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The truth about the 1099-K thresholds and if you have to report that income

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It's no wonder we have no idea what's going on. They keep changing the 1099-K threshold regulations only to later kick the can down the road. In this video I explain how to deal with all that commotion.
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TIMESTAMPS
0:00 - Introduction & Common Misconception About 1099
0:13 - Host Introduction
0:21 - Hype Around 1099-K & IRS Targeting
1:11 - Explanation of 1099 Forms
1:25 - How the IRS Tracks Income
2:12 - Misconceptions About 1099-K Thresholds
2:30 - Changing Thresholds and Reporting Confusion
3:08 - Importance of Reporting Income
3:56 - Handling IRS Letters
4:42 - Filing Amended Tax Returns
5:06 - State-Level 1099-K Requirements
5:17 - Conclusion & Call to Action
5:39 - Outro & Social Media Plug

Опубликовано:

20 авг 2024

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Комментарии : 95

@JamesBondDZero7Mi6 7 месяцев назад

Thanks for the update. I still don't like this 1099-K deal for a person selling a few things lying around the house on platforms like eBay, etc. For people like this, it's more work for zero gain. It's about the same as having a garage sale. There just isn't any profit in selling things you paid full price for (including tax) when they were new. For such smaller sellers, there aren't enough deductions to bother with vs. the standard deductions. I'd be happy if they'd just settle it at $10k.

@vegas_party_animal7737 7 месяцев назад

Agreed, I could have seen them even go down to $5K but it should have went for $20K to $10K and then in a few years later they can drop it down to $5K

@ItsDan123 7 месяцев назад

The standard deduction isn’t relevant for this, your costs which as you said for personal items almost always exceed the sales price apply before anything to do with the standard deduction deduction.

@jeffreyhenry9881 6 месяцев назад

It isn’t just another step for adding the 1099k to your taxes (even if a profit isn’t made). You have to be prepared to prove you didn’t make a profit. For example, do you have a receipt for that 5 year old iPhone you bought new than sold on eBay for a fraction less? I don’t have these…

@exceedinglyaverage1179 5 месяцев назад

Commie bastards

@kellyschmehl9436 2 месяца назад

What’s the point of selling a few used items that I paid full price for if the IRS is going to be breathing down my neck? It’s not worth it. I would rather throw everything in the trash then deal with them. 😡

@TheChaChingKing 7 месяцев назад

I am shocked at how many people think they don't owe taxes if they didn't get a 1099. Scary.

@GermanShepherdDaphne 5 месяцев назад

Irs is a scam

@pwilson2345 5 месяцев назад

FACTS😂😂

@cupidok2768 20 дней назад

If true why don't you Sue them

@phrozencrew6496 3 дня назад

Build back better pushed this through.

@phrozencrew6496 3 дня назад

BBB Plan pushed this through!

@cupidok2768 3 дня назад

@@phrozencrew6496 Why does man say it's a scam but the scam can be on going so long and nobody is stopped by the government

@Ajmat21 6 месяцев назад

They say that they pushed the threshold back another year but I sold 13k on ebay and just under 1k on paypal in 2023 and got 1099k from both. So they may say 20k is the threshold but doesn't matter, they will still send you a 1099k. I was surprised to receive one.

@justinchorn432 6 месяцев назад

Me too....I sold $7,600

@notyourdadscpa 6 месяцев назад

Correct, they do not have their ducks in a row

@wayneguy6043 6 месяцев назад

Will you be surprised tomorrow when the sun rises?

@jacksycz 5 месяцев назад

@@justinchorn432 Ive got a friend thats sold a bit over 5 grand in gross sales... and im having to correct years of misinfo and get proper records to make sure everything is correct. COGS is a big pain point

@maxinef6654 4 месяца назад

Yup. Exactly.

@mschief-central4940 24 дня назад

For people who are selling their own possessions for less, mostly they won’t have receipts. Low income people in hud type housing, getting assistance like snap, they’re selling or setting up a donation for bills? They’re subject to recertification EIVs and that measly $600 to $1,000 if they’re lucky will jack rent, cut other assistance for a year. Plus most of those people are on social security under the threshold so they’re not filing federal taxes. Now they have to figure out a 1099k? This hurts those with the least.

@TJ-et8sw 3 месяца назад

It's my understanding that if you don't have a business ID, the IRS considers your side hustle a hobby and you can't deduct expenses or cost of goods sold. So the amount that you receive for the sale AND the shipping is treated as net profit and you have to pay tax on the whole amount.

@realaudioreviews 3 месяца назад

Completely wrong

@VENOM-_-15 7 месяцев назад

Thank you so much for this video!

@amberquibodeaux6717 7 месяцев назад

Thanks for this video!!

@maxinef6654 4 месяца назад

I was selling on eBay and was under the threshold and still received a 1099k. My sales ran around $2000 to $2500 per year.

@notyourdadscpa 4 месяца назад

Yes because the government keeps flip flopping and now the companies are totally disorganized with their 1099k processes 🤷🏼‍♂️

@ismaelreyes1226 4 месяца назад

I am confused, so if i don't sell over $20k, I don't have to report it?

@dn7783 6 месяцев назад

It is now $5000

@andreathecrazy4351 3 месяца назад

Will this also go for the 2025 threshold?

@blueghost4121 4 месяца назад

So if you don’t get a 1099-K the IRS doesn’t know?

@mr.brightside2665 6 месяцев назад

So basically it's to spot laundered money in 3rd party accounts by accounting the money your employer paid you and if you have money left over then that's unaccounted income therefore possibly tax evasion

@projectroots3546 7 месяцев назад

Do you think the idea that it will be reduced to $600 was to smoke out those taking advantage or not reporting as they should?

@Crazywaffle5150 7 месяцев назад

This makes it hard for people to sell their personal items because they dont have a receipt. Hobby sellers dont get tax deductions.

@notyourdadscpa 7 месяцев назад

The IRS prefers you to have evidence such as receipt, but I would still take the deduction even if you can't find one, as long it was a legitimate business expense.

@Crazywaffle5150 7 месяцев назад

@notyourdadscpa Yha, and if they decide to audit you without said evidence. You with get fined into oblivion. I wonder how many low income people or individuals on social security will get jail time.

@ItsDan123 7 месяцев назад

@@Crazywaffle5150you aren’t fined into oblivion nor does anyone not committing massive intentional evasion go to jail

@Crazywaffle5150 7 месяцев назад

@ItsDan123 OK, still no tax expert explains how to sell things without proof for getting deductions. I have looked into and ressurched this for the past few years. I'm a hobby seller my self, not a business. I sell things from my car projects on ebay to get money back. You can't even get deductions without being a BUSINESS. I'm not talking about item cost or declared value. I would not be able to get money back on shipping, supplies or ebay fee's. Wanna know why? Because I'm not a registered business. I'm just a person funding my hobby.

@Crazywaffle5150 7 месяцев назад

@ItsDan123 It's funny. People assume everyone is only selling as a full time soul proprietor. You can't just hop on with a CPA and get full benefits without meeting specific criteria. I don't have a problem with taxes or paying. I have a problem with TAX CODE.

@azmysouweha2093 5 месяцев назад

what's the difference if it's 600 or 20k, you have to pay taxes anyway

@Gustavo_Rojas 7 месяцев назад

Hello! I only made $8k and I am reporting it on my taxes. I understand I don't qualify for a 1099k...the question is...should I still add all the details as cost of goods, Ebay fees, shipping label fees, etc? I am married filing jointly... Thank you so much!

@ClarksQualityBookkeeping 6 месяцев назад

Report all expenses and deductions.

@ericlemmond 6 месяцев назад

I'm confused on what I need to do. I doordash occasionally but I only made $1500. Does that mean I won't get a 1099k form because I didn't pass the threshold of $20k? And if I don't get a form how do I report the earnings when I file my taxes?

@ClarksQualityBookkeeping 6 месяцев назад

You will not receive a 1099k but a 1099NEC from door dash. 1099k are for reporting credit card payments made to you.

@gigtrek3926 5 месяцев назад

for the 2023 tax year I received a 1099-NEC from Doordash and my earnings with them were $870

@rjlaxvespa1742 7 месяцев назад

If you're selling personal Goods, you may have paid much more than you realized in profit... so you're casual seller, may not owe taxes on some transactions... this doesn't apply to all transactions just some of them... there are people that are clearing their space of personal collections... I report all of my income from all my channels broken down by Channel... some realize more income than others...

@notyourdadscpa 7 месяцев назад

Exactly, it definitely opens the can of worms. They can all be dealt with on the tax return so that the appropriate amount of tax gets shown, the problem is it's not intuitive.

@zonk1477 4 месяца назад

If you paid more then it sold for you didn't realize any profit at all. But they still send you the form and you still are required to report. Reporting it on your taxes does not mean you owe any taxes. But it sure increases the costs on your end for reporting such a thing as turbo tax won't do this for free.

@joelouis9073 6 месяцев назад

Hey I got a 1099 from cash app and I don’t have a business its only for personal use like paying bills and buying things

@notyourdadscpa 6 месяцев назад

Then they messed up. You could either ignore it and explain later to the IRS that it was personal, or you could try to account for it on your tax return so that it satisfies their computers and also deduct it back out so you're not taxed on it.

@blueghost4121 4 месяца назад

Oh so I’ll just wait to amend the tax return, right? If I’m not reporting and receive penalty. Sounds easy.

@terrancecooley3165 7 месяцев назад

Last year the IRS sent me a tax bill because I went over the threshold and I didn't report my earning from lyft in 2020 so I ended up doing a amended tax return...😂😂😂😂

@notyourdadscpa 7 месяцев назад

You're not alone!

@Rivanni1 4 месяца назад

Okay, so how do I find Etsy's EIN? I didn't receive a 1099-K because I was below the threshold for selling. However, I did make over [amount] with all my independent contractor work.

@AlonsoMcElGuerrero 5 месяцев назад

I'm shocked that they sent me that 1099-K. my net income is less than 20000 but gross payment over 30000 . It was over 10000 what they charged their costumer working with Angi what can i do.?

@lisalange4922 6 месяцев назад

I have been reporting every year for the little we do... this year, I got one with 148 transactions and under $4500.00 , so are they making alot of mistakes sending them out.?

@notyourdadscpa 6 месяцев назад

Yes 🤦🏼‍♀️

@Aj-kp5fj 7 месяцев назад

Thanks for your informative tax info! I do my son's Ebay taxes and he'll be getting the 1099k this year so I'm ready. Could you possibly touch on 1099 nec sometime? I started doing Amazon vine and will receive the form. Confusion arises because I receive items, no money, in exchange for reviews. I've researched rather to call this a business with deductions, or is it a hobby? From what I've found, the IRS will tell me I'm wrong no matter which I choose. Now, to sign up for that class! Thanks!

@notyourdadscpa 7 месяцев назад

I'll definitely add that to my list! And technically yes property received can be taxed as income. And hobby income is also taxable, and deductions with hobbies are more limited, so it's usually more advantageous to treat yourself as a business.

@MsBeautylive 5 месяцев назад

How does a preparador do your taxes without a 1099??? Do you just take everything else and they know how to do it ??

@notyourdadscpa 4 месяца назад

Yes you just have to rely on their bookkeeping records

@laronfrazier2637 4 месяца назад

But does this to apply if you got a cashapp 1099k in 2022 but didn’t in 2023. Should I file that or was that rule not implemented yet.

@sandys2672 6 месяцев назад

If selling on ebay is this considered self employment?

@notyourdadscpa 6 месяцев назад

Typically yes

@wayneguy6043 6 месяцев назад

So if eBay sent me a 2023 1009 for $3,500 I don’t have to bring it to my tax preparer ?

@notyourdadscpa 6 месяцев назад

The activity is still reportable on your tax return, and the 1099 should still ideally be included for reference.

@carlbailey-xo5sd 4 месяца назад

? What do you do when a company give you a 1099 and the amount is far exceeding What they pay you.

@notyourdadscpa 4 месяца назад

You don't want to report less than what the 1099 shows, so show what they have but then deduct the difference to whatever the sales should actually be. That's the work around that satisfies the IRS computers and doesn't tax you more than you should be.

@chk6111 4 месяца назад

I received a 1099K from Ebay for $2,400 from reselling items I purchased, at a loss. I entered this as "Non-Taxable" income via H&R block software prompt yet it shows up on my 1040 as taxable income on 1040 line 8 "Other Income from Schedule 1, line 10" This adds to my AGI and may affect my ability to obtain health insurance via the ACA (my part time job doesn't offer insurance). Do I have to do Schedule C to completely cancel this amount out? Is it absolutely necessary to report this 1099K if the IRS has turfed the threshold out until 2024? Thanks.

@aaronbelpedi1669 3 месяца назад

Thanks thought I was getting scammed, oh wait

@Merrrmaaaid 6 месяцев назад

I closed my account before I could get a 1099 how do I know my amount ? I can’t get a hold of no one now that I don’t have a account

@notyourdadscpa 6 месяцев назад

I think your best bet is to reference the sales reports available on your platform.

@ssjordan34 6 месяцев назад

So how do you report without a 1099 on a platform like Turbo Tax?

@notyourdadscpa 6 месяцев назад

You'll just need to report a summary of your total income and expenses for the year. If you don't have those records you may have to piece them together using the platform sales reports and your banking history for the expenses.

@VENOM-_-15 7 месяцев назад

How can I call you for a quick consultation or advice on taxes for my reselling business Mark?

@notyourdadscpa 7 месяцев назад

My consultation schedule closes down during tax season but I otherwise do them all throughout the year, and you're always free to email me!

@VENOM-_-15 4 месяца назад

@@notyourdadscpahow do I set up a consultation with you once April passes?

@seanlin97 7 месяцев назад

How about if it your own home goods like used house hold goods. Do you still have to report it?

@tamarasparks8065 7 месяцев назад

Yes. It's just like yard sale income is supposed to be reported. The difference is these online platforms have a record of your sales.

@seanlin97 7 месяцев назад

@@tamarasparks8065Everything I resell is at a loss so it doesn’t make sense why I should have to pay more. If I was a business, and if I sell something at a loss I wouldn’t have to pay taxes on it so why should I have to now? Just trying to figure it out maybe there’s a loophole somewhere

@notyourdadscpa 7 месяцев назад

Right, so technically it doesn't need to be reported and is not taxable. The problem is the IRS doesn't know you're selling at a loss because they don't have record of the cost of your items. So then if they don't see the 1099 amount on your tax return it creates an issue. They are aware of this and have published an article on how to deal with this on your tax return. It's a little bit goofy but the workaround does exist.

@eltiburon5240 6 месяцев назад

Can we get a video on said workaround?

@Cat-2622 4 месяца назад

Hello how much can you make on Mercari this Year I still don’t understand is it $600 or $5000? I am confused And if you get 1099-K even if you make more than $600 do you still have to file it.

@terrancecooley3165 7 месяцев назад

You're under the radar if you stay under that $20,000 threshold most companies like lyft and uber don't report your income to the IRS unless you made over the threshold....

@ItsDan123 7 месяцев назад

Those companies I’d have expected to issue 1099necs which has had a $600 threshold for a long long time

@terrancecooley3165 7 месяцев назад

@@ItsDan123 I ain't worried about the 1099 NEC I am talking about the 1099k forms. I try to remain under the radar as much as possible....

@joshs5418 7 месяцев назад

@@terrancecooley3165 but your SSN is tied to these online accounts and there’s a paper trail of money hitting your bank account from eBay etc

@nineagon3111 6 месяцев назад

I keep seeing this over and over again to "make sure you report this income even if you didn't get a 1099-k". Where do I report this? What form? I'm on freetaxusa. It seems like a 1040. But I have no clue. Everyone seems to tell you to report it. But no one can tell you where to report it. I didn't reach the threshold to receive a 1099-k from ebay. But there seems to be no resources on where to report the income. Are ebay sales "personal transactions", or Buisness (gig included)?

@notyourdadscpa 6 месяцев назад

It's reported on the schedule C of the individual income tax return. Not all free tax software includes the schedule.