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Am I the only one worried US media mail will get eliminated in near future?

Discussion in 'Marketplace Discussions' started by 12" 45rpm, Mar 30, 2021.

  1. Cronverc

    Cronverc Forum Resident

    Location:
    Brooklyn,NY
    I know some people will hate me for saying that, but I will be glad if it will happen.

    Maybe then local stores will start selling some good stuff in actual store instead of listing it on eBay and Discogs like nowadays.
     
  2. quicksrt

    quicksrt Senior Member

    Location:
    City of Angels
    No. The $600 limit starts in the 2022 tax year. One will get the 1099-R in early 2023 for that 2022 tax year.
     
    zongo likes this.
  3. quicksrt

    quicksrt Senior Member

    Location:
    City of Angels
    It should not change the way stores keep their books and pay taxes. This new rule will affect only the small-time sellers.
     
  4. I have been selling around $1,000 online annually with no profit for years but in the mid '90s I sold far more and actually did make a profit. I reported it and paid the tax and I have never received a 1099 for online sales. I am not sure receiving a 1099 means you have to report it to the IRS if there is no profit but I will look at that if I start receiving 1099s for online sales, in any event, unless I start making a profit again, I won't pay any tax. My hat's off to anybody selling their used CDs online and making a profit.

    I have thousands of CDs I will be lucky to make 10% of the purchase price after all costs to sell online. Receiving a 1099 or not doesn't matter, all that matters is if you are making a profit on your sales as far as income tax is concerned. Making a profit without receiving a 1099 doesn't relieve you of the reporting requirement and paying tax.

    I don't know if the USPS will discontinue Media Mail or not but I doubt it. For most media shipped by Media Mail, Priority Mail or First Class cost means the items won't be shipped by the USPS. Local sales, dumpsters and thrift shop donations will get the items.
     
    Big Blue likes this.
  5. krisjay

    krisjay Forum Resident

    Location:
    Maine
    Hopefully if this did happen, it will force more people to shop for records locally. Lose a little convenience and that just might be a good thing for local record shops. 10 dollar and under albums keep most mom and pop shops alive.
     
    Cronverc likes this.
  6. ivan_wemple

    ivan_wemple Forum Resident

    Vermont is the same. I use Schedule C, call my business "Ivan's Garage Sale" and fill out the form such that my net income is $0.00. This reconciles the 1099-R in a very reasonable way.

    I think the IRS likes it this way. If I sell a bunch of CDs that originally cost $15 each, for $3 each, I'd probably go to prison if I claimed a business "loss" of $12 for each CD I sold (not to mention packaging and shipping). Believe me, this would not fly.
     
  7. kwadguy

    kwadguy Senior Member

    Location:
    Cambridge, MA

    In MA, where we have had to deal with 1099R for a couple of years for > $600, here's how I've filed.

    Include Schedule C.

    Principal business:
    eBay sales (hobby)

    Accounting method: Cash
    Did I materially participate: Yes
    Enter 1099r into line 1
    Enter cost basis (estimated) on line 27a. (If you're a hobbyist, this is going to be a guess of all costs and probably should not be > 1099r amount). If you are audited, they might ask you to provide documentation of this number.

    Description of cost basis in line 27a (in Part V of worksheet): "Cost of items sold using PayPal

    You'll pay tax on (line1 - line 27a)

    You'll also wind up with a Schedule SE and Form 8995 to go with the Schedule C, but these will get auto-filled if you use tax preparation software.
     
    Last edited: Apr 6, 2021
    ivan_wemple likes this.
  8. A 1099-R is for distributions from pensions, annuities and insurance contracts. Yes, spending money on CDs or any audio/video items amounts to an expensive hobby, certainly not deductible as a business loss.
     
  9. ivan_wemple

    ivan_wemple Forum Resident

    Yup. Typo. PayPal "income" is reported on a 1099-K, not a 1099-R. The 1099-K is for "third party network transactions."
     
  10. Archguy

    Archguy Forum Resident

    Location:
    Richmond VA
    My wealthiest friends never seem to get audited. The taxing authorities know full well that if they try, the wealthy people will throw an army of highly-paid attorneys at them, and tie them up for years. Of course there are (high-profile) exceptions, but my own income is decidedly modest and I get audited all the time. Usually by state and especially county, though. And I've been self-employed for many years which always raises flags.

    Virginia has joined that list too, as have several other states.

    Oh! And about media mail: I buy old books now and then and there are sellers who refuse to ship via media mail. They say their experiences are much better with priority mail, and while I have no reason to doubt that, the difference in cost is substantial with a set of old books.

    But I can see that MM would be on the chopping block. It costs the USPS a lot of money and I'd not be surprised if people cheat with it.
     
  11. kwadguy

    kwadguy Senior Member

    Location:
    Cambridge, MA

    No way I'd buy cheapo books and pay Priority Mail. Yes, Priority Mail is typically faster and insured to $100. But the cost of Priority Mail is typically 3-4x Media Mail.

    And, yeah, a lot of people cheat. The USPS does spot inspections, and if you get caught, then everything you send from that moment on will get inspected. But some people also get away with it. It annoys me to no end when I receive an item where the seller cheated and sent it through Media Mail. (I'm not talking about the fuzzy area such as a box set with a T-shirt and a CD, or stuff like that, but things like computer parts sent Media Mail).
     
    Archguy likes this.
  12. Archguy

    Archguy Forum Resident

    Location:
    Richmond VA
    Slight clarifications: Priority Mail is only insured to $50, until and unless you pay a surcharge; and though I buy old books they are generally not cheap, so the PM cost may make sense. I've received LP records in MM boxes which arrived shredded. Fortunately it was just the boxes which were shredded.
     
  13. Dave S

    Dave S Forum Resident

    If you owned the items for a year, then you can make use of your capital gains threshold, which for a single person in the US is a whopping $40,000. Income? No, it's not income, but a capital gain.
     
  14. Dave S

    Dave S Forum Resident

    Scrub that, it's income below $40,000 that attracts zero percent capital gains tax. U thought the threshold was ridiculously high.
     
  15. giantleech

    giantleech Lord of all fevers and plagues

    What do you folks have against people who don't live anywhere near a record store? Those people deserve records, too; and "media mail" shipping makes it affordable for such people to get their mitts on wax that normally only city folk would be privy to otherwise.

    Media mail also opens up a nationwide market for these "mom and pop" shops to make their wares available to hundreds of millions of peoples; opening up more avenues to turn a profit and stay in business.
     
  16. kwadguy

    kwadguy Senior Member

    Location:
    Cambridge, MA
    Nope. $100 if you buy the priority mail label online ... At least through certain portals.
     

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