Taxes for selling your gear

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dcrigger

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Wait? The govt wants me to report proceeds from sales of things I bought with income that was taxed? I don't think so. I lose money on this stuff, so no capital gains to report.
Whether the money you bought something with was taxed or not has nothing to do with it.

Again nothing has changed - any money that you receive for any reason has always supposed to be reported. All that's changed is that other parties involved in the transactions (middle men like Ebay for instance) are now more likely to report their involvement (notifying us with 1099's) at lower levels than before.

Welcome to the age of computers!

Back in the day, keeping track of and reporting these small amounts would've been too costly - now it's just an additional line or two of code.

Leaving the only way to have no involvement with any of this as doing only transactions that are one-to-one, in person sales with green money that never gets deposited anywhere.

But again - no tax law has changed - these small transactions always had tax liabilities - we just lived in a more cash on the barrel head sort of world.
 

Pink69

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Correct me if I am wrong but this does not go into effect until the year 2022, is that right? Thanks
 

IBitePrettyHard

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Nope nope nope - this IRS thing has nothing to do with sales tax (that's a state thing).... it is not the item that is being taxed. It is the seller's profit.

But let's look at your tax scenario and I'll think you'll see how nothing is being taxed more than once - though there may be multiple tax payments along the way.
Example - I recently sold an old comic book I bought for a dollar and sold for $100. If I paid sales tax on the original purchase of a dollar.

So the original dealer paid say, 50¢ for the book. As a reseller, he wouldn't have paid sales tax on that purchase - though he was responsible for collecting 8¢ from me at the time of sale... Assuming his store had zero other expenses, he would've paid income tax on his profit from that sale - so say 28% of 50¢... basically 14¢ (though again this would be a lot less - as his rent, labor, etc. costs would lower his profit and his tax owed.

Now 40 years later, I sell the book for $100...

My profit will be $99 - which I would be taxable - but this is NEW money - money that has never been taxed before - so there is no double taxation involved at all.

As for the sales tax owed on my sales transaction - why should I get to buy something for a dollar and resell it for $100 and not owe the state it's share of that transaction - when the auto repair shop down the street buys things from wholesalers, then sells them for a profit and those transactions require sales tax be collected. How am I and he any different? With my $100 sale, I'm doing profitably doing business in my state - why shouldn't my sale put a little bit in the state kitty - so the traffic lights and the road between my house and the mail center are kept functioning. Because those things don't pay for themselves... and I'm using them in my successful pursuit of making money.

In a nutshell - when looking at these things - I think it makes more sense to not focus so much on the item and instead focus on the money. And by doing so - and looking at it all with a business point of view - it makes all the sense in the world. At least it does to me.
That still sounds like being taxed twice for the same item, just with more words.

I get what you're saying though.
 
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drawtheline55

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This is completely going to BACKFIRE on the feds/IRS...Mass has had this in place for 2 yrs, sell over 600.00
get a 1099...When I sell my stuff, there rarely is a profit, BUT there are expenses, every time I go to DCP, mileage deductible, tolls, same....in short my expenses for my hobby, that the IRS now considers a business
are Deductible.....so the geniuses of Mass figured this out and realized, that sellers would show big expenses
AND PAY NO STATE INCOME TAX....so now they told us if you sell for a hobby and get a 1099

JUST IGNORE IT !.....you can run forever int the red if you are business....just keep putting money into it.
Which nobody would do, as a hobby my expenses would dwarf Any profit....if the IRS calls it a business

GREAT !!!!!
 

RIDDIM

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Taxes are theft. It's a fancy way of

That still sounds like being taxed twice for the same item, just with more words.

I get what you're saying though.
That's one way of looking at it. Another is that taxes are the price of civilization. Do you like living in areas where we have working traffic lights, law enforcement, decent roads, air traffic control, schools, etc? These are common-use items we all benefit from. Everything has a price. If you don't like living where these things exist, try living someplace where they don't.
 

dyland

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That's one way of looking at it. Another is that taxes are the price of civilization. Do you like living in areas where we have working traffic lights, law enforcement, decent roads, air traffic control, schools, etc? These are common-use items we all benefit from. Everything has a price. If you don't like living where these things exist, try living someplace where they don't.
And yet another way of looking at it is that open debate on civil matters are a cornerstone of said civilization. If you don't like living where such a thing exists, try living someplace where it doesn't. ;)
 

RIDDIM

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And yet another way of looking at it is that open debate on civil matters are a cornerstone of said civilization. If you don't like living where such a thing exists, try living someplace where it doesn't. ;)
Been there, done that. As I said, everything has a price. Figure out what's most important to you and go from there.
 

IBitePrettyHard

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That's one way of looking at it. Another is that taxes are the price of civilization. Do you like living in areas where we have working traffic lights, law enforcement, decent roads, air traffic control, schools, etc? These are common-use items we all benefit from. Everything has a price. If you don't like living where these things exist, try living someplace where they don't.
Of course, everything you listed is a vital government service. But for every worthwhile service, there are 100 more things the government is wasting our money on.
 
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Old Drummer

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I don’t understand taxing used stuff. Didn’t the government get it’s fair share on the item when it was new? Even if I get a 1099-K, I won’t be paying.
Actually, if you read the article, you're not taxed on stuff you sell for no more than you paid, which is most used stuff. The legitimate complaint is just the hassle (and sometimes expense) of filing extra tax forms. The flip side, though, is that some people aren't merely selling used stuff but are operating businesses without paying the same taxes that competing brick-and-mortar businesses have to pay. To catch these freeloaders the rest of us get hassled. There's not a good solution.
 

dcrigger

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Of course, everything you listed is a vital government service. But for every worthwhile service, there are 100 more things the government is wasting our money on.
You know, that's a popular thing to say.... but is it really true?

I would be willing to bet that I could list far more things that our tax dollars pay for that are important, useful and not at all a waste, compared to the list anyone can come up of wasteful things.

I'm not saying there isn't a certain amount of waste to be found - and that one's person waste could match another person's definition of essential. But it's a big country with lots of parts and pieces involved with keeping it functional, successful, safe and secure - both now and in the future. So when you break down just the broad essential categories of infrastructure, education, military, intelligence, law enforcement, citizen safety, social safety net, justice, research into all of their competent parts... we end up with a whole lot of parts pieces.

And as I'm sure as anyone who has had a need to deal with most any government program or department... none of them ever seem over-funded. In fact most seem to be working on the thinnest of budgets.

So I'm pretty sure I could rattle off 100 essential useful things our taxes pay for with no problem. Your statement implies that there would 1,000 wasteful things that go along with my 100. And yet, again I'd bet that most making this claim would have a hard time even coming up with 100 wasteful things, let alone 1,000.
 

Rich K.

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I count everything I sell (usually something once or twice per week at least) that is paid by paypal, venmo, cash app, zelle, reverb and ebay (everything paid online) as income.
Everything I spend on drum stuff, including cash purchases, are expenses.
Everything I buy for drum stuff (packing supplies, cleaning supplies, hardware items, etc.) are expenses.
I keep track of all the gas I buy, monthly phone bill and deduct a portion of that, that my accountant figures.
Gigs that are 1099'd are income.
Technically, all gigs and sales are income, but you know, cash...
My 1099 from teaching at a store is income, as are the privates I give that are paid online. Related expenses (gas, books, etc.) are part of my expenses.
Technically...everything you sell, for whatever you sell it for is income. It's your responsibility to keep track of all your expenses to show you didn't make much profit. Then, of course, you pay taxes on your adjusted income. This has nothing to do with sales tax obviously, and the items sold aren't really taxes twice, though anytime someone sells that item, it's income.
All this is really easy to take care of...pay for as much as you can using credit / debit cards, paypal and other online payments, so you have your records handy. Keep track of all your cash purchases.
Dump everything into quickbooks or a similar program every day, or often. When it's tax time, you just generate reports and send it to your accountant or use the info if you do your taxes yourself.
 

ludwigsok

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Not knowing a whole lot about the whole tax issue.... as a private seller selling a couple things a year, are we supposed to COLLECT sales tax on what we sell?
 

ARGuy

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Not knowing a whole lot about the whole tax issue.... as a private seller selling a couple things a year, are we supposed to COLLECT sales tax on what we sell?
First, sales tax and income tax are two separate issues, and this thread was originally about 1099's for federal income tax purposes.
Sales taxes are a state issue, and each state has different requirements for when sales tax needs to be collected. I believe most states don't require sales tax to be collected for casual sales, which is what you are describing.
 

bpaluzzi

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So I'm pretty sure I could rattle off 100 essential useful things our taxes pay for with no problem. Your statement implies that there would 1,000 wasteful things that go along with my 100. And yet, again I'd bet that most making this claim would have a hard time even coming up with 100 wasteful things, let alone 1,000.
(Agree entirely, but it would be 10,000 wasteful things that he's implying)
 
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IBitePrettyHard

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You know, that's a popular thing to say.... but is it really true?

I would be willing to bet that I could list far more things that our tax dollars pay for that are important, useful and not at all a waste, compared to the list anyone can come up of wasteful things.

I'm not saying there isn't a certain amount of waste to be found - and that one's person waste could match another person's definition of essential. But it's a big country with lots of parts and pieces involved with keeping it functional, successful, safe and secure - both now and in the future. So when you break down just the broad essential categories of infrastructure, education, military, intelligence, law enforcement, citizen safety, social safety net, justice, research into all of their competent parts... we end up with a whole lot of parts pieces.

And as I'm sure as anyone who has had a need to deal with most any government program or department... none of them ever seem over-funded. In fact most seem to be working on the thinnest of budgets.

So I'm pretty sure I could rattle off 100 essential useful things our taxes pay for with no problem. Your statement implies that there would 1,000 wasteful things that go along with my 100. And yet, again I'd bet that most making this claim would have a hard time even coming up with 100 wasteful things, let alone 1,000.
I stand by my statement and respectfully disagree. Listing everything the Gov wastes our money on would take all day and it would inevitably get political even if it wasn't our intention. So I digress.
 

JDA

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I would be willing to bet
I'm not saying there isn't
Pure Dave!!!!
Both sides
most making this claim
I know of a few senators
past and present
that died trying




We are the 12th most in-debt nation on the planet
Look it up

We are so broke, bankrupt off-the -chart indebted into the future It's Off The Charts.
In the basement of nations 12th from the bottom
look it up.

We're in slightly better financial position than Zimbabwe
and there's those that want to spend more
 
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JDA

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Site has two rules, one is no politics. OP states in the first sentence, "please don't make it political" which apparently guarantees that the thread slips into the abyss of politics, leaving an unknown number of viewers wanting to opine in one way or another but for unstated reasons resisting that urge and shaking their heads.

Which leads me to believe that whatever the govt. wastes in dollars is probably more or less equal in effect to the waste of time it is having a no politics rule or asking politely from the get-go not to veer that way.
I didn't start the fire you had it right in this post #
 
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