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For those of us who like to sell off the lovelies we don’t wear anymore..

nala

nala

Ideal_Rock
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Joined
Oct 23, 2011
Messages
7,449
I just saw this. Do any of you know more about it? Will we hobbyists find ourselves paying taxes even if we are selling our preloved jewelry at a loss???

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I had an email from eBay requesting my full social security number. I sold something this year way over $600 on eBay but your article states items sold after 12/31/21. Hopefully my item will not be included in a 1099 this year!
 
Yikes! I feel like if it was your personal property you sold at a loss, hopefully they do the calculation to determine what you actually paid versus the sale price, to determine the correct basis for the tax they seek to impose on the sale. It feels like if it was sold at a loss, then it really shouldn't be taxable, but I'm clearly not the IRS or Congress!
 
I’m not surprised, they get you most of the time when buying used items too these days. Personally, I think it there should be incentives to encourage people to buy/sell used but that’s not what keeps the economy growing I guess. :/
 
They will issue a 1099-k but if you sell at a loss, you just need to account for it on your taxes. Some states already have a $600 threshold.
 
So if I read that correctly, it incentivizes us further to use Friends & Family for payments when selling via LT, but no real way around it if you're selling with eBay, TRR, Poshmark, etc?
 
ForteKitty said:
They will issue a 1099-k but if you sell at a loss, you just need to account for it on your taxes. Some states already have a $600 threshold.
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That's my understanding.

There is a risk they could disallow the deduction if you are audited and don't have a receipt. But I think if your assumed cost is reasonable the risk is low.
 
MissGotRocks said:
I had an email from eBay requesting my full social security number. I sold something this year way over $600 on eBay but your article states items sold after 12/31/21. Hopefully my item will not be included in a 1099 this year!
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Don't give your full social security number to anyone @MissGotRocks.
 
@MissGotRocks, EBay stopped doing business with PayPal and started using a different payment processor. They required us to give bank account information if we wanted to keep selling but we didn’t feel comfortable with that, so we no longer sell on EBay.

At the same time they asked for a social security number to comply with federal laws against money laundering. So, it is legit but it’s very uncomfortable to have to supply this type of information. In the event of a hack that is a huge headache to deal with!
 
YadaYadaYada said:
@MissGotRocks, EBay stopped doing business with PayPal and started using a different payment processor. They required us to give bank account information if we wanted to keep selling but we didn’t feel comfortable with that, so we no longer sell on EBay.

At the same time they asked for a social security number to comply with federal laws against money laundering. So, it is legit but it’s very uncomfortable to have to supply this type of information. In the event of a hack that is a huge headache to deal with!
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@YadaYadaYada, yes, I found that out when the item sold. I know that their request is legit and I am sure there is some penalty to be had if you don't furnish it. However, between their fees for selling jewelry and now this tax, I doubt I will ever use them again either. Ebay does provide you with a large audience for selling but it just isn't worth it anymore. Thanks for chiming in - looks like you have come to the same conclusion.
 
If you’re a U.S. citizen and you have a SSN, you can get your EIN for free on IRS’s website here.
An employee tax ID number should be sufficient.
And if it's not I wouldn't feel comfortable selling on ebay anymore.
Last 4 SS digits are OK.
Full SS #. Nope. I wouldn't trust ebay. Too many risks. IMO.
 
missy said:
If you’re a U.S. citizen and you have a SSN, you can get your EIN for free on IRS’s website here.
An employee tax ID number should be sufficient.
And if it's not I wouldn't feel comfortable selling on ebay anymore.
Last 4 SS digits are OK.
Full SS #. Nope. I wouldn't trust ebay. Too many risks. IMO.
Click to expand...

Just know that you have to file taxes on the EIN if you get one.
 
caolsen said:
Just know that you have to file taxes on the EIN if you get one.
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Yes, I was taught years ago we should never give out our full SS #. Too risky. Of course we all do what feels comfortable for the individual and there is no one size fits all. But I did want to share my thoughts about SS#s. Once it is breached you cannot go back.
 
missy said:
Yes, I was taught years ago we should never give out our full SS #. Too risky. Of course we all do what feels comfortable for the individual and there is no one size fits all. But I did want to share my thoughts about SS#s. Once it is breached you cannot go back.
Click to expand...

I agree with you. But years as a banker I’ve seen too many folks who get an EIN thinking it’s just a mask for their personal SSN. They do small dollar selling and buying personal online stuff with it. They DO NOT file taxes for the EIN and end up with an IRS tax avoidance issue.
 
caolsen said:
I agree with you. But years as a banker I’ve seen too many folks who get an EIN thinking it’s just a mask for their personal SSN. They do small dollar selling and buying personal online stuff with it. They DO NOT file taxes for the EIN and end up with an IRS tax avoidance issue.
Click to expand...

Wow I don’t understand some people. Peace of mind is everything to me.
 
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I didn't realize you were so taxed in the states
 
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I got an email about this, and etsy will comply with the law, of course. At this point, I'm considering going back to accepting personal checks for bling I release back into the wild.

Having said that, it does have a bit of a chilling effect on my purchases now, because where once I used to feel confident I could recoup most of the cost and not lose too much, now I feel it's always going to be a big loss.... and I tread more carefully. It does rather take the the bloom off the rose, as it were.
 
I received an email from PayPal asking for my full SSN due to this. I think I will go the EIN route. What happens if PayPal is hacked or subject to ransomware?
 
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