Can someone explain the 600.00 reporting to the IRS?

I believe Biden is behind it. I was hoping it wouldn’t be true.

It’s not Biden, it is the IRS = = = > https://www.cnbc.com/2021/03/26/its-going-to-get-harder-to-avoid-telling-the-irs-about-income-from-online-sales.html

They (IRS) have been trying for years to stop “under the table income” that wasn’t showing on the the taxable income.

I’m a little surprised it wasn’t already happening. Although, I see the problem with selling items at a loss, then you don’t owe tax, and who has all the original information for what they paid for things?

Usually, a 1099 is cut by an employer who pays a subcontractor or vendor over $600 for products or services. Under that amount the money isn’t reported to the IRS. In turn, the contractor has to claim that amount as income. Whether the contractor was issued a 1099 or not, they are technically supposed to report the income. Same with when a person sells goods at a profit.

It’s going to be a record-keeping nightmare for eveyone involved.

How do I know what I bought that old ratty lamp for 15 years ago, that I sold for $30 at my garage sale?

I can sort of see the point in this if you’re selling new merchandise, were you have an actual cost basis so that ultimately you can figure out your net income down the road. But to get a 1099 that is a gross amount for total sales !!! good luck figuring out what part of that is taxable.

I agree with @JLeslie however, the internet and criaglist have been around for 20+ years now, and I’m surprised it has taken this long to have this sort of rule.

@elbanditoroso Plus, don’t people use PayPal like Western Union just to move money? Will that get caught up in this too? With Amazon and eBay that’s always selling something I think.

Has Amazon been using the $600 rule all along? Or, was it $20,000? I’m pretty sure my dad gets some sort of form from Amazon for the selling he does, but he doesn’t try to do any of it under the table anyway. If anything he probably over pays taxes, because he’s always nervous about red flags. I know he doesn’t claim all of the expenses that he could.

Goes to prove there are two things in life you cannot avoid: Death and taxes. And businesses have to report what they pay out to people to keep their taxes straight with the IRS, so it isn’t just you.

Just read this. It isn’t really hard, but it is a bit aggravating.

The IRS

From their perspective, Income is Income

@Forever_Free Not exactly. For the average person selling used items at a loss (like cleaning out a closet or garage) that income is not taxable, it’s at a loss. Assuming it was all sold at a loss, which is typically the case.

If it’s a business or self employment, then all sales count.

@JLeslie What is the “Not exactly part”?
What is the loss part? You bought it, you used it, you sell it. It is thus income. You can choose to donate it for a tax write-off.
It is also a $600.00 cutoff. If a person is actively doing this, then it is acceptable accounting to me.
I also think that the one-off selling of these kinds of items will make much of a difference in a person’s tax structure and tax liability.