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Limewater
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Limewater Sun Aug 07, 2022 2:22 pm

Ziggy587 wrote:
Ack wrote:Keep in mind though, folks, that if the IRS considers you a business as an individual for paying on a 1099, that you can also claim business expenses to lower your tax debt. For example, you sold your items on the internet? Well now, your internet bill is technically a business expense because you use it for conducting business. The mileage accrued driving to the post office, any equipment purchases you make for cleaning/testing games, any money spent conducting research on value, etc., is now a business expense.


That's all well and good, but it would make preparing your taxes that much harder for such a small amount of money.


Most people take the standard deduction these days anyway. And if you ARE already itemizing your deductions, adding a few business expenses is really not a big deal.

I will repeat as well that adding 1099 income to your normal W-2-based tax filing really isn't much of a headache, paperwork-wise.
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MrPopo
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by MrPopo Mon Aug 08, 2022 1:22 am

I sincerely hope no one in this thread is sending in paper tax forms and doing them by hand. If you're using an online service the extra 1099s are trivial.
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Limewater
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Limewater Mon Aug 08, 2022 8:41 am

I think it's worth the experience to prepare a paper tax return at least once. I wouldn't even necessarily file it.

I did it a couple of years ago and it was pretty interesting. I actually e-Filed using an online tool, though.
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Jagosaurus Mon Aug 08, 2022 10:27 am

The filing of the 1099s isn't really the issue. Although I'm sure a lot of ebay users, etc won't really understand what to do with the form when it arrives. It's the planning and setting aside of those taxes now owed (not owed in years past).

3 scenarios once 1099 is issued:
- You're getting a smaller refund
- You'll owe more than expected
- You thought you were getting a refund and the 1099(s) now push you into owing

... none of those are fun, especially if unexpected and not planned for financially.

I've submitted multiple (normally 3 or so) 1099s for the past ~8 years. The 3 scenarios above become the potential issue, not necessarily entering another form into Turbo Tax.

The forms and complexity do add up though when you're looking at; W2(s), 1099(s), itemized deductibles, property tax, interest paid, business expenses, portfolio gains, etc, etc. I wouldn't be thrilled to get yet another (unexpected) line item to add into the mix from eBay or forum sales.

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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by bmoc Mon Aug 08, 2022 4:59 pm

Thanks for posting about this. I completely missed any news about this happening. It seems eBay is also bound by this new law. Between eBay fees and now taxes, I feel like it is only slightly better than selling to GameStop now.

From what I have been reading 1099's are taxed at a rate of 15.3%. Add that to eBay's 12.9% and you are looking at 28.2% off the final sale value. Plus the state & local government is already getting a cut (sales tax passed on to the buyer). Unless I'm missing something or I got bad information, that is absolutely criminal. I'm done selling on eBay if this is the case.

I've mainly stuck to here and eBay for selling games but I took a cursory look at Video Game Sage and Reddit GameSale to see what other game communities are doing in regards to their selling rules. It seems Video Game Sage is still anti-Friends&Family payments. GameSale allows Zelle/Friends&Family payments but posts lots of warnings about them.

Are there any other good marketplaces for video games that I should be looking at as a seller? Admittedly, I haven't sold anything substantial in a while.
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Ziggy587 Mon Aug 08, 2022 6:06 pm

Back when I first started eBaying, in the early 2000's, it was very uncommon that a seller didn't accept money orders. Everyone has moved on to PayPal for convenience, as well as the extra protection involved. But I never had an issue sending money orders back in the day (this was 20 years ago - I can say "back in the day," right?). And I don't think I would have any issue sending a money order to a forum regular (many hundreds or thousands of posts and plenty of positive feedback) outside of the inconvenience of it.

Long Island being overpopulated, and retro gaming becoming more and more popular every day, there's now a number of retro gaming stores around. Rule of thumb is you get about half of market value when selling to a reseller, but that might be worth it in trade for your time, fees, and now taxes.
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