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DarthKry
02-01-2012, 10:58 PM
Not sure if this has been posted before or if anyone else has had this come up. Anyhow, I just got an email from paypal saying my 1099K tax form was available. I'm just as gung-ho about paying my fair share as the next guy, but this is just insane. It turns out I made $24,000 last year in payments sent to me. Of course I had no idea this was gonna happen at the begining of last year, so I never kept track of sales. Now it looks like I'm gonna be taxed an the $24,000. Which is not fair. Out of those 24,000 I must have only made about $4000-$5000 in profit, not including paypal fees, ebay fees, shipping and supply costs. Don't they factor in expense on the goods that you are selling? I basically sold items from my collection, that I paid money for and resold them for close to what I paid for them. Sometimes even lost money. Most of the stuff was loose parts. I guess my question is, how do I proceed with this? Anyone else having this issue...Please help..

RUMADMAN
02-01-2012, 11:38 PM
when did your 1099k form arrive?

Dark Passenger
02-01-2012, 11:42 PM
I am so sick of this.

jstep13
02-01-2012, 11:49 PM
lol doh! That's why you should have been smart and make 2 unrelated paypal accounts...:slap

DarthKry
02-01-2012, 11:56 PM
Should have.. Would have.. Did not thou..
It's kinda hard to do that when they ask you for SS# and lock your account until you supply it..

My electronic notice arrive today. You can view your online.

Its bullcrap how big businesses and banks get tax breaks and bailouts worth billions, but the little guys always get screwed..
We are the 99%.. Feeling it now more than ever!

jstep13
02-02-2012, 12:00 AM
I never had to verify my ss#, just verify deposits...at any rate, good luck

gagaliya
02-02-2012, 01:46 AM
well that's something new, did paypal say they will report the earning directly to irs or did they just provide you with the form? You are screwed if they report the earning directly to irs, because if you dont put it on your return it's guaranteed an audit 2-3 years down the road.

ashkanls
02-02-2012, 02:09 AM
Im in the same boat. I didnt fully keep track of anything until July.

Sweet Rabbit
02-02-2012, 02:16 AM
I've never been asked for my SS # :dunno

averone
02-02-2012, 02:19 AM
Paypal keeps all records of your transactions. You can go back to see who made payments to you.
I do agree with all of you, its not fair at all.
I think we all should write to our local and state political offices and demand a change.
Power to the people. You have a voice and power of vote, use it.

averone
02-02-2012, 02:20 AM
I've never been asked for my SS # :dunno

200 transactions a year or over 20K and they ask for it. I think at least...

ashkanls
02-02-2012, 02:27 AM
200 transactions a year or over 20K and they ask for it. I think at least...

Yeah you have to do both. It should have been incorporated at the beginning of the year 2012. I believe the "law" was passed July 1st 2011 and it backtracked and started Jan 1, 2011.

devilof76
02-02-2012, 02:33 AM
You're weaving the rope they'll hang you with. :dance

sarakawa
02-02-2012, 02:45 AM
Well as unfair as it sounds paypal doesn't know that you are selling statues you once bought. They just see you making money. So they are bound by law...not much they can do. I don't like it any more than you but there's not a whole lot you can do. I suppose if you have a tax guy it couldn't hurt to ask about loopholes to help minimize the tax.

Star Puffs
02-02-2012, 05:39 AM
I hit the 200 transaction limit (well, well under $20k) and had to provide my SSN.

At the sales volume you report, you probably need to talk to a tax professional, unless you are able to properly understand and apply the basic issues outlined here (http://www.irs.gov/newsroom/article/0,,id=169490,00.html) in whatever tax-preparation software you use.

The key issues will be:
1. Do you have valid records detailing what the items that you sold originally cost you?
2. Did you make a profit (sale price less cost and expenses)?
3. The frequency with which you have made a profit from collectible sales over the past five years.

fashizal1
02-02-2012, 06:42 AM
ive sold maybe 10 things and they want a ss# or there will be restrictions on my account sooo i dont think the 200 20k thing matters. :dunno

gagaliya
02-02-2012, 08:36 AM
edit: nevermind, found it.

Check below link guys, it has full detail. Basically 200 transaction AND $20k per calendar year and you are _____ed. Paypal will report the NET TOTAL INCOME DIRECTLY TO IRS. New law that went into effect in 2011.

If you guys received this for 2011, i strongly advise you talk to an accountant if not familiar with this stuff. Basically if you dont report the same # paypal did on your return, you have a high risk of getting flagged for audit down the road which will force you to pay the taxes owed + interest. If you just report the earning paypal did, the entire amount (not gross) is taxed. So on 20k in the 25% bracket, you are paying $5k more taxes. You need to provide the cost basis to figure out the actual gain, it's easy with stocks and capital gains but i have no idea how the hell you suppose to provide cost basis for this stuff.

Thanks to OP for the heads up, had no idea! Will definitely stay under 200 transaction so dont have to deal with this crap.


https://cms.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/IRS6050W

DarthKry
02-02-2012, 08:57 AM
Somme valid reasoning here guys.. But my point is, who really keeps all that?? I'm talking about selling items from a 14 year collection. I sold things which I bought in 1999 at toy shows, there is no way I have proof of purchase. Not to mention all the loose pieces sold. How do you pit an actual proof value/price on loose items. This is why I think its utter bullcrap. Now that I look at it, I know darn well that I must have lost money when you include things like fees and shipping. I'm guessing the only proof I have is holding the payments I recieved against the payments I sent.

sarakawa
02-02-2012, 09:24 AM
Well, I think the major outrage everyone is feeling is because this is Paypal related. But in this specific case, Paypal is not at fault because it is the law. Taxes suck and yes placing value on loose items is arbitrary but the bottom line is you are getting money for an item so if you do A LOT of selling, you have to keep records for tax purposes. Doesn't matter if you are selling items from your personal collection or selling them in a store...the only thing Paypal sees is you making money.

thenammagazine
02-02-2012, 09:27 AM
Not sure if this has been posted before or if anyone else has had this come up. Anyhow, I just got an email from paypal saying my 1099K tax form was available. I'm just as gung-ho about paying my fair share as the next guy, but this is just insane. It turns out I made $24,000 last year in payments sent to me. Of course I had no idea this was gonna happen at the begining of last year, so I never kept track of sales. Now it looks like I'm gonna be taxed an the $24,000. Which is not fair. Out of those 24,000 I must have only made about $4000-$5000 in profit, not including paypal fees, ebay fees, shipping and supply costs. Don't they factor in expense on the goods that you are selling? I basically sold items from my collection, that I paid money for and resold them for close to what I paid for them. Sometimes even lost money. Most of the stuff was loose parts. I guess my question is, how do I proceed with this? Anyone else having this issue...Please help..

It's still income and PayPal sent out warning notices repeatedly about income via their site now being taxed. I don't see how your oversight is their fault. That said, you need to go through and print out all your ebay invoices and PayPal transactions for 2011. Calculate the fees paid and the monies received and if you don't know how to do it yourself, take it to an accountant or Tax company and have them file for you. Don't forget to subtract the shipping the buyer paid from the totals. You can't count that as an expense since you charged them.

mx22
02-02-2012, 09:34 AM
To be fair to PayPal - they did send out emails in January 2011 (if I remember correctly) saying that if you sell over 20k worth of goods, you will be getting 1099k...




Not sure if this has been posted before or if anyone else has had this come up. Anyhow, I just got an email from paypal saying my 1099K tax form was available. I'm just as gung-ho about paying my fair share as the next guy, but this is just insane. It turns out I made $24,000 last year in payments sent to me. Of course I had no idea this was gonna happen at the begining of last year, so I never kept track of sales. Now it looks like I'm gonna be taxed an the $24,000. Which is not fair. Out of those 24,000 I must have only made about $4000-$5000 in profit, not including paypal fees, ebay fees, shipping and supply costs. Don't they factor in expense on the goods that you are selling? I basically sold items from my collection, that I paid money for and resold them for close to what I paid for them. Sometimes even lost money. Most of the stuff was loose parts. I guess my question is, how do I proceed with this? Anyone else having this issue...Please help..

DarthKry
02-02-2012, 09:36 AM
I'm not blaming paypal at all, nor am I whining about having to pay. The problem I face is how do I prove what I paid for stuff that I obtained years ago. I don't want to get screwed here and end up paying money I don't have, money which I did not even profit from.

gagaliya
02-02-2012, 09:37 AM
Somme valid reasoning here guys.. But my point is, who really keeps all that?? I'm talking about selling items from a 14 year collection. I sold things which I bought in 1999 at toy shows, there is no way I have proof of purchase. Not to mention all the loose pieces sold. How do you pit an actual proof value/price on loose items. This is why I think its utter bullcrap. Now that I look at it, I know darn well that I must have lost money when you include things like fees and shipping. I'm guessing the only proof I have is holding the payments I recieved against the payments I sent.

it is in your case and i have no idea how you suppose to provide the cost basis other than just make stuff up...but keep in mind this is a law for all online payment portals for all customers, not just a few. I think the limit should be much higher something in the range of 500 transaction or $50k.

You need to talk to a tax accountant.

DarthKry
02-02-2012, 09:44 AM
So am I better off saying I'm a business? For deduction purposes?

ironman24
02-02-2012, 09:56 AM
Ya a guy from Paypal told me last week that If you have 200 sales on Ebay and take in $20.000 You have to file it on you taxes..It must be both so if you are high in one and low in the other you are good

Darthrazz
02-02-2012, 09:58 AM
Ya a guy from Paypal told me last week that If you have 200 sales on Ebay and take in $20.000 You have to file it on you taxes..It must be both so if you are high in one and low in the other you are good

Just to be clear, it's 200 transactions as a SELLER , not a combo of both BUYER and SELLER?

ironman24
02-02-2012, 10:01 AM
Yes you are 100% correct on that..As a seller..It is a bunch of BS

Darthrazz
02-02-2012, 10:14 AM
Looks like money orders will be making a big comeback!

thenammagazine
02-02-2012, 10:15 AM
I'm not blaming paypal at all, nor am I whining about having to pay. The problem I face is how do I prove what I paid for stuff that I obtained years ago. I don't want to get screwed here and end up paying money I don't have, money which I did not even profit from.

Did you finish reading my post? :lol

averone
02-02-2012, 10:52 AM
Looks like money orders will be making a big comeback!

Im doing MO's and gifts
Also opened up an account for my wife so now we use different SS#

It helps to have a good feedback rating here and other forums, people know you dont screw around.

gagaliya
02-02-2012, 11:05 AM
It helps to have a good feedback rating here and other forums, people know you dont screw around.

but you dont have any feedback ratings on itrader here alex!! so stop screwing around and release the arh statues!


lol just messing with ya :slap

senbi575
02-02-2012, 11:06 AM
So am I better off saying I'm a business? For deduction purposes?

Yes you would be, but showing a loss that offsets your ordinary income is a big red flag for the IRS. This sounds more like passive income or loss, where passive income is taxable, but passive losses are not deductible. In terms of showing how to do the accounting, your revenue should be gross i.e. what was reported to you via paypal's 1099 and then you can deduct your cost of goods, shipping paid, ebay/paypal fees, and other expenses.

Roc74
02-02-2012, 11:25 AM
About How much taxes would he paying on the $24,000 income?

devilof76
02-02-2012, 11:35 AM
Too much. :monkey1

RUMADMAN
02-02-2012, 11:40 AM
About How much taxes would he paying on the $24,000 income?


15% - 20%

keep in mind paypal took at least 4% of the 24k
and if he sold on ebay.. thats about another 5% of that 24K

averone
02-02-2012, 11:43 AM
but you dont have any feedback ratings on itrader here alex!! so stop screwing around and release the arh statues!


lol just messing with ya :slap


LOL!

Do I need a feedback rating? LOL jk

Yes, yes... but you know this stuff takes time!
Dont you have to go sell a few statues ??? :lol

Skiman
02-02-2012, 11:49 AM
LOL!

Do I need a feedback rating? LOL jk

Yes, yes... but you know this stuff takes time!
Dont you have to go sell a few statues ??? :lol

^^^ short answer yes you do!


:yess:

Ski

KillingYouGuy
02-02-2012, 12:23 PM
I don't recall the exact verbiage, but there is a way to file that a sale was a loss (but it may be a percentage vs actual cost ratio). As Nam mentioned, get in to see a CPA and let a pro have a go at it.. then let us know how to avoid it. :)

galactiboy
02-02-2012, 03:56 PM
It is over $20K in sales and over 200 transactions; for those worrying gift payments are not part of the calculation.

I was a bit worried as I've gone over the 200 transaction mark, but am well below 20K (even with gift payments included).

They have still asked for my SSN, but I won't provide it until they actually lock my account.

cokebabies
02-02-2012, 04:34 PM
200 transactions a year or over 20K and they ask for it. I think at least...

Very stupid question, I'm sure: for the 200 transactions, does that only count incoming money, not money being paid?

Obviously, you wouldn't be taxed on money you paid, but say you had 50 payments incoming, and 200 payments outgoing...

mr.thrifty
02-02-2012, 04:45 PM
Looks like money orders will be making a big comeback!

That and Properly used "gifts"....

Randy_S
02-02-2012, 05:12 PM
About How much taxes would he paying on the $24,000 income?

Before any deductions roughly $9600. You must include the 15.3% that goes to SS & Medicare. I used to have about that much in 1099 income along with my W-2s and i had to send in a lot of money quarterly along with a huge payment every April.

Go to an accountant, don't even debate it. If these are your personal items you should be able to write off 100% of the cost.

Star Puffs
02-02-2012, 05:39 PM
Too much. :monkey1

I hear tax rates are low in Somalia. :wink1:

galactiboy
02-02-2012, 05:54 PM
Very stupid question, I'm sure: for the 200 transactions, does that only count incoming money, not money being paid?

Obviously, you wouldn't be taxed on money you paid, but say you had 50 payments incoming, and 200 payments outgoing...

Yes, 200 sales transactions and $20,000 in sales.

Legendary Hunter
02-02-2012, 05:54 PM
I just checked my history for 2011, I only received around $14,000 for payment, but damn this sucks for those that broke $20,000 and it wasn't even 100% profit, I hope you guys work it out.

mmmmBrains
02-02-2012, 06:09 PM
So you have to have received 20k AND 200 payments? Or is it one or the other? I think that's what galactiboy is saying. Just want to confirm?

WolfPredatorAVPR
02-02-2012, 06:12 PM
Another stupid question but if I have not heard from paypal as of yet does that mean I am clear for the 1099? I added up all my transactions to being 183 and a few grand under 20k in sales...which is no where near profit dollars. I sound like another bafoon but I have heard nothing about this up till just right now. Glad I decided to take a small break on my ebay sales toward the end of the year.

Star Puffs
02-02-2012, 06:16 PM
So you have to have received 20k AND 200 payments? Or is it one or the other? I think that's what galactiboy is saying. Just want to confirm?

200 transactions alone is a trigger. I am absolutely certain that I received no more than $5,000 last year, but still had them requested my SSN.

hydrobud
02-02-2012, 06:19 PM
you need to speak to an accountant. i believe you would only pay on the profit you claim since they are collectibles. i believe you can also get a deductible if you lose money on selling the same collectibles. bottom line is talk to your account or whomever does your taxes

toyadventurer
02-02-2012, 06:20 PM
Another stupid question but if I have not heard from paypal as of yet does that mean I am clear for the 1099? I added up all my transactions to being 183 and a few grand under 20k in sales...which is no where near profit dollars. I sound like another bafoon but I have heard nothing about this up till just right now. Glad I decided to take a small break on my ebay sales toward the end of the year.


All 1099's are due out by January 31st so you are most likely ok. You can also check the history link on your Paypal account where you will see another link for tax documents. Mine said "you have no 2011 tax documents". :)

mmmmBrains
02-02-2012, 06:21 PM
200 transactions alone is a trigger. I am absolutely certain that I received no more than $5,000 last year, but still had them requested my SSN.

Feck. No good. :panic:

WolfPredatorAVPR
02-02-2012, 06:51 PM
All 1099's are due out by January 31st so you are most likely ok. You can also check the history link on your Paypal account where you will see another link for tax documents. Mine said "you have no 2011 tax documents". :)

I see that now with no documents in the folder. What is funny to me is paypal says on the rules that you have to have over 200 transactions in addition to over 20k in sales. They are saying it requires both on the page I was reading. Weird that people with 200 transactions, even with low sales are getting them. I was about 15 under in the transactions dept and around 3k in sales.

mmmmBrains
02-02-2012, 06:55 PM
All 1099's are due out by January 31st so you are most likely ok. You can also check the history link on your Paypal account where you will see another link for tax documents. Mine said "you have no 2011 tax documents". :)

Mine says I have no 2011 tax documents, but they did ask for a SS awhile back which I gave them. Hmmm. Guess I just wait for the form?

ashkanls
02-02-2012, 07:42 PM
Mine last night mine said no tax documents but I got my 1099 in the mail today! So those of you who think you are opff the hook because it doesn't say it dont hold your breath. I had 4 months where I had more then $8,400 in volume each.

Buttmunch
02-02-2012, 07:47 PM
What the heck are you guys buying and selling? :lol $20,000 is a LOT. Period.

mmmmBrains
02-02-2012, 07:48 PM
I didn't sell anywhere near that amount. More like around 6k.

VS1976
02-02-2012, 07:50 PM
Does this affect Canadians?

Buttmunch
02-02-2012, 07:50 PM
Does this affect Canadians?

Do you pay US income taxes?

mmmmBrains
02-02-2012, 08:16 PM
Do you pay US income taxes?

:rotfl :lol

VS1976
02-02-2012, 08:18 PM
Do you pay US income taxes?

Used to...:pfft::monkey1

Roc74
02-02-2012, 09:52 PM
you need to speak to an accountant. i believe you would only pay on the profit you claim since they are collectibles. i believe you can also get a deductible if you lose money on selling the same collectibles. bottom line is talk to your account or whomever does your taxes

You can talk to your accountant all you want, but if you dont have the paperwork to support your claims, then it wont help. How many people keep all thier reciepts of Collectibles they purchased many years ago?

I wonder if you can ask Sideshow to reprint reciepts for you from certain years?

hydrobud
02-03-2012, 06:06 AM
You can talk to your accountant all you want, but if you dont have the paperwork to support your claims, then it wont help. How many people keep all thier reciepts of Collectibles they purchased many years ago?

I wonder if you can ask Sideshow to reprint reciepts for you from certain years?

i believe in your SS account there is a order history and PP has a order history as well. he needs to talk to his accountant to find out the rules on buying and selling collectibles.his PP deals may only reflect part of the picture . im sure all his buying did not happen through PP. if the overall is a loss he can get a deductible. he needs to find out what the rules are hence needs to speak to a accountant. maybe if he sold a car at below book value may be a game changer wether he owes or is owed. only his accountant will know for sure.

Star Puffs
02-03-2012, 06:16 AM
How many people keep all thier reciepts of Collectibles they purchased many years ago?

Those of us who are accountants. :D

King Darkness
02-03-2012, 07:20 AM
So, what you're saying is $200 and 20,000 transactions???

That makes no sense at all.

Kingofthehill78
02-03-2012, 08:50 AM
So, what you're saying is $200 and 20,000 transactions???

That makes no sense at all.

No, In order to trigger the tax form issue from PayPal you have to sell 200 or more paypal transactions ( either through eBay or off) AND make $20,000 in sales. So say you sell 180 items last year and make $75,000 you will not trigger it . Or if you sell 600 items and earn $18,000 it doesn't trigger. It only triggers if you sell over 200 items and earn $20,000 in a single year.

galactiboy
02-03-2012, 09:10 AM
200 transactions alone is a trigger. I am absolutely certain that I received no more than $5,000 last year, but still had them requested my SSN.

It may be a trigger to request your SSN (which I don't plan on giving them)... but they do not report anything to the IRS unless you have 200 sales transactions and $20,000 in sales.

So if you do not meet both one of those criteria you are safe for this year.

karamazov80
02-03-2012, 09:23 AM
So, what you're saying is $200 and 20,000 transactions???

That makes no sense at all.
I've got 23,000 transactions, but only for $45. I'm good :yess:

galactiboy
02-03-2012, 09:25 AM
Sorry to ask you this are you referring in your quote to 200 incoming payments and 20,000 correct? While on the phone just a bit ago with PayPal they said gifts received do not count and payments going out either
Only when you are the recieving end they said.

Yep, that is correct... gifts do not count and its only payments coming into you; ie you were the seller.

Star Puffs
02-03-2012, 05:08 PM
It may be a trigger to request your SSN (which I don't plan on giving them)... but they do not report anything to the IRS unless you have 200 sales transactions and $20,000 in sales.

So if you do not meet both one of those criteria you are safe for this year.

You and Spekerol are correct. I assumed the SSN request was a 1099K trigger, but as someone else pointed out, the deadline is past and I for one have not received any 1099K or notice thereof at the PayPal site.

I guess the IRS considers $20,000 a reasonable materiality threshold and the 200 transactions signals a recurring business activity.

This is why I am not a tax accountant by the way. That takes a special breed. :D

phobicsquirrel
02-03-2012, 06:13 PM
Dang, that really bites. Another reason why I won't use paypal with my bank account. There are thousands of complaints against them and the way they operate. Not saying that it's their fault on the tax thing just in general. I also had an account years and years ago and got really screwed by them with a sale I made via ebay. I mean I gave them all documentation including confirmations, signature confirmations, pictures and it wasn't enough. The buyer got their money back, I never got the item back and I was out both the item and the money. I couldn't even talk to them about it.

MadCow
02-03-2012, 06:39 PM
I've been a seller on eBay for 14 years and I've NEVER hit 20k in sales ever.

mmmmBrains
02-03-2012, 06:46 PM
Sweet ____. I'm in the clear....

*ninja vanish*
http://www.lafinjack.net/images/random/ninja_poof.gif

ashkanls
02-03-2012, 09:13 PM
Be advised your car registration can be used as a write off because you paid the state.

DarthKry
02-04-2012, 01:50 AM
Some of you guys are cold hearted.. I've had a growing collection of over 12 years which I ended up selling part of to make ends meet; my own personal goods which were purchased using my hard earned already taxed money. Yes $24,000 seems like alot of money, but I did not pocket anywhere near that amount. Just think of what your collection is worth and I've seen some of these huge collections. Imagine you had to sell your beloved collection because you needed to pay rent and other expenses so you and your kids could have a place to live. You know how rotten of a father I felt when my teenage daughter wanted a sweet 16 party and all I could give her was a small house party with pizza and chips. She was so embarrassed that she only invited 4 friends. Imagine explaining to that girl that dad is having a hard time right now because of the economy. Then having her tell you, "well can't you sell some more of those toys?" I was never a business; I never intended it to be one. I needed to survive, so I sold my prized stuff. Now it turns out that I will have to pay more money then what I actually made. How is any of this funny? Instead of trying to help with supportive comments, I get wise cracks and jokes from some people. How dare you.. Have you no hearts. This is really depressing for me and has me in shambles at the moment. I don't have the money to cover what they will charge me. What will I do come April 14th? Be in debt, hit with penalties and interest? Which I will never pay off.. Maybe even go to prison? My wife is not speaking to me as a result of this. She says I was irresponsible. I seriously am on the brink right now. I figured people in this community would understand my situation since I collect what you collect and offer me some sort of moral support. I do thank those of you who have offered suggestions and actions to take. Thank you. I'm sorry if I sound crazy right now, but I'm just about at the end of my rope here.

tnaig001
02-04-2012, 02:52 AM
Some of you guys are cold hearted.. I've had a growing collection of over 12 years which I ended up selling part of to make ends meet; my own personal goods which were purchased using my hard earned already taxed money. Yes $24,000 seems like alot of money, but I did not pocket anywhere near that amount. Just think of what your collection is worth and I've seen some of these huge collections. Imagine you had to sell your beloved collection because you needed to pay rent and other expenses so you and your kids could have a place to live. You know how rotten of a father I felt when my teenage daughter wanted a sweet 16 party and all I could give her was a small house party with pizza and chips. She was so embarrassed that she only invited 4 friends. Imagine explaining to that girl that dad is having a hard time right now because of the economy. Then having her tell you, "well can't you sell some more of those toys?" I was never a business; I never intended it to be one. I needed to survive, so I sold my prized stuff. Now it turns out that I will have to pay more money then what I actually made. How is any of this funny? Instead of trying to help with supportive comments, I get wise cracks and jokes from some people. How dare you.. Have you no hearts. This is really depressing for me and has me in shambles at the moment. I don't have the money to cover what they will charge me. What will I do come April 14th? Be in debt, hit with penalties and interest? Which I will never pay off.. Maybe even go to prison? My wife is not speaking to me as a result of this. She says I was irresponsible. I seriously am on the brink right now. I figured people in this community would understand my situation since I collect what you collect and offer me some sort of moral support. I do thank those of you who have offered suggestions and actions to take. Thank you. I'm sorry if I sound crazy right now, but I'm just about at the end of my rope here.

Hang in there.


You know how some of these guys are like. Put your *idiot* filter on and ignore them.

It's hard, I can understand and your wife not speaking to you is probably not helping.

Compartmentalise it. Don't let it get to you.

Can you seek legal aid? Ask what can be done.

It's common sense to say that receiving 24k doesn't equal having 24k profits.

I'm sure you'll come out of this.

Hang in there.

jye318
02-04-2012, 03:18 AM
Some of you guys are cold hearted.. I've had a growing collection of over 12 years which I ended up selling part of to make ends meet; my own personal goods which were purchased using my hard earned already taxed money. Yes $24,000 seems like alot of money, but I did not pocket anywhere near that amount. Just think of what your collection is worth and I've seen some of these huge collections. Imagine you had to sell your beloved collection because you needed to pay rent and other expenses so you and your kids could have a place to live. You know how rotten of a father I felt when my teenage daughter wanted a sweet 16 party and all I could give her was a small house party with pizza and chips. She was so embarrassed that she only invited 4 friends. Imagine explaining to that girl that dad is having a hard time right now because of the economy. Then having her tell you, "well can't you sell some more of those toys?" I was never a business; I never intended it to be one. I needed to survive, so I sold my prized stuff. Now it turns out that I will have to pay more money then what I actually made. How is any of this funny? Instead of trying to help with supportive comments, I get wise cracks and jokes from some people. How dare you.. Have you no hearts. This is really depressing for me and has me in shambles at the moment. I don't have the money to cover what they will charge me. What will I do come April 14th? Be in debt, hit with penalties and interest? Which I will never pay off.. Maybe even go to prison? My wife is not speaking to me as a result of this. She says I was irresponsible. I seriously am on the brink right now. I figured people in this community would understand my situation since I collect what you collect and offer me some sort of moral support. I do thank those of you who have offered suggestions and actions to take. Thank you. I'm sorry if I sound crazy right now, but I'm just about at the end of my rope here.

Don't be mad, when I post something here ppl do stupid common, just ignor them.

DarthKry
02-04-2012, 03:36 AM
Thanks guys.. Yeah I need to take a breather from this. I'm on over reacting mode. Wife is freaking out causing me to do the same.

gagaliya
02-04-2012, 06:30 AM
Some of you guys are cold hearted.. I've had a growing collection of over 12 years which I ended up selling part of to make ends meet; my own personal goods which were purchased using my hard earned already taxed money. Yes $24,000 seems like alot of money, but I did not pocket anywhere near that amount. Just think of what your collection is worth and I've seen some of these huge collections. Imagine you had to sell your beloved collection because you needed to pay rent and other expenses so you and your kids could have a place to live. You know how rotten of a father I felt when my teenage daughter wanted a sweet 16 party and all I could give her was a small house party with pizza and chips. She was so embarrassed that she only invited 4 friends. Imagine explaining to that girl that dad is having a hard time right now because of the economy. Then having her tell you, "well can't you sell some more of those toys?" I was never a business; I never intended it to be one. I needed to survive, so I sold my prized stuff. Now it turns out that I will have to pay more money then what I actually made. How is any of this funny? Instead of trying to help with supportive comments, I get wise cracks and jokes from some people. How dare you.. Have you no hearts. This is really depressing for me and has me in shambles at the moment. I don't have the money to cover what they will charge me. What will I do come April 14th? Be in debt, hit with penalties and interest? Which I will never pay off.. Maybe even go to prison? My wife is not speaking to me as a result of this. She says I was irresponsible. I seriously am on the brink right now. I figured people in this community would understand my situation since I collect what you collect and offer me some sort of moral support. I do thank those of you who have offered suggestions and actions to take. Thank you. I'm sorry if I sound crazy right now, but I'm just about at the end of my rope here.

Sorry to hear about your situation. But I dont get why you keep ignoring the advice offered here which is to see a tax accountant, they charge ~$100 and can get this sorted out in no time.

Hirogen
02-04-2012, 02:05 PM
Some of you guys are cold hearted.. I've had a growing collection of over 12 years which I ended up selling part of to make ends meet; my own personal goods which were purchased using my hard earned already taxed money. Yes $24,000 seems like alot of money, but I did not pocket anywhere near that amount. Just think of what your collection is worth and I've seen some of these huge collections. Imagine you had to sell your beloved collection because you needed to pay rent and other expenses so you and your kids could have a place to live. You know how rotten of a father I felt when my teenage daughter wanted a sweet 16 party and all I could give her was a small house party with pizza and chips. She was so embarrassed that she only invited 4 friends. Imagine explaining to that girl that dad is having a hard time right now because of the economy. Then having her tell you, "well can't you sell some more of those toys?" I was never a business; I never intended it to be one. I needed to survive, so I sold my prized stuff. Now it turns out that I will have to pay more money then what I actually made. How is any of this funny? Instead of trying to help with supportive comments, I get wise cracks and jokes from some people. How dare you.. Have you no hearts. This is really depressing for me and has me in shambles at the moment. I don't have the money to cover what they will charge me. What will I do come April 14th? Be in debt, hit with penalties and interest? Which I will never pay off.. Maybe even go to prison? My wife is not speaking to me as a result of this. She says I was irresponsible. I seriously am on the brink right now. I figured people in this community would understand my situation since I collect what you collect and offer me some sort of moral support. I do thank those of you who have offered suggestions and actions to take. Thank you. I'm sorry if I sound crazy right now, but I'm just about at the end of my rope here.

I hear you, so sorry you are going through this! I also received a notice from Paypal saying I needed to supply my SSN. I did b/c I kept getting notices. But I have not heard anything since. I have been selling on ebay mostly. All items I sold I have collected throughout the years taking up too much room at present time. I ended up taking a loss on I would estimate 95% of it. I have had a lot of transactions but have not made anywhere near $20,000.

I know it is ten times worse when your wife is freaking out, that directly impacts you.:gah:

Hang in there.

Kozin
02-04-2012, 02:32 PM
It does suck, I'm hit by the same deal, and got the email last week when I was in the middle of calculating my taxes. <insert profanity here>

While I'm not an accountant, or tax professional, what I've been able to gather is that even if you are not a business, you have to report all income. They're looking at profit. By law you are responsible to report any sale in which you made a profit.

So there's several things here.

Part of your sale includes shipping. You'll need to have all your ACTUAL shipping costs for this. (If you charged $5 for shipping, received $5 for shipping in PayPal, but paid $6 for shipping, the $6 is the deduction)

You use PayPal and ebay fees as deductions.

Actual sale of the item - (original cost of item + shipping + fees) = profit. It's the profit that factors into your income. (The actual sale of the item is the item selling price + shipping charged)

Unfortunately you have to remember the cost of what you paid for the item. And the loose parts I sold from my collection? Oh dear God I'm gonna start drinking now!

Form C is to report gain or loss from a business, but I believe there's one for personal.

Calling yourself a business now to try and save some funds or get tax breaks won't work for 2011 taxes as you would have needed to been a business last year. PLUS, you'll now have to show invoices for the purchases, and if you sold to anyone in the state you live, you are guilty of failing to pay state sales tax. You'll also need to pay for licenses (CT has an LLC fee of $250 every year). I have an official business for the shows I do and just like the folks that are online resellers, there's a lot to it.

Again, I have the same issue as I'm selling off over 20 years of my collection. Figures, loose parts, Legos, etc. Who'd a thunk I'd ever sell that much on ebay? More so, where's the cash?

I can't blame PayPal for this. It's our elected officials and various federal agencies that wanted a bigger slice of the 99%'s pie. What pisses me off about ebay is they no longer allow money order or check, and given that the feds never investigated them for it, helps me put 2 + 2 together.

John

EXOTICLEX
02-05-2012, 07:27 PM
darthkry just find you a CPA....he'll get you to where you are only taxed on what you made a profit on....it's their job....they can do it.

Kanjar210
02-05-2012, 10:43 PM
$20.000 is not much at all. I hit $23.000 is sale on paypal . But $5000 was shipping cost and other $1700 or more was fees so profit was not much. Paypal should have deducted shipping fees. They are the one how made money on shipping not me. Why should we hire an accountant for this When you sell a Hot toys figure the profit is not much. Paypal have a horrible way to determine sale last year they fixed it this year. I feel they screwed everybody and made it hard to see what was sold. They they laughed all the way to the bank

ashkanls
02-05-2012, 10:48 PM
Whats funny is that I broke it down month to month and the 5 months I balanced last night the numbers were off that they claimed on my 1099. For example they claim I sold $4500 in October. I added up the sales totals 6 times in case I made a mistake. My total was $4300 everytime! WTF are they looking at?

karamazov80
02-05-2012, 10:50 PM
Sorry this is affecting you so directly Darthkry. Taxes are a real _____ sometimes. But the last thing you should do is let a bunch of jokers on the forum get you down. This does suck for you, and hopefully you can find an accountant that can help you sort through this to minimize the financial hit.

DarthKry
02-05-2012, 11:45 PM
Thanks again guys..
Ash here is the run down of what paypal did... (given, this is not thier fault as some believe-It's a new law pushed on them to enforce)

Any credit/refund you get is counted at "income". Which I don't think it's fair since it was your money that was originally sent. Which is returned to you then taxed. So let's say you buy a figure, it ends up coming broken or not as described. You file a claim with paypal/ebay. They determine that you are correct and refund you the amount in your favor, that refund is included in you're income amount by paypal. They also don't deduct thier fees from that amount and leave thier fees on as your income. The best thing is they cannot count "gift" payments. Thank god for that.

Crazy thing is we are all operating illegally here, since I'm sure not many of us hold licenses in our respective states to do online business. That means if you sell on ebay without a licenses from you're state, you can be fined and cited by your state.

ashkanls
02-06-2012, 01:20 AM
Thanks again guys..
Ash here is the run down of what paypal did... (given, this is not thier fault as some believe-It's a new law pushed on them to enforce)

Any credit/refund you get is counted at "income". Which I don't think it's fair since it was your money that was originally sent. Which is returned to you then taxed. So let's say you buy a figure, it ends up coming broken or not as described. You file a claim with paypal/ebay. They determine that you are correct and refund you the amount in your favor, that refund is included in you're income amount by paypal. They also don't deduct thier fees from that amount and leave thier fees on as your income. The best thing is they cannot count "gift" payments. Thank god for that.

Crazy thing is we are all operating illegally here, since I'm sure not many of us hold licenses in our respective states to do online business. That means if you sell on ebay without a licenses from you're state, you can be fined and cited by your state.



I actually factored all the refunds and fees in and out and the numbers dont match up. Im not a math major but this is easy stuff to figure out and Paypals totals are off somehow from what I see printed in front of me. Just a FYI to everyone.

jye318
02-06-2012, 02:09 AM
So if we don't receive 1099k from Paypal, that means we don't need to file?? I am very worry about this since I been buying a lot, ALS sold some statues lately.

DarthKry
02-06-2012, 07:04 AM
The law states that if you have any income at all, that you have to report it. Paypal will not submit your info to the IRS unless you meet BOTH of the triggers which is 200+ sales and $20,000 or more. But in the eyes of the IRS, you have to declare it no matter what, they just have no way of knowing unless someonw like paypal reports it. For us that did get the 1099 the scary part is an audit where they will go back and check since they now know that you conduct online sales. To be honest, for those of you that did not get one, I would file it anyways to be safe. This sounds like a crackdown to me..

Ash, you need to call paypal and find out why you're numbers don't add up. I think some of mine were different also, but they were under from the number I was adding in some cases.

galactiboy
02-06-2012, 09:21 AM
Yeah, the way Paypal is just dumping a huge number on the IRS is completely messed up. You would think they could at least parse out shipping costs in order to give at least a semi-realistic view of what was bought and sold.

But as others have said I'm sure it is something you can sort out to get the taxed amount lower; but of course that will cost you some money in consulting with a professional.

I know I will be closely watching my numbers and making sure I don't go over either one of those milestones this year.

hehateme23
02-06-2012, 09:25 AM
The number paypal gives you I believe is the total amount you received. The paypal fees and shipping costs are included in that total and should be used when you are calculating your deductions.

But if the numbers are way off still, then Paypal should be contacted. (Although I am not sure how they could have messed it up since you're history of transactions are right there). :dunno

Mookeylama
02-19-2012, 12:05 AM
Yeah, the way Paypal is just dumping a huge number on the IRS is completely messed up. You would think they could at least parse out shipping costs in order to give at least a semi-realistic view of what was bought and sold.

But as others have said I'm sure it is something you can sort out to get the taxed amount lower; but of course that will cost you some money in consulting with a professional.

I know I will be closely watching my numbers and making sure I don't go over either one of those milestones this year.

me too. and just to make sure i've got it right... the whole 200+ transaction AND $20,000+ is NOT just stuff sold on eBay only? it's transactions on Paypal right? by that i mean, if i stayed off eBay completely and just sold at say forums, or other online auction sites, if i took Paypal as the payment method and had 200+ separate transactions on PAYPAL that totaled more than 20k, then i'd get reported. is that correct? thanks!

edit: oh and i read somewhere that Paypal now charges fees even on gifts. that info sounds wrong to me. anyone hear that?

DarthKry
02-19-2012, 01:32 AM
Yes I had a bunch of sales that I just made and I asked people to pay as gifts if they did not want to pay the fee. So I did not charge them for it. I was hit with the fee anyhow. Now I'm out $80 in fees from sales which I would have just worked into the sale cost.. a-holes

j97e1
04-08-2012, 01:12 PM
UPDATE - From the Paypal FAQ :
"...
Do I have to include the amounts from Form 1099-K on my tax return?

While the IRS has asked that taxpayers enter zero ($0.00) on the line that says "Merchant card and third party payments." (i.e., amounts from Form 1099-K) they did not change the requirements for payors, such as PayPal, to file Form 1099-K. Please consult your tax advisor or the IRS for additional clarification of your tax obligations. "

mightyq
04-08-2012, 03:31 PM
This just sucks guys, game has changed forever. Are "gift" payments taxable?