but for some of the larger group buys moving six figure sums of money and not filing the proper paperwork it is a significant risk if your records aren't pristine and your profit negligible.

It is almost trivial to file a schedule C showing income from people paying for their orders and expenses that match the collections. Net profit is zero, and taxes should be zero. I hesitate to offer options about sales taxes and / or export issues.

If someone profited off of their group buy in a big way - i.e. selling chips for more than costs, that person is playing with fire. And efforts to conceal the payments from taxing authorities only compounds the risk. This could easily morph from "opps I made an oversite" / civil case into a criminal case with crushing fines and jail time.

I know people think they will not be caught, and that is probably true. If this is you - the last thing you want is the taxing authority looking at the PayPal filing for 2022 that you ignored and digging into your history only to find $250,000 in structured payments aiming to avoid reporting. And the fact you deleted the history about such deals makes it look even worse. There is a seven-year statute of limitations, but failure to file at all might extend the window of risk.

Again, this really isn't aimed at the chipper who moved $1,100 worth of chips or sold $300 worth of cut cards and dealers buttons. But for those moving big dollar amounts of chips and accessories, best be careful about willful non-compliance with the taxing authorities.

DrStrange
 
nezara said:
Remember you don't have to pay taxes on the whole amount, just profits. The challenging part is having receipts. Most chip transactions aren't profitable. The other big problem with the whole situation is no one is paying state/local taxes. If that was ever scrutinized due to an audit sellers could be in trouble.
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It's a hobby. The IRS won't have or get many receipts from me. Now if they want me to have "business" records, then my hobby is now a business and I'm deducting a shit ton of things and also paying my children up to $10k+ each tax free through the business. They aren't getting a gift receipt from my dead father for the GI Joes he bought me in 1982, it's not happening, sorry fuckers.
 
Silver_Fiend said:
Theres no way in hell that PP is going to ammend any of those 1099s. Its one thing to have accounting software kickout a 1099, its another completely to have actual people recieve, read, review, decide and update said 1099s
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If there is a legitimate error on their part, some form of proof might need to be submitted but they most certainly would need to address and correct it. They face as much potential liability for filing false tax documents as anyone else.
 
Tonysquander said:
If there is a legitimate error on their part, some form of proof might need to be submitted but they most certainly would need to address and correct it. They face as much potential liability for filing false tax documents as anyone else.
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yeah, but its going to be on us as the users to PROVE they were wrong, and I'd bet 99% of these incorrect/fraudulent 1099s wont ever be contested because it will take an enormous amount of time and/or $$$ to fight it. Just like when the IRS wrongly attacks people, many tax lawyers advice people to just pay the penalty because it will cost them far more to fight it.
 
If you get a 1099 are you required to do anything with it? In other words, if it was all friends and family type stuff and you didn’t make any money off anything on the 1099, can you just ignore it or do you need to always file a document with it?
 
You will have to file and somehow show what all those payments were for.
 
Your capital gain / losses schedule should match up with your 1099 returns. You also may have gains / losses not reported on a 1099 that should be reported.

If the values on your 1099s don't match the capital gains / loss schedule in a significant way, then you should expect issues with the IRS a few years down the road.
 
bergs said:
If you get a 1099 are you required to do anything with it? In other words, if it was all friends and family type stuff and you didn’t make any money off anything on the 1099, can you just ignore it or do you need to always file a document with it?
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those are also sent to the IRS, so yes, you have to account for that "income"
 
bergs said:
If you get a 1099 are you required to do anything with it? In other words, if it was all friends and family type stuff and you didn’t make any money off anything on the 1099, can you just ignore it or do you need to always file a document with it?
Click to expand...
You need to report it and also show costs of goods as same amount to zero it out as a gain (assuming that is the case). Not reporting it is much, much more likely to trigger a red flag and audit than putting it on there and showing no gains. I don’t think you have to produce supporting documentation with your return unless you get audited, but I could be wrong. I’m not a CPA.
 
FDLmold said:
The documentation for an audit part for hobby purchases over many years is the creme de la bullshit of the whole thing.
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No argument here. I agree, but it is what it is. Also if you decide to go the route of claiming it’s a business as you indicated previously, don’t forget that you then might also owe self-employment taxes (medicare and SS payments), etc. etc. before you can hit those deductions. :eek::eek::eek:

“Garage sale” sellers get no deductions.

I did see where the IRS is not getting as much additional money in the spending package as originally allocated to them so that’s good at least.
 
Tonysquander said:
No argument here. I agree, but it is what it is. Also if you decide to go the route of claiming it’s a business as you indicated previously, don’t forget that you then might also owe self-employment taxes (medicare and SS payments), etc. etc. before you can hit those deductions. :eek::eek::eek:

“Garage sale” sellers get no deductions.

I did see where the IRS is not getting as much additional money in the spending package as originally allocated to them so that’s good at least.
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I haven't done it yet, but if I did start it as a business, I'd call it "FDLmold & sons" and put my kids on the payroll. Basically the first $12k in profits (per child) I could pay to my children each year, and all of that would be tax free I believe. I know people who own their own business and do that yearly, but they have an accountant and he handles all the details. I don't know how FICA or Medicare works for that $24k in kid income. My business would make $1 per year - no self employment taxes at all on such an amount - don't hate the player, hate the game lol.

(There are some great opportunities investing in Trading Card Games right now, and I don't play them. So I'm tempted to start a business, teach my kids a few things along the way. The older I get, the fewer college degrees have any worthwhile payout. Don't get a business degree, just start a business instead and LEARN. Or do both I suppose, just DON'T take student loan debt, gawd no stay away from that. But I digress.)
 
Please don't "wing it" and play funny tax games without proper tax advice.

Putting your kids on the payroll can be tax savvy. More so for avoiding the estate tax than income tax though ( only if you have an eight figure net worth or more. The rest of us don't pay estate taxes ). It isn't obvious what works out better for minimizing the collective income tax on the family.

Doing it yourself via TikTok, Twitter, U Tube and Facebook are terrible choices for getting good tax advice. Same thing with PCF. Pay a modest professional fee and get proper guidance.
 
But, but…what about all those peasants that need to “pay their fair share???” :rolleyes:
 
I haven’t sold a dime worth of stuff on eBay this year but they keep emailing me every few days that they won’t release my funds (there are none) unless I give them my social number.

Fuck straight off, I don’t sell on your fee ridden shitball platform. My number is 7, work off that, fuckos.
 
bergs said:
I haven’t sold a dime worth of stuff on eBay this year but they keep emailing me every few days that they won’t release my funds (there are none) unless I give them my social number.

Fuck straight off, I don’t sell on your fee ridden shitball platform. My number is 7, work off that, fuckos.
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Silly Bergs, you need to give your routing number to the Nigerian prince first!
 
bergs said:
I haven’t sold a dime worth of stuff on eBay this year but they keep emailing me every few days that they won’t release my funds (there are none) unless I give them my social number.

Fuck straight off, I don’t sell on your fee ridden shitball platform. My number is 7, work off that, fuckos.
Click to expand...
My only criticism of this excellent philippic is I would call the fee ridden shitball least-innovative-company-on-the-planet feebay.
 
We need some of you in Ohio and Louisiana to email Sen. Brown & Cassidy to see when they are going to release this out of the committee they run so the house and senate can get to voting on the damn thing. Seems like a good compromise to the looming draconian reporting requirements that are coming up.

https://www.congress.gov/bill/118th-congress/senate-bill/1761/text
 

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