Supposedly if you pay friends and family they won't report.
We offer multiple options to become a Supporting Member here.
What's wrong with postal money orders?
It's $600. Once you hit $600 in goods and seevices sales, you're getting a 1099. Then you have the pleasure of trying to find old receipts and records of what you paid for it to prove you sold it at a loss.I sense they're looking to catch self employed people underreporting their earnings for services provided under the table. House cleaners, landscape, hairdressers, handyman type people that just underreport
Unfortunately, you might get noticed/flagged if you're bringing in many thousands of dollars of "revenue" a year from online sales. Probably depends on how that compares to W2 wages claimed and all that. It's going to have to be material enough for them to care.
There's a handful of people on here that probably buy and sell $20k-$30k+ a year. That might get noticed (if PayPal).
They may also be trying to be proactive to lessen the chances on an audit due to unreported income.I think that some people are tying to make something out of nothing and making people think that they are going to have to pay tax on things they sold on PayPal. Tax experts! It's a lot of confusion and misinformation. These people may be working for BRANDON!.
It will likely trigger a "paper audit" if you don't report the 1099 income. IRS is going to be sending letters all over because of this. Which is why I commented this is a mess, since I don't believe every $600+ transfer of money on Paypal is a taxable transaction. Are all of us who sell guns out of a private collection, for hobby purposes supposed to report on Schedule C? Doesn't make any sense. But if you don't, you get a notice. I've been out of the tax game since 2017, will need to look into this further.They may also be trying to be proactive to lessen the chances on an audit due to unreported income.
Only way your writing off a loss is if its business.New tax law requires a 1099 on anything over $600 in accumulated sales through electronic payment services, such as paypal.
The way around this is either to send/receive as friends and family or, as a seller, keep track of every receipt and prove you took a loss.
Doesn't really differ from a check, venmo, zelle, cashapp, or PayPal friends/family. The only way you're covered is PayPal goods/services. Even this can backfire on the seller if the buyer opens a PayPal claim/dispute. If buyer is awarded the claim they'll have both the product and the money leaving you with no recourse. It's a shame that there's so many shady people and scammers in the world these days.I hope all read this!
Money order can be very bad. I normally don't buy if a MO is requested for form of payment.
I had a bad experience gave a sell a MO for a item 900.00 which is MO limit. He said he never got it and said I'd have to resent payment, I went to the post office and explained he didn't receive payment, the post office said it would take 30 days to trace it , to make sure no one cashed it and if not cashed they would stop it.
The person sold the item to someone else and within a month the guys wife cashed my money order, dead horse there, I lost 900.00 I exhausted all avenues, lawyer's,police, D.A. S office and I was told money orders were bad form of payment.
Not all people are bad but it only takes one.
P.S. that did not happen on this Forum.