Paypal Changes for 2022
If I understand this correctly, Paypal, along with all on-line payment sources like Venmo, etc. will now be sending out 1099 forms for all payments totaling $600 you receive in 2022 for goods or services. The only way around this is to use Paypal friends and family for payment which eliminates any buyer protections. Is everyone aware of this?
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You could ask for interesting trades of "X, Y or Z" or you could ask for your basis and ask that the buyer donate $X to a charity (of your choice) and include the charity receipt with their payment prior to shipping. OTHERWISE, someone would be trying to EVADE income taxes rather than to AVOID or DEFER income tax. Quite a different matter.
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So, if you buy a piece of gear for $1,000 and sell it for $1,500 you have a $500 profit. Depending on your tax bracket you would owe between zero and $185 (37%) in income tax. You might owe some state income tax as well depending on where you live. Would anyone here find this offensive? Paying around $200 in income tax because a statistical outlier of a piece of gear appreciated?
This is a nothing cheeseburger...its not a big deal to pay income tax as a hobbyist if you get lucky and something appreciates. If its a big deal, start a business, pay the fees necessary and set up shop. It looks easy and is hard as heck to make money in the audio business.
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You can pay a few dollars in income tax on the absolutely rare occurrence that a couple of items here or there MIGHT have appreciated enough to generate a profit. Senseless handwringing. |
I agree with ghasley that this is a nothingburger. Here' why. The following assumes that you buy and sell gear as a hobby and that you do not have a business buying and selling things like amps and DACs. For 99% of the gear you sell you will take a loss. When you report your taxes you will fill out your form and show that you took a loss on the items you sold. Therefore, no taxes due. If you sold 10 pieces of gear and took a loss on 9 of them you can use the total loss amount to offset the gain you made on one piece. No tax due again. You do not need the receipt. This is because you do not send copies of your receipts when you file your taxes. The only time you might possibly need a receipt is if you get a TCMP audit (Taxpayer Compliance Measurement Program) where an IRS agent will go through your return line by line. This is very rare but if it happens you can show the agent that the retail price of the item is higher than the price you sold it for.. Any documentation will do - i.e. magazine review, internet review, audio buyer's guide, etc. If you bought it used you can probably locate a record of the transaction (email confirmation for example) to show that you sold it for less than you bought it for. Even if you have no records there's a miniscule chance that the agent will sweat you about it. They've got much bigger fish to fry. Just treat them with respect and don't piss them off. I've had a TCMP audit and it's no fun but I can tell you that the agent is way too busy to be concerned about a few pieces of audio gear. They also operate by using common sense. Everybody knows that audio gear depreciates over time and trying to charge you income tax on something that obviously depreciated would never stand up if you contest the audit.. In other words, relax. When you file your 1040 for 2022 and you have a few 1099s for audio gear, just show that you sold each item at a loss. It's really that simple. Nobody will pay taxes on hobby items that they bought and subsequently sold at a loss. Have a beer. Listen to some Trip Hop. It's going to be OK. |
We need an "Amplified Politics" or "Political Speakers" or "Vintage Views" forum/Topic out here. All political commentary would have to go into that forum, and violators would be suspended for a week. There's no reason for so many of these threads to turn toxic. (It probably doesn't help for me to point out that it's almost always one "side" that starts it.) As for many, music and audiophile culture is a refuge for me during these difficult times. It's so depressing to see the same hostile, angry, and too often uninformed nonsense dragging down so many threads. |
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One, two, three, four Let me tell you how it will be Should five percent appear too small I’ll tax the street ’Cause I’m the taxman Don’t ask me what I want it for Now my advice for those who die (taxman)
Songwriter: George Harrison
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I live in a strange thing called society. You should try it sometime.. |
@nonoise it is not unpatriotic to try to avoid paying what you can. I suggest everyone who thinks otherwise to pay more than you should. They will allow you to do that if you feel so strongly. We have roughly half the nation that pays nothing into income taxes while at the same time chanting for the rich to pay "their fair share". It has gotten so absurd that people who pay no income tax are receiving money from other taxpayers for their decision to have a child. People chanting fair share that don't realize the top 1% account for 70% of the monies paid into federal treasury. For some reason a political segment believes there is a limited amount of money and if that rich arsehole weren't so selfish I'd be rich too. It doesn't work that way. Our federal government is bloated and it's tax laws are what allows it to be bloated. If you don't believe me look at maps by county + wealth over the last 6 decades. That wealth was distributed across the nation. Today the richest counties are congregating around DC. I don't have a problem paying taxes; I have a problem paying for mass bureaucracy and other people's decisions in life. If you choose to have a kid, great! I don't want to pay for that choice. |
@taxguy I heard about this tax change on YouTube and immediately thought of a couple points:
My question to you... If audio gear (or anything else we sell) generates one of these 1099’s, does depreciation need to be factored in? That could significantly reduce/eliminate the value of the original cost - resulting in the entire transaction being taxable gain. Example: In 2016, I buy a new amp for $3000. Depreciation schedule for electronics is short (think maybe only a couple years), so in 2022, that item is likely fully depreciated. I sell it in 2022 for $4000 (due to it’s popularity and inflation). Can the gain be offset by the original cost in this case?
@nonoise Americans are always on the lookout for government tyranny, because patriots and government are usually at odds with each other. Governments endeavour to control, while patriots endeavour toward freedom. Example: The 2nd US constitutional amendment provides the right to be free of governmental infringement to maintaining a weaponized civilian militia specifically for the purpose of defending against tyrannical government. US founding fathers had the foresight to prepare for this by making it the 2nd amendment (just after free speach) - that’s how important it is. |
It seems like this is to help get a little more revenue from cottage type businesses, but will be another way the IRS can flag any one of us. This is just a quick search of the taxes we already pay...
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Yes they will report and send you a 1099k but for personal items you most likely bought it for a similar price or maybe even more so no gain, no tax. Notice how Amazon and Ebay now charge the buyer sales tax? This was not the case before but stems from the Wayfair vs south Dakota ruling in 2018. For sites that do not collect sales tax I imagine states could use this form to collect thier share. AND you will pay sales tax always but only the buyer pays. That's where this new ruling will get it's money.
Imagine paying 8% more for everything you buy on Agon? |
Brainwashed Infowars tools. How did they get into audio?
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Again, I think that those of us who may multiple times a year or maybe one to two times per month sell gear, may now have been put into the audio “business” by the IRS. If they want to play it that way, then I can deduct my expenses involved in this business. These are the unintended consequences of over regulation. |
Re the Form 1099 reporting to the IRS, some concepts above are being mixed together. The amount on the Form is not "income", it's only the total "gross proceeds from the sale(s)". To determine income (actually "gain"), you subtract your cost of the item. It's a lot like selling a share of stock or your house, the broker or escrow that closes the transaction reports to the IRS the gross proceeds from the transaction. It's then up to the taxpayer to report (generally on Schedule D, Capital Gains and Losses) both the proceeds and the cost of the asset sold, with only the excess of proceeds over cost being gain (income). So yes, you generally need to keep evidence of what you pay for items you sell. If you are not in the "business" of selling (a muddy concept beyond what I can detail here), gains are taxable and losses are not deductible, but you may be able to offset losses against your gains ("see your tax advisor"). If you are in the "business" (probably rare for A-Gon), you get taxed on gains and deduct losses, and may be able to deduct losses against other income ("see your tax advisor"). Again, it's similar to selling stock through a broker or your house where an escrow agent closes the sale by processing payments and documents, and then reports gross proceeds to the IRS, and you have to figure out the gain, if any. Hope this helps. |
I think what UPS and FedEx are really saying about damage is that they don't insure against damage of the contents unless the packaging is damaged enough to damage the contents. They don't know how the shipper has packed things, and they aren't willing to get into an (irresolvable) dispute about the adequacy of packaging for the item shipped, so they won't insure against damage of contents unless you pay them to package it. |
That is a political ploy to squeeze you on everything , UPS just pulled another one. I asked for insurances on the Duelund Loudspeaker purifiers I sell and they asked me how well they are packed, they said we Donot cover for damage just for theft or loss ,what kind of BS is that , what if I am selling a $5k amplifier and they damage it ,tough luck I think I Better see if FedEx too may now hav3 the same policy this is getting crazy and over $1 per hundred , you need to buy from a outside insurance company I think I read FedEx too is pulling this crap, Ask first !! |
Another Mensa candidate. |
My fifth-grade (1959-60) teacher use to proclaim a loaf of bread had 39 taxes hidden in each loaf. Now it is up to 151 hidden taxes in same loaf of bread. My favorite tax saying is from the 1800’s ’Don’ tax me, don’t tax thee, tax the man hiding behind the tree.’ No one, that I know, of enjoys paying tax. It takes both houses of congress to pass new tax laws, after they make sure the maximum deductions apply to them. Kind of like the weather, complain all you want, but seek some shelter. Taxes are neither red nor blue, they are red, white, and blue. White socks, red necks, and blue-ribbon beer made this country great. |
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This is because of a deal that Sleepy Joe engineered early last year. 2021 was the last chance to sell. your old stuff. I did. The worst aspect is that you get to pay tax on the inflation the politicians created. Sell something for $200 that cost $50 (with receipt) in 1980. IRS treats it as gain even though it’s treading water. Back to the black market and barter economy. The only result will be fake bills of sale de facto. Lotso luck not paying tax on gains because of amateur status. Leave PayPal out of this PITA of them too.
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’Gon would have to be one of the most heavily politicised platforms on the planet, while also seeming to possess a seductive allure that attracts nutjobs like moths to a flickering flame. The outcome - threads resembling trench warfare. Why this is so has great research potential for many a doctoral thesis.. |
