Paypal Changes for 2022

Some of us unfortunate to live in a few select states were already subject to the dreaded PayPal 1099-k tax forms: HERE

Copy / paste:

Several states have already closed this reporting loophole on the state level:

• Maryland, Massachusetts, Mississippi, Vermont, and Virginia require a 1099-K to be filed with the state tax agency if a TPSO pays a state resident $600 or more during the year.
• Illinois and New Jersey have a $1,000 1099-K threshold (plus, for Illinois, a requirement of at least four transactions).
• Arkansas has a $2,500 threshold.
• Missouri has a $1,200 threshold.

So, what's the solution?  Do we have to keep track of what we paid for an item vs. what we sold it for or won't that matter?  If you sell $5,000 worth of equipment this year, you'll get a 1099-K for $5,000 for additional income?

Unfortunately there is no way out. You have to keep track of everything and report everything. I had a thread running in here last year: 

Got it.  It looks like we have to file a schedule C to list cost of goods sold and can write off travel expense, packing materials, etc.  Seems like a real pain, but the only way to keep from paying tax on the total amount listed on the 1099.