JUST a little heads up kids

eSGEe

eSGEe

Ferengi Ambassador of Trade
Country flag
For any reverb sellers-----
As of January 1, 2022, marketplaces like Reverb are required to collect tax identification information from US sellers who sell $600 or more in a calendar year. This information will help us issue you the necessary tax documents and ensure that your payouts are not impacted.

Once you've provided your tax information, you won't need to take additional action until later this year—we'll reach out with any next steps. Note that reporting your sales doesn't necessarily mean you'll need to pay income tax on your sales. You can learn more in our Help Center.

They all ready started collecting sales tax back in (2020??) now..... they want your SOCIAL to sell your used crap online........ yeah, count me out ....
 
eSGEe said:
For any reverb sellers-----
As of January 1, 2022, marketplaces like Reverb are required to collect tax identification information from US sellers who sell $600 or more in a calendar year. This information will help us issue you the necessary tax documents and ensure that your payouts are not impacted.

Once you've provided your tax information, you won't need to take additional action until later this year—we'll reach out with any next steps. Note that reporting your sales doesn't necessarily mean you'll need to pay income tax on your sales. You can learn more in our Help Center.

They all ready started collecting sales tax back in (2020??) now..... they want your SOCIAL to sell your used crap online........ yeah, count me out ....
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Yup. It’s a result of the American Rescue Plan Act of 2021. Ya can’t blame the IRS for the new rules. They were passed by Congress and signed into law last year.
 
smitty_p said:
Yup. It’s a result of the American Rescue Plan Act of 2021. Ya can’t blame the IRS for the new rules. They were passed by Congress and signed into law last year.
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They've been doing it a lot longer than that. Ebay and other online retail outlets have been grabbing state sales tax and other tax info for a few years. The states have been whining over loss of tax revenues to online sales for ages. Not only do they want the sales tax, they want the income tax too. State and Fed. Not only are the taxes involved, but their high fees also. Why I prefer a cash economy. Screw buying online. Bring back the Want Advertiser. It was a much nicer way of buying/selling stuff.
 
eSGEe said:
I like the thinly (not) veiled threat -- "and ensure your payouts are not impacted" -- in other words do as we say or your money will be slow to come if ever........ how cozy and warm this makes one feel about its online retailer ....

well my stores empty and will remain so --
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Yep, my sales are going to be local first and then maybe on a couple forums, but PayPal is also reporting any payments made through them...

My Reverb store has also seen the last of me for sales.

What really irks me is the taxing of shipping charges!
 
SG John said:
They've been doing it a lot longer than that. Ebay and other online retail outlets have been grabbing state sales tax and other tax info for a few years. The states have been whining over loss of tax revenues to online sales for ages. Not only do they want the sales tax, they want the income tax too. State and Fed. Not only are the taxes involved, but their high fees also. Why I prefer a cash economy. Screw buying online. Bring back the Want Advertiser. It was a much nicer way of buying/selling stuff.
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These are two different things, though. The sales tax collection which began a few years back was the result of a Supreme Court decision in 2018. This recent reporting requirement is a result of the legislation passed last year.
 
Iron1 said:
Charging sales tax on a used item that already had sales tax collected on it when it was sold new sure feels an awful lot like taxation without representation... maybe they need to focus on taxing drug dealers and politicians...
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These new rules have nothing to do with sales tax.

It’s an attempt to collect more income tax.
 
smitty_p said:
These new rules have nothing to do with sales tax.

It’s an attempt to collect more income tax.
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Which is the same. Taxation without representation...

If I buy a $100 pedal, I pay nearly $10 in sales tax, after I paid income tax in my paycheck when I earned that $100.
If I then sell said pedal for $100, that's not income to be taxed - it's me liquidating personal assets.
I'm taking my $100 out of the pedal and turning it into cash.
I.e. I'm not keeping the pedal and gaining $100, I'm turning my personal property worth $100 into $100 cash.
Capital Gains tax *might* apply if I were to clear more than $100 on the sale, but I'm not gaining any capital selling it for what I paid (or as is often the case, selling it at a loss, for say $75), I'm merely moving my money, that I already paid tax on, twice, to a different form.
 
Iron1 said:
Which is the same. Taxation without representation...

If I buy a $100 pedal, I pay nearly $10 in sales tax, after I paid income tax in my paycheck when I earned that $100.
If I then sell said pedal for $100, that's not income to be taxed - it's me liquidating personal assets.
I'm taking my $100 out of the pedal and turning it into cash.
I.e. I'm not keeping the pedal and gaining $100, I'm turning my personal property worth $100 into $100 cash.
Capital Gains tax *might* apply if I were to clear more than $100 on the sale, but I'm not gaining any capital selling it for what I paid (or as is often the case, selling it at a loss, for say $75), I'm merely moving my money, that I already paid tax on, twice, to a different form.
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True. Don’t get me wrong. I’m not defending this. It’s gonna be a huge headache in 2022 when people deal with this for the first time.

Note the line in the OP: “Note that reporting your sales doesn't necessarily mean you'll need to pay income tax on your sales.”

So, yes. If you buy that pedal for $100.00 and sell it for $100.00, your income is $0.00. So, theoretically, no income tax.

The goal is to keep people running businesses honest. But, I’m afraid the downstream effect on folks is going to be pretty confusing.

BTW, I’m not a tax professional! I’ve just been tracking these things in the news and trying to do some further digging.
 
These rules have been in place for years, not just 2021. However, the companies are starting to get hit by the big fuzz and now they are done holding the line.

Any income is supposed to be reported, no matter how much it is. The only thing that keeps most of us from reporting ALL our income, is the lack of reporting from those we get the side cash from. However, since Reverb is a company that is responsible for it, they are just reminding people that if they make more than $600 on their site, they will be reporting it to the IRS as they have to. You don't have to report your income, but if you don't file the 1099 when they do, then it's on you to pay the fines.

Reverb has been underreporting the 1099's and the IRS hasn't bothered since they are so far behind the 8-ball. They are so understaffed it's ridiculous.

Take this with a grain of salt, but my wife who works in the tax profession so far has not steered me wrong.

The thing about "Capital Gains" is, that only applies to "Capital" item investments. Things like stocks, art, collectibles, etc. Things that are appraised and designed for the use of investing. Items like off the shelf pedals, amps, and guitars do not generally qualify for "Capital Gains."

For example, if I go out and buy up 100 pedals for $100each, then turn around and sell them to random people for $200 each, I technically made $10,000 of extra income. This does not get lumped into "Capital Gains" and is only considered "income." However, since these were private purchases and sales outside of a website or company entity, there's nothing tracking this income and is a "Blind Loophole" to the tax system since no one knows it should be recorded. But, if you sit down in front of your tax preparer and say something, it's going on your taxes. They have a legal obligation to report anything that's offered up to them, or else they are legally liable in that case. In other words, keep your mouth shut.

With regards to Reverb and my example, if I sold them all on Reverb, then they have to report the sales to the IRS, provide me a 1099 for the extra income and now it's legally my responsibility to report those sales on my taxes as extra income.
 
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actually I was bout to post a long rant -- but it would be viewed as a political statement that would mean I would need to ban myself so Im going to go play gutiar instead .


DONT SELL ON REVERB UNLESS YA LIKE GETTIN SCREWED -- have a nice day -- :cheers:
 
Ghostman said:
These rules have been in place for years, not just 2021. However, the companies are starting to get hit by the big fuzz and now they are done holding the line.

Any income is supposed to be reported, no matter how much it is. The only thing that keeps most of us from reporting ALL our income, is the lack of reporting from those we get the side cash from. However, since Reverb is a company that is responsible for it, they are just reminding people that if they make more than $600 on their site, they will be reporting it to the IRS as they have to. You don't have to report your income, but if you don't file the 1099 when they do, then it's on you to pay the fines.

Reverb has been underreporting the 1099's and the IRS hasn't bothered since they are so far behind the 8-ball. They are so understaffed it's ridiculous.

Take this with a grain of salt, but my wife who works in the tax profession so far has not steered me wrong.

The thing about "Capital Gains" is, that only applies to "Capital" item investments. Things like stocks, art, collectibles, etc. Things that are appraised and designed for the use of investing. Items like off the shelf pedals, amps, and guitars do not generally qualify for "Capital Gains."

For example, if I go out and buy up 100 pedals for $100each, then turn around and sell them to random people for $200 each, I technically made $10,000 of extra income. This does not get lumped into "Capital Gains" and is only considered "income." However, since these were private purchases and sales outside of a website or company entity, there's nothing tracking this income and is a "Blind Loophole" to the tax system since no one knows it should be recorded. But, if you sit down in front of your tax preparer and say something, it's going on your taxes. They have a legal obligation to report anything that's offered up to them, or else they are legally liable in that case. In other words, keep your mouth shut.

With regards to Reverb and my example, if I sold them all on Reverb, then they have to report the sales to the IRS, provide me a 1099 for the extra income and now it's legally my responsibility to report those sales on my taxes as extra income.
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Thanks for the clarification!
 
Reportedly, a lot of folks use Venmo or such to shield income in legit businesses.
That is one of the reasons given to support the legislation- to catch the tax cheats.
Also something about making sure "the rich pay their fair share".
I'm not commenting on it, just repeating some of what I heard of it.

But the rest of may get caught in this net and have to document gains or losses from simple buying and selling of personal gear.
 
jtcnj said:
Reportedly, a lot of folks use Venmo or such to shield income in legit businesses.
That is one of the reasons given to support the legislation- to catch the tax cheats.
Also something about making sure "the rich pay their fair share".
I'm not commenting on it, just repeating some of what I heard of it.
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jtcnj said:
But the rest of may get caught in this net and have to document gains or losses from simple buying and selling of personal gear.
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That is exactly where it is going to get interesting. It is what I was trying to get at earlier. My comment about the legislation passed in 2021 was because it is that legislation that mandated that payment companies like Venmo will now have to report $600.00 and above. Before, it was $20,000.00 and above or 200 transactions per year. I may have made a mistake by grouping groups like Reverb into that. So, my bad on that.

But, you make a great point. This is likely to cause massive confusion for folks who may be just selling stuff off to clear out the house, but who sell more than $600.00 per year. That will be reported to the IRS. But, if it is really a loss, many folks will be unable to prove that because it’s more than likely they no longer have the receipts.
 
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