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Anonymous
Guest
And we have bone heads protesting people that make too much money. Why not protest taxation without representation?
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brownbanana
New Member
Hi, how did you find out your gross payment total and number of transactions? I did a quick check on google and it seems as if paypal is keeping the figures hidden from sellers. In that IRS page you linked, it mentions that paypal will keep track of your transactions and gross payment total and they will only alert you AFTER you have exceeded the limit.
Jason
Active Member
I seem to recall PayPal Australia mentioning something similar regarding payments made to a person being reported to the ATO (Aussie equivalent to IRS) but since I refuse to sell on eBay, I only gave it a cursory glance. Governments are finally waking up to how much revenue they're missing out from online transactions and reacting accordingly. No doubt, some one will find a loop hole soon enough.
ausreenactor
Well-Known Member
I had my details put forward to the ATO by Paypal for my 2008-2009 FY. Anything over $20000 sales was deemed reportable. I thought that at half that again I was screwed. Had to pay an additional sum post audit, but that was based on a term deposit that had not matured. Nothing has come of it. Yet
ausreenactor
Well-Known Member
List on eBay.com.au. You can accept alternate methods. Our ACCC told eBay to go to buggery.
brownbanana
New Member
Thanks, never checked that, but it looks like the logs only cover the last few months. Why can't paypal just make a quick peek feature and let you see if you're over limit or not?
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Anonymous
Guest
Because they want your money, why give you a heads up. Paypal is manditory to offer as a payment method, but there are ways around it.
brownbanana
New Member
Cool, thanks man! You're a true paypal pro, lol.
prostaff4ever
Member
I heard about this too. It isn't enough just to show your revenue side for tax purposes. Once Paypal sends in the 1099-K don't you have to somehow report your cost basis for acquiring whatever it was you sold? You can only be taxed upon the profit and not the gross proceeds. I wonder how all of this is going to work without a ton of extra documentation. How are you going to prove that you paid $500 7 years ago for the jacket you just sold for $350. Then you have to back out all the Ebay and Paypal fees as well as the shipping. Will you be able to claim a tax deduction if you end up losing money on all these transactions? The market for jackets now is much softer than it was a few years ago. It seems like this is all going to be a mess. It would have made more sense to do this for sellers that have ebay stores, where this is their main line of business, not for people who collect and trade as a hobby.
prostaff4ever
Member
No doubt the IRS has a hand in it, but the amount of audit enforcement that this will require will eat into much of the anticipated new revenue for Uncle Sam. Surely everything has a cost associated with acquisition, so it's not just that everybody who gets a 1099-K is simply going to fork over taxes based upon the face value figure stated on it. Then you would have to subtract out Ebay and Paypal fees, and what about gas, shipping, home office expenses, etc in order to run a "business". The base majority of people hit will be enthusiastic hobbyists. Maybe the government should have had a conversation with Ebay to see if they could easily identify those who make their living on it first and then started from there. Rules that make for a lot of work and little profit are stupid.
unclegrumpy
Well-Known Member
If you get a $20k 1099 from eBay, the IRS computers WILL know about it, so you are going to have to report it. It is not going to be a big audit hassle for them because their system will pick it up. Capital Gains on Collectables is taxed at 28%, and that is a hefty slice for them to go after. However, if you itemize, you can back your documentable costs out, so you do not necessarily have to pay on the entire amount. The other choice, like you mentioned, is to set yourself up as a business. That has a lot of advantages and disadvantages, but I think is what some will do.
However, there clearly is a slippery slope in all of this for the little guy. I get 1099's from savings accounts that generate just a very few dollars a year in interest. If they make Banks send 1099's out for $13, then how soon do you think it will take for the IRS to lower the threshold down from the $20K? :shock:
However, there clearly is a slippery slope in all of this for the little guy. I get 1099's from savings accounts that generate just a very few dollars a year in interest. If they make Banks send 1099's out for $13, then how soon do you think it will take for the IRS to lower the threshold down from the $20K? :shock:
ausreenactor
Well-Known Member
prostaff4ever said:
I think this is how I managed to evade the tax burden in 2008-09. I bought A LOT of stuff from the US when our dollar was at US$0.48 in the late 90s. When it fell to US$0.60 in 2008 I took advantage and let the exchange rate make me the money on stuff I no longer needed. I tapered off sales in recent years and it looks like the dollar is going up again? eBay and Paypal are the devil. There are ways around their evil agendas. But under Paypal you are protected as a buyer and a seller, and I will abide the fees everytime. It has paid off in spades for me.
Couchy
prostaff4ever
Member
It's going to confuse the heck out of a bunch of people and there will be a lot of support phone calls at the IRS. I bet if you ask an IRS field agent whether this was a good idea or not, they would probably say that this is insane...unless they're looking for job security. Perhaps the government is going to help stimulate the economy by hiring a bunch more IRS agents to help support this new initiative.
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Anonymous
Guest
IRS sucks big as paypal does, but you guys should still feel lucky that you don't have VAT to pay.
EU sucks even bigger
EU sucks even bigger
