re: Explain this $600 tax thing to me like I am 12 please...

If I sold it for less than what I paid for it I wouldn’t bother reporting anything regardless of any 1099 issued. Obviously keep all documentation.

This is a really stupid issue congress has created. The tax law does not allow to deduct hobby losses, and they are basically now asking people to report hobby income. So they don’t want people cluttering tax returns with all of their hobby expenses if not deductible anyway, but they want the gross income on the return? If you sell things as a hobby, let’s say guitars in the $800-1500 range, and you buy and sell about two a year, you have income of about $2,000. Assume you bought them for $800 a piece or $1,600 - you have a gain of $400. But in order to get that gain, you had to do a setup that takes you an hour or two per guitar, new strings, time buying and selling, etc. In reality you don’t have a gain at all. So now they are expecting you to document all of this, and put it all on a schedule C only to arrive at a deduction you aren’t allowed to take (or carry forward for that matter)?

Now if you are buying and selling on eBay for a living, in all likelihood your sales would be in the tens of thousands and would have been reportable in the past.

I understand in theory why they would capitalize on getting taxpayers to file or report income on what used to be a cash business (However if they got everyone on this, there may be no democrat voters left).

I don’t understand the point of the threshold being so low. Juice is just not worth the squeeze. And it is a completely valid point that if you were taxed on the income you paid for the watch, paid the sales tax and made no deduction for any of the associated purchases/expenses, the government would be effectively taxing you again on that income you originally earned to purchase the watch. If they want to allow hobby losses (or even suspended losses), fine, make all of it reportable. But either way, this is adding way too much clutter to an already cluttered tax system for very little return - that is unless this is simply a cash grab to impose double taxation

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Explain this $600 tax thing to me like I am 12 please...

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Govt takes in billions in tax revenue. They spend trillions mostly on frivolous things that do not benefit taxpayers.

Therefore, they need more tax revenue to waste. The way they do that is to tax you further.

The best way to avoid this, is to become a tax taker instead of a tax payer.

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control

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Or social engineering or punishing constituencies while rewarding others. It's all BS.

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think the IRS delayed implementation of this.

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The $600 threshold has been in place for at least a decade. It was upped from $500.

I’d just put the amount reported on the 1099 on Sch C, then throw an expense on there for the same amount to net it to zero. The IRS doesn’t have the manpower right now to quibble over something like that.

You only pay taxes on the increase in value. Subtract your purchase price from the sales price and report that as taxable income.

I understand the reason for the reporting changes, to snag all these people involved in the side gig economy, but this is a paperwork nightmare.

I run a hockey camp during the summer. Basically, all the kids I coach, we divvy up the cost of ice rental. They pay me and I write one big check to the rink. This year everybody wa.nted to Venmo me. Frick no, I am not dealing with the paperwork and IRS filing for something I am making no money on. We're simply pooling our money together but it has to run through somebody.

Frick the government for doing this. $600 transaction is ridiculous. They need to make the reporting thresholds higher.

Its a bit naive that you think you can sell something without uncle Sam getting a cut.

If you were smart you would have the buyer pay sales tax. Also the $600+ is now reported as income thanks to new IRS rules about capturing more income transactions.

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So in the end, if you sold the watch for equal or less than you originally paid for it, then it has no bearing on your taxes. But if you made a profit on the watch, the profit is now taxable income.

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Pay taxes if you made a profit but oh no, you can't deduct a loss.

Biden's America.

Truck nuts for CPA’s incoming

Welcome to America, where the shitbags in Washington want you to give them every cent you own. If you are a good child, they will give you a teeny tiny allowance the next year and call it a refund. Unless they deem that you are too privileged