Tax Reporting Sanity Restored! - eBay, PayPal, GB, etc...

[s&wchad]

This is the email from eBay.
The reporting threshold had been changed to $600 three years ago (that included shipping charges).

The IRS wasn't ready to deal with all the paperwork, so they have been arbitrarily phasing in the change. For the last two years, the threshold was set at $5K (at the end of the year). They announced earlier that it's $2500 this year; $600 next year.

You're obviously still required to report any capital gains and pay tax, but this eliminates filing headaches on petty amounts.

 

[greenwellg]

I always tipped in cash and told the server to please not report it since it was my gift in appreciation of service above and beyond any reasonable expectations. A friend of moms who lived near Cleveland had a family farm that the owners became millionaires due to the govt subsidy of some farming (don't plant on this portion of your land and we will pay you) operations. We visited them once and they were driving around in an ancient Buick that you could watch the road passing underneath through the rust holes in the floors.
He (Mom's pen pal) loved to take his sons and travel down to Florida. When they stopped to eat and were treated like "royalty" by a cute waitress he would leave them a tip of over a hundred dollars.
It's nice to know that govt has basically decided to stop penalizing the practice that leaves them out of that ability to generously reward someone you may never see again. I understand the meaning of this and appreciate the decision. Kind of makes me reconsider my general dislike of omnipotent bureaucrats.

 

[YeshuaIsa53]

They miss out on employer matching SS, and most likely might wish they had done otherwise when they turn 65.

 

[s&wchad]

They miss out on employer matching SS, and most likely might wish they had done otherwise when they turn 65.

I don't believe that's the case. As I read it, employee/employer SS contributions shouldn't change.

No tax on tips and overtime: What employers should know

RSM explains how the Big Beautiful Bill eliminates or limits tax on tips and overtime, and how it affects employers. Learn more.

rsmus.com

 

[DWalt]

I did not know that. I have not been selling much on eBay recently because of the low reporting trigger limit, great news.

 

[s&wchad]

I did not know that. I have not been selling much on eBay recently because of the low reporting trigger limit, great news.

Same here. It wasn't worth the hassle...

 

[Bald1]

So if you sell personal items on eBay you have to report it as income? For example old motorcycle parts or gun grips etc ?

 

[s&wchad]

So if you sell personal items on eBay you have to report it as income? For example old motorcycle parts or gun grips etc ?

Kinda, but not exactly...
If you realize a profit on sales anywhere, you're required to declare them on your taxes as capital gains. Short term (1 year or less) and long term rates are different. All collectables are taxed at the short term rate.

 

[fordson]

Thanks for the update. Hadn't read or heard of this sensible change to the tax laws. Sanity prevailed …….

Update: Change was effected as a result of TBBB…….

One Big Beautiful Bill Act changes 1099 thresholds — Avalara

The One Big Beautiful Bill Act of 2025 changes reporting thresholds for Form 1099-K, Form 1099-MISC, and Form 1099-NEC.

www.avalara.com

 

[Bald1]

So if you sell personal items on eBay you have to report it as income? For example old motorcycle parts or gun grips etc

Kinda, but not exactly...
If you realize a profit on sales anywhere, you're required to declare them on your taxes as capital gains. Short term (1 year or less) and long term rates are different. All collectables are taxed at the short term rate.

ok that makes sense now. It's only on the profit.

 

[rustythread]

All collectables are taxed at the short term rate.

Can you give us a reference to the regs/statute on that?
Thanks

 

[LVSteve]

This works for me. I had been putting off clearing out some of my weirder milsurps that I had acquired over the years due to the threshold. Mind you, I doubt I have receipts for everything as some purchases were made F2F before we had the FFL transfer requirement and Backpage was still a thing.

 

[DWalt]

Can you give us a reference to the regs/statute on that?
Thanks

Look through this. But if there are no formal records of a private treaty sale between individuals, who's to know that anything happened? https://www.thetaxadviser.com/issues/2019/nov/taxation-collectibles/

 

[MelvinWalker]

This may be the best thing I have heard all day long...Now my CPA won't be pulling his hair out because I sold a bicycle Klaxon horn and a Starsky and Hutch lunchbox on Ebay that I owned since I was five years old.

 

[rustythread]

Look through this. But if there are no formal records of a private treaty sale between individuals, who's to know that anything happened? https://www.thetaxadviser.com/issues/2019/nov/taxation-collectibles/

Dang! My eyeballs are sore from reading that. Thanks for the info.

 

[thadheth]

Interesting that local auction houses are not required to issue a 1099K for estate sales that could be well into the 10's of thousands. However, eBay and the others were going to be required to do so for $600 in total "sales" which laughingly includes taxes and postage. Nice to see sanity prevail.

 

[s&wchad]

Interesting that local auction houses are not required to issue a 1099K for estate sales that could be well into the 10's of thousands. However, eBay and the others were going to be required to do so for $600 in total "sales" which laughingly includes taxes and postage. Nice to see sanity prevail.

The reporting was for online money transfers.