Slashdot Mirror
IRS Wants a Cut of Sales On eBay and Craigslist
Ponca City, We love you writes "In 2009, $60 billion worth of items were sold on eBay, meaning 'extra' money for many sellers, whose activities may provide them with taxable income. Now the Washington Post reports that beginning next year, a new law will require 'the gross amount of payment card and third-party network transactions to be reported annually to participating merchants and the IRS.' Also, for 2011 tax returns, 'taxpayers who annually sell more than $20,000 worth of goods and have more than 200 electronic transactions' will receive a new IRS form, known as 1099-K, for reporting the proceeds. The new tax issues shouldn't be a concern for people who sell just a few small items online for less than they paid for them, because as the IRS points out, income from auctions that resemble a garage or yard sale 'generally' isn't required to be reported. But if an online garage sale turns into a business with recurring sales and purchases of items for resale, it may be considered an online auction business. 'Generally, transactions resulting in a gain are reportable, regardless of whether the taxpayer is conducting a business,' says Gil Charney, principal tax researcher at The Tax Institute at H&R Block. The real reason behind the law is simple: Research shows taxpayers do a much better job of reporting taxable income when they know the IRS is receiving information about their transactions."
How exactly is this news? Governments have wanted to tax everything since well since they were established it's what they do.
starting in 2012, businesses (that includes me and many other people who do work on the side) need to file a 1099 if you pay more than $600 in goods or services from someone.
Do you even lift?
These aren't the 'roids you're looking for.
The Works of Benjamin Franklin, 1817:
"'In this world nothing can be said to be certain, except death and taxes."
I see how this could be tracked on EBay - especially "Power Sellers" with 1000's of transactions.
But on CL? that's going to be interesting to see happen.
www.effectiveelectrons.com "chips that work" Analog, RF, Mixed Signal
Sorry, I do need to add that it's not like double taxation isn't done. In Ontario, every sale of a car is taxed. The government can make a lot of money on a car that is frequently sold. Motorcycles hang around so long, and people upgrade so frequently that I would bet the sales tax eventually collected exceeds the original price of the bike.
You don't sell things on Craigslist; you simply find buyers, meet, and sell it on your front porch (or somewhere in public).
The income was already taxable, this will just help them find people trying to cheat the system. This is really no different than your bank reporting your interest paid on the 1099-int or one of the many other 1099 forms that are required to be filed by various entities.
it means that they will have to collect your Taxpayer ID number and then validate it.
so no illegal alliens can use E-bay.
Since they will be reporting SSNs to the IRS it will also be interesting if the law enforcement agencies sniff this for fugitives. Supposedly SSNs are not supposed to get used for law enforcement but they are.
I wonder how they will deal with people who claim not to be US citizens.
Some drink at the fountain of knowledge. Others just gargle.
In Norway, the tax department actually have people employed to surf the popular sites like Finn and QXL (auction/trading sites), and even blogs, to try to uncover tax evasion. One of the most popular bloggers in our country, which is a 14 year old girl nicknamed Voe, probably has to pay taxes because she recieves so many free products from vendors (who hope to get get free advertising).
Dvorak on Doomtech
You can (and should) deduct your IRS allowed capital purchases from your INCOME, not your income tax (deductions from your income tax are known as credits). If your purchases fall under the definitions of a deductible expense, than yes - you can deduct it from your taxable income (typically Schedule C, Section 179 and others). Depending on the expense, you will either take the entire amount for the year, or you will depreciate it over a period of time. When you go to sell it, if you make more money on it than you paid for it, than it's a gain - also reported on your Schedule C. If you lose money on it, the gain will generally be offset by the larger original investment. You are taxed on the NET gain. What you've described as double taxing is only happens if you don't declare the original expense. There's a lot more to it, so make sure to consult an accountant or tax attorney for your specific situation.
Parmasean Cheese. It's what's for dinner.
All businesses no matter how large or how small or informal will have to file a 1099 for every entity to which they pay more than $600 in payments for goods and/or services in a year. This includes everything: the part-time plumber, your landlord, the power company, Office Max, WalMart, etc. You are going to have to get Best Buy's TIN if you purchase a server from them. The average USA small business will need to file about 600 every year.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
Fuck the IRS.
"The average reporter we talk to is 27 years old......They literally know nothing." - Ben Rhodes
So, what you're saying is that you've been avoiding/evading paying taxes in the past? The requirement for 1099s for $600 or more has been around for a long time.
If you actually KNEW the law you would know that you only had to report for individuals who you paid more than $600 in a year. Not for companies (sole props, LLCs, or corporations).
This new regulation means that if you buy a $600 color laser printer from Office Depot you need to issue Office Depot a 1099 tracking that purchase. And if you buy gas at Costco for your travel to your clients you probably have to issue Costco a 1099 as well. McDonald's for the food you buy. United Airlines for the air tickets. NewEgg for the computer equipment. Apple for the two development iPads. And on and on...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Preventing me from cheating on my taxes is working against me?
I guess all laws that inhibit me from doing what I want are working against me.
Taxes pay for my lifestyle?! I am paying for my lifestyle, with all the work and all the bills.
Bankers, those get paid for their lifestyle from the Fed but not from taxes, purely from a money printing press.
You can't handle the truth.
How about having to give your taxpayer ID number (SSN for most of you... yes, that same SSN they promised not to use for anything but your retirement accounts, you stupid suckers) to Ebay for starters. Then, when you try to open account #2, they say, oh, wait, we already have an account for that TIN, sorry, no more accounts for you.
Fake TIN/SSN? Jail.
Don't worry; while the government isn't bright enough to keep from screwing the citizens, it is bright enough to keep the majority of citizens from screwing it.
It's just going to keep getting more and more like this. They conned the public, and the supreme court, into giving up 4th amendment guarantees on privacy a long time ago -- no legal recourse remains.
I've fallen off your lawn, and I can't get up.
I work with some of those tea baggers. Sometimes I can't believe the stupid shit they say & think
Never mind:
* The record national debt run up by Smirky & Snarly
* The national/global economic crash caused by 8 years of complete republican control
* 2 Unwinable wars in muslim nations for the benefit of the American multinational energy and military industrial complex corporations
disclaimer for the trolls: I hate all politicians and believe they all need to be dragged into the street and shot as traitors
"Suppose you were an idiot...and suppose you were a member of Congress...but I repeat myself." Mark Twain
Flat taxes are disproportionately hard on low-income earners, while they give the wealthy a huge break. They're not fair, stop pushing them.
For every problem, there is at least one solution that is simple, neat, and wrong.
* The record national debt run up by Smirky & Snarly
Which clearly is resolved by increasing the deficit by an order of magnitude...
The national/global economic crash caused by 8 years of complete republican control
I think Senator Tom Daschle (D - SD), Senate majority leader from June 2001 through January 2004 would disagree. As would Speaker of the House Nancy Pelosi (D - CA, speaker of the house from Jan 2007 to the present) and Senate Majority Leader Harry Reid (D - NV, from Jan 2007 to present). In fact, it seems that of those "8 years of complete republican control" about half of them saw divided Government.
2 Unwinable wars in muslim nations for the benefit of the American multinational energy and military industrial complex corporations
Which, apparently, the current Administration has decided to ignore and escalate, simultaneously.
We now return you to your partisan rant...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
Umm. I wouldn't be opposed to them taxing the _profits_, not gross sales. Particularly if they let me deduct the losses when I sell something for less than I paid for it a month ago.
That would be what they will be doing. The point is that if you have $20,000 gross revenue then you have to tell them so they can calculate your taxable profits and tax you on them. Or possibly find out that you had no taxable profits. Like if you bought a car for $100,000 and sell it a year later for $60,000, you then have to report your sales, but you are not going to be taxed on anything.
Most of the tea party people I know hate Bush only slightly less than Obama...
Having said that, the 2009 and 2010 deficits are almost 3 trillion dollars. The biggest deficit 2000-2008 was about $480 billion. So, while I believe that $480 billion dollar deficits are bad, $1.5 trillion is 3 times worse, and 2011 isn't going to be much better. The record debt under Bush looks very conservative compared to the actual 2009 and projected 2010-2012 budgets, and as usual the deficits are likely to be larger than the projections...
I hate all politicians and believe they all need to be dragged into the street and shot as traitors
That would be too good for them. I think stripping them of their power and assets and forcing them to get real jobs would probably be a fate worse than death for most of them.
I still cannot find the droids I am looking for...
They also do harmful things, and they acquire funding for that through taxes as well. This is one (of many) reasons that government powers and government funding should be severely limited. The main reason we have an out of control government is because they control their own funds, and now also their powers (the constitution no longer governs them.) Not only do they tell you how much you have to pay them, and how often, and why, and for what, and what words like "income" and "profit" mean, they can print money (via the banking scam), incur unlimited debt (stroke of a pen, no approval required), and spend it all any way they want -- and all without you getting a word in edgewise.
Legally speaking, you can't do squat about it. In the case of the US, that's the hallmark of a government that is not in the least responsible to the people who originally put it in place. That connection has been well and truly severed.
I've fallen off your lawn, and I can't get up.
I'll use 20% as an example. You can substitute any number.
If your earnings are low enough that with 100% of your income you are *just* paying the rent and food and utilities, and then they apply 20% taxes, you're screwed.
If your earnings are high enough that you can pay all those things and you have 20% left, and then they apply a 20% tax, you're simply ok.
If your earnings are high enough that you can pay everything, go to Maui and Europe, and drive (and insure) a Lamborghini and have 80% left over, and they apply an 20% tax, you're not only ok, you're golden, as they say.
That - in short - demonstrates how "20%" means something different specifically depending upon your earnings.
Fair: Tax purchases, not income; don't tax necessities (generously figured as X dollars of food per person, X kilowatts per person, X gallons of water per person, X number of square feet per person, etc.) Every person gets X in certificates good for those tax debts, rather than the usual money. Like food stamps; but water stamps, real estate tax stamps, etc. These act like money, but only in the domain they are meant for - when submitted back to the IRS by the appropriate vendors. Tax every other purchase. At the other end, absolutely separate government spending from government income collection and distribution; and disallow operating at a deficit, period.
I've fallen off your lawn, and I can't get up.
Keynesian economics argues that private sector decisions sometimes lead to inefficient macroeconomic outcomes and therefore, advocates active policy responses by the public sector, including monetary policy actions by the central bank and fiscal policy actions by the government to stabilize output over the business cycle.
http://en.wikipedia.org/wiki/Keynesian_economics
The Keynesian experiment was back in the 1950s and 1960s, when the American middle class was the envy of the world. Countries like Canada, Germany, and France have Keynesian economies and strong government regulation, and are doing much better than the United States in terms of quality of life, external debt, and life expectancy.
In short, they are like parents who send their kids to college, but stop sending them money if they find out it's all going towards coke and hookers.
Here in the states, we've discovered the raging brothel, and continue to hand money over to corporations that do nothing economically useful with the money. The problem is not investment and full employment as a goal of government policy, but the corruption and colossal failures of American governments since 1980.
Somebody could have a big income, but spend like a person with an avereage income. How will you disproportionally punish him for doing well?
No?
Commerce clause? Ex post facto laws? Most of the bill of rights thrown out the window? Unjust wars? Insane debt levels? Financial system based entirely on an illusion? Judges asserting section five powers that there are no mention of in article three? Intellectual property laws that do more to deter innovation than to encourage it? Educational system that result in large percentages of the population indulging in rampant superstition, and largely unable to read, write or think at a level I'd accept for secretarial work, never mind the tiny (and largely wrong) collection of "facts" they bring with them? Have you noticed that almost our entire manufacturing base is no longer present and accounted for? I could go on - for pages - but it's pretty depressing.
Wait -- I should have asked -- do you live in the USA? Because that's the government I was speaking of. If you live somewhere else, you might, I suppose, have a government that's just fine. I doubt it somehow, but I accept the idea in principle. The US government, however, is an utter clusterfuck. You'd have to be the most servile kind of blinders-wearing sycophant to think otherwise.
I've fallen off your lawn, and I can't get up.
20% flat tax with a one-time $50,000 exemption for every tax payer in a household (but you don't get a refund if you owe negative tax). How does that screw low-income earners?
God invented whiskey so the Irish would not rule the world.
http://en.wikipedia.org/wiki/File:US_incarceration_timeline-clean.svg
it's a big business, and also helps the ongoing transition to a police state.
McDonald's for the food you buy.
If you are spending $600/year on McDonald's food, you have worse problems than mailing out a few extra 1099s.
> How does that screw low-income earners?
It doesn't, of course. It screws someone much more powerful: the enormous bureaucracy and industry that has grown up around the present insanely complex and capricious system. Even more important, it takes away the power of politicians to reward interest groups and punish scapegoats with special deductions, exemptions, and punitive taxes. It also makes it impossible to conceal tax increases.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
Bullshit. You pay taxes to pay for highways, schools, cops, fire departments, and lots of other stuff that benefit YOU, and the more you have the more it benefits you. Like one guy's sig says, "I like paying taxes, with them I pay for civilization.
An attitude like yours smacks of sociopathy.
Free Martian Whores!
You do realize that the top 10% of people spend proportionately less than the rest of the population. Instead they invest much larger percentages of their money (especially compared to the bottom 25%, which have 0.1% of their income from investments).
Given this reality, it's easy to see how poor people spend the vast majority of their money on consumption, while the rich spend far less. If the tax is based on consumption then it's inevitbale that it will be disproportionate.
I KUT J00 M4NG!!!
Who says we have an out-of-control governmnent?
It's always perilous to put words in dead peoples' mouths, but IMHO it would be quite a stretch to think that the authors of the Constitution wouldn't consider today's Federal government to be "out of control." You're right in saying that the founders were hardly paragons of justice themselves, but they did have some very definite ideas regarding the proper limits of central power, and we've strayed a long way from the path they had in mind. Fyngerz's original reply only hints at some of those departures.
Why would we care what the founders thought about governmental theory?
Um, because those thoughts, as encoded in the Constitution, are supposed to be the foundation for our laws?
The "intent" of the eBays and Craigslists of the world is supposedly to let people sell things they don't want around (more or less). If I buy something with my income, and pay sales taxes on it, then sell it later on then so be it. If I'm lucky enough to make a little money on the arrangement (like if it turns out to be collectible), that's splendid. But it's not a business. Taxes due at each step of a transaction are a VAT, and we don't do that here.
If I'm buying goods wholesale or as an investment and I'm trying to sell them at a profit as my means of earning a living, though - well, that's taxable in this country and that's just all there is to it.
I run a services business (as an S Corp), and I could probably pay a little less tax if I weaseled appropriately and just buried all my income as "expenses". I don't. The business pays what are real, legitimate expenses (I don't buy an iPod for my kid and call it "computing equipment" or any of that kind of shady stuff). I keep my business and personal money separate and I pay myself and my employees a salary. I could probably make a few more bucks being really aggressive about things, but I know I'm doing the Right Thing and I'm not in line for an eventual trip to Federal Pound Me In The Ass Prison.
In other words, if you're trying to live free of the IRS by doing a cash business on eBay, screw you. Pay up.
-- Josh Turiel
"2. Do not eat iPod Shuffle."
I suppose it doesn't. However, that is not the nature of any flat tax proposal I've ever heard. For example, according to FairTax.org for 2009 they propose that a single adult with no children receive an exemption of $10830 (and double that for a couple). With children you get more, but a couple with 7 children would receive only $47840 rather than the $100k you suggest.
Furthermore, the fair tax people say the rate would be 23%. However they're not using this rate the same way sales taxes currently apply. The rate means that 23% of the total cost of the item would be tax. Lets give an example of how this is different. If you buy a tube of toothpaste for a dollar, if any state had their sales tax rate at 23% you'd pay $1.23 for the toothpaste. However the way the fairtax.org people define the rate 23% of the final price goes to tax. This means that you would have to pay $1.30, 23% of which is $0.30 (leaving $1 for the merchant).
In other words, the rate is actually 30% the way everyone in the country currently understands consumption taxes to be applied. And it is far from certain that even 30% would be sufficient, they're making very rosy assumptions to make their plan appear as feasible as possible.
Now maybe you have some other flat tax scheme involved, but I'm skeptical that 2/3rds of the fairtax proposal with a much larger exemption could be revenue neutral, especially when the fairtax proposal itself probably isn't setting the rate high enough.