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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.
You don't sell things on Craigslist; you simply find buyers, meet, and sell it on your front porch (or somewhere in public).
it means that they will have to collect your Taxpayer ID number and then validate it.
so no illegal alliens can use E-bay.
Perhaps you weren't aware that illegal aliens can get a ITIN (Individual Taxpayer Identification Number) from the IRS, and can actually report and file 1040s every year with that same TIN. Even when here illegally (thus making their entire income illegal).
The IRS doesn't care as long as you pay taxes, unless they feel you didn't pay enough, then it's up to you to prove you paid enough not up to the IRS to prove you didn't.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
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.
And if you actually read the details, you have to sell over $20,000 and have 200 transactions in order for it to be reported. This is not for people who sell their cell phone every 3 months.
$20K is nothing; I can sell my classic car in my garage and exceed that amount. And since the regulations are not yet written (1099K is still in draft), the "and 200 transactions" is still up in the air. Knowing the desire for tax revenues, my opinion is that it'll end up being $20,000 OR 200 transactions.
Additionally, if I sold my classic car for $25,000 (about what it's worth, and about about what I've put into it over the years), and had two garage sales where I sold a lot of my old clothes, computer parts, records, and trinkets (easily beyond 200 items), I could end up having to report. Having 50 transactions at a single garage sale is not that uncommon; having 4 garage sales a year (especially if someone is out of work and looking to raise money by selling assets) puts you into this new "you're a business even though you aren't" category.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
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.
IRS can't share the information with other agencies on its own, but other agencies can request the said information. You know, the FBI can subpena your tax return and IRS will have to give it to them. What IRS can't do, is take your tax return and share it with other agencies without such a subpena.
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.
With the IRS, you are guilty until proven innocent. The burden of proof is on you to show the IRS is in error, not the other way around.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
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.
And I suppose you don't care that the Fair Tax is a ridiculously regressive tax? Because it taxes buying power, it disproportionately effects those who do not save or invest but, instead, live paycheck to paycheck. So, if you're poor and you have to spend all your income on rent and food, the fair tax hits you hardest. If you're rich, and you are able to invest half your income, and you spend the rest, you're only taxed on half your income. Thus, the rich pay a lower real tax rate than the poor. (Add to this the fact that the marginal value of $1 is far less to a rich person than to a poor person to begin with and the system starts to look downright dystopian.)
The obvious way to fix this that I've heard some propose, is to allow exemptions for the poor, etc. But now you're getting back where we are now, where individuals have to keep track of their finances and report to uncle sam for their rebates. Except now individuals have to keep track of every single purchase, rather than just their annual income from their employer.
And this gets at the broader point: taxation is a powerful and legitimate tool for achieving public policy goals. But if you use a national sales tax, you either are robbed of those tools for the sake of keeping taxation simple, or you and up with the worst of both worlds: a highly regressive taxation system that is still a nightmare to administer.
caritj.org
And this tax is tracked how online? On ebay, for example, is ebay required to collect this tax? or the seller? or does the buyer just record all their purchases and pay up at the end of the year? I'm all for a national sales tax, but it still requires tracking of individuals.
No, it requires tracking of businesses and merchants. Ever buy groceries at (say) a Wal-Mart and then have to file a form with the state for the salex taxes you paid? No? Do you know why? Because that is a matter between Wal-Mart and the state in which that particular store is located. Wal-Mart has to pay sales taxes on its sales volume whether or not they pass them on to you. To keep things simple they pass them onto you on a per-transaction basis. That's why your receipt has line-items detailing your subtotal, the sales tax, and your final total which is the sum of both.
The Fair Tax is designed to be revenue-neutral. That is, the federal government would collect the same amount of taxes under the national sales tax as it does now under the income tax. That means that unlike most state sales taxes, services are taxable because companies that sell no goods but make money from providing services currently pay income taxes. Thus, eBay would pay its own sales tax because providing the storefront and maintaining the Web site is a service and the merchants are its customers.
As a business or a merchant, it would cost less to comply with this simplified tax code than it does to comply with the enormousely complex income tax system we have today. That's partly because it only applies at the retail level; factories and wholesalers and such would not be paying it. Most importantly, it would represent the single largest transfer of power away from politicians and to the people that has ever occurred during my lifetime.
No offense is intended, but to be completely honest with you, your question is uninformed and trivially answered with a Google search. The Fair Tax bill is the most thoroughly researched piece of legislation in the history of the USA and such questions have been exhaustively answered. Really the only reason it has not already become law is not because there are credible objections to it, not because it would do harm, but because politicians do not wish to give up the tremendous and subtle power that the income tax code represents.
It is a miracle that curiosity survives formal education. - Einstein
The Fair Tax bill is the most thoroughly researched piece of legislation in the history of the USA and such questions have been exhaustively answered.
I'm glad I put the milk down, or it would be going through my nose right now. What's the economic impact of setting the pay-back line at poverty (as done now) vs twice poverty (and, of course, having a higher tax level to compensate)? It's never been researched at all. Back when no one heard of Fair Tax, I thought it great, and I asked the question, "why exactly poverty level?" and the answer back was something to the effect of "Because that's the lowest we can get it and the point is to sneak in something as regressive as possible while claiming it to be progressive." It is an arbitrary line drawn in the sand without *any* research at all.
If you disagree, please point me to some research done about how it would affect the US economy if that level was set at half-poverty, poverty, and twice-poverty. Go ahead, I'll wait.
And you are more civil than most with your "It's perfect, don't question The Fair Tax" stance. But usually, when I ask questions, they are even more self-righteous than that.
But mention that spending is more volatile than, say, income for boom bust periods and asking about what will be done to improve the stability of income, and they'll look at you like they never took econ 101. And these are the people claiming "the most thoroughly researched piece of legislation in the history of the USA" and miss simple things like spending being more variable than income. Really? Or correct me, where's the actual study on the effect of spending levels in varying economic times. After all, this completely unresearched piece of crap was so researched, you'd be able to prove me wrong easily. Instead, it's a good idea that was perverted early on by conservative people with the specific goal of getting the top income level as small as possible and convincing everyone else it was "fair."
When they have to name something with adjectives, you are safe in assuming the opposite, until they prove otherwise, and they haven't.
If you don't believe me, look at the utter shit being presented about it. http://en.wikipedia.org/wiki/File:FairTax_married.png Apparently, this "revenue neutral" legislation will reduce the taxes on everyone. Either someone's taxes have to go up, or it can't be revenue neutral. So the graph, done by "a Boston University study" (really some guy's thesis, and I've done one of those, I know what crap they can be) is presented like fact, and is demonstrably flawed. That's the level of research this gets. "It'll lower taxes for everyone, and is revenue general too" and no one notices those are contradictions... With research like that, who needs facts?
Learn to love Alaska
Why, by running high inflation and heavy regulation & taxing of businesses.
High inflation ensures that this big miserly border-line treacherous criminal will lose any money he saves in banking account, etc, forcing him to invest that money into businesses, if he wants to maintain the value of his money.
Once you've forced him to put the money into businesses, then you take the money from the businesses with various fees and what-not. (Some tweaking and fixes will be necessary, such as banning of owning gold and silver by members of public, as well as a ceiling on interest rates banks can pay on savings, but the general idea remains the same.)
There are many, many ways to "spread the wealth around" even without a progressive income tax. Progressive income tax just makes it easier.