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PayPal 1099-K changes

Discussion in 'Marketplace Discussions' started by markshan, Aug 23, 2021.

  1. quicksrt

    quicksrt Senior Member

    Location:
    City of Angels
    If you sell on ebay, Discogs, or Amazon then there was sales tax added and paid (to the state) for you. If you sold only in forums, then there was no sales tax collected, I would not worry about it too much.

    The main thing is to keep your spreadsheet up to date and log every sale starting Jan. 1st. Keep every receipt starting Jan. 1st. Padded envelopes, cardboard mailers, rolls of packing tape, etc. Postal receipts are usually kept for tracking. I put a date at the top like 11-24 in black marker so I can find a shipping date quickly without looking at the fine print on the receipt.

    Some folks actually print out a paid invoice from PayPal their account and keep those in a folder or binder. Same for ebay and Discogs sales. I won't do that because I can always print it later, it stays online. But I will log each transaction into the sheet and add the expenses next to each sale. I may do a separate spreadsheet for each venue I sell at.
     
    zen archer and DarkSideOfTheMoo like this.
  2. bru87tr

    bru87tr Forum Resident

    Location:
    MA
    Well let’s not get crazy. :)

    The good stuff I keep in my collection, but other stuff worth $10-20 each, ya that’s giveaway stuff.
     
  3. CraigC

    CraigC Live It Up

    Location:
    LI, NY
    Can somebody summarize the columns we need to maintain a sales spreadsheet for tax purposes? Or a link to one, much appreciated.
     
  4. Gabe Walters

    Gabe Walters Forum Resident

    PayPal has a function where you can see a list of all your transactions by calendar year. Start there.

    My columns (yours may differ, depending on your needs):
    Transaction number
    Item description
    Sale date
    Purchase date (the date I bought the item. sometimes I don't know)
    Site where I sold it (Discogs/eBay/SHF)
    Sale price–this is the total transaction figure, incl. fees and shipping. Everything that PayPal sees. This column total will equal your 1099-K amount.
    My purchase price (cost basis)
    Discogs fee
    Ebay fee
    Paypal fee
    State tax paid
    Shipping cost
    Gain (loss)–this is your net gain or loss per item. Subtract cost basis, fees, taxes, and shipping from the sale price to arrive at this figure. The total of this column will be your total gain or loss. This is the number you enter on a Schedule C. If you have a gain, you will owe taxes on it. If you have a loss, you will not owe.
     
    Last edited: Dec 9, 2021
  5. SixthSpeed

    SixthSpeed Well-Known Member

    Location:
    California
    Yup, a lot of people will be caught off guard in January 2023 when they end up getting 1099s.
     
  6. quicksrt

    quicksrt Senior Member

    Location:
    City of Angels
    If you like you can also print out each transaction from PP or Discogs, ebay, etc., and place it into a three-ring binder in order of each sale. So you have a book of transactions as well as a spreadsheet. Many businesses print out two copies of a sales invoice, one for customers (getting rarer these days) and one for their own books. I may do this myself. In the event of an audit, I'd love to hand off a huge stack of paper documents for the IRS to have to sort through, and then find it all airtight after all their work going through it. A spreadsheet and a binder supporting that info along with an amazing number of expense receipts.
     
    CraigC likes this.
  7. R. Totale

    R. Totale The Voice of Reason

    Sounds suspiciously like work. I've got emails and downloaded ledgers from Paypal, etc. I can use to justify anything I've claimed. I'll give 'em a thumb drive, once they tell me what they are disputing, if that were ever to happen which a sane assessment of my situation says it won't.
     
  8. aoxomoxoa

    aoxomoxoa Play that fast thing one more time

    Location:
    Dayton Ohio
    Wait this doesn't start until next year?
     
    latheofheaven likes this.
  9. Combination

    Combination Forum Resident

    Location:
    New Orleans

    Correct
     
    quicksrt and aoxomoxoa like this.
  10. aoxomoxoa

    aoxomoxoa Play that fast thing one more time

    Location:
    Dayton Ohio
    Whew...
     
  11. SixthSpeed

    SixthSpeed Well-Known Member

    Location:
    California
    LOL!

    For tax year 2021, the threshold is still $20k and 200 transactions. But some states already lowered it to $600 on their own, and it will affect current and future years.
     
  12. quicksrt

    quicksrt Senior Member

    Location:
    City of Angels
    Yes, in just over two weeks, in case you were wondering.
     
    latheofheaven likes this.
  13. quicksrt

    quicksrt Senior Member

    Location:
    City of Angels
    They don't have to tell you what they are disputing other than they are auditing you, and just picked you at random. It is very unlikely. And I'm not worried about it. But I know that whatever can go wrong in life often will.

    But yeah, I never said the new developing tax obligation was going to be fun or easy.
     
  14. aoxomoxoa

    aoxomoxoa Play that fast thing one more time

    Location:
    Dayton Ohio
    Well I guess I'm hanging up my selling shoes.
    Bummer
     
    latheofheaven likes this.
  15. ILovethebassclarinet

    ILovethebassclarinet Forum Resident

    Location:
    East Lansing, MI
    I don't.
     
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  16. ILovethebassclarinet

    ILovethebassclarinet Forum Resident

    Location:
    East Lansing, MI
    I never tried it, and quickly discarded thoughts of trying it, as it always seemed like a headache from the jump to me.
     
    Quakerism likes this.
  17. ILovethebassclarinet

    ILovethebassclarinet Forum Resident

    Location:
    East Lansing, MI
    I've got a few bags of old receipts, but many of them don't list titles; they don't go as far back as the '70s though. Even before this change, the entire process was way too onerous for me to see any reason to get involved in it.
     
  18. ILovethebassclarinet

    ILovethebassclarinet Forum Resident

    Location:
    East Lansing, MI
    "Learn something new everyday." I've never done that very much, only when financially pressed, and never on-line.
     
  19. ILovethebassclarinet

    ILovethebassclarinet Forum Resident

    Location:
    East Lansing, MI
    Even heads of that agency have conceded that 'there's a problem there.'
     
  20. glide

    glide Forum Resident

    Location:
    NY, NY, USA
    Why? It’s not income at that point.

    If I take a loss on an investment, I’m not paying taxes on that.

    I suppose it’s not surprising in that they don’t seem to apply any sort of logic or consistency to these cash grabs on the little guy.
     
    Quakerism likes this.
  21. aoxomoxoa

    aoxomoxoa Play that fast thing one more time

    Location:
    Dayton Ohio
    Can we switch payment options for the classifieds back to checks and money orders?
    There are another alternative like a Zelle that could be used? I guess likely that would be the same outcome as PayPal? I don't know
     
    Jerry Horne and latheofheaven like this.
  22. ILovethebassclarinet

    ILovethebassclarinet Forum Resident

    Location:
    East Lansing, MI
    All I meant was that "I'm not surprised' if that's the policy. We're talking about an IMMENSE organization, with MANY people with the potential to impact policy.
     
  23. Spitfire

    Spitfire Senior Member

    Location:
    Pacific Northwest
    Starting to get ready for Saturday and trying to figure out what kind of info I need to keep track of. What a bummer
     
  24. quicksrt

    quicksrt Senior Member

    Location:
    City of Angels
    For sales it's really easy. And it's been explained by me and others right here in this thread not far back.

    For expenses, it is only a little more complicated.

    One can do a spreadsheet in Word if you don't do Excel spreadsheets. My top headings will look like this:

    DATE / TRANS. # / ITEM / PRICE / SHIPPING / TOTAL / Disc. Fees Paid / PP Fees Paid / Ship Cost / Net
    1/1 - 12345 - Clash CD - 8.99 - 4.50 - 13.49 - and on - - -
     
  25. Spitfire

    Spitfire Senior Member

    Location:
    Pacific Northwest
    Thanks. I already have a spreadsheet built for sales that I've used for years. Finding the original cost information is going to be the biggest pain. Most of my vinyl I have no receipts at all. Just having to do this sucks as I'm not a business yet I have to account for everything now. To be honest I'd rather throw my stuff in the trash than see the government get a penny more out of me for taxes. As you can tell I'm not a happy camper at all about having to do this.
     
    Last edited: Dec 29, 2021
    masterbucket, Quakerism and no.nine like this.

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