Paypal 1099-K question....

[ctcsoft]

So I received more than the whopping 20k in payments and exceeded 200 transactions received.

So I got my 1099-K and total received was 38k.

My question is do I really have to pay taxes on this? I mean the majority of sales of hardware and other household items is for hobby, NOT for profit! If they think I profited off my payments received then they are crazy.

What should I do here? This hit me by surprise because I never even knew paypal was going to start issuing 1099's. No warning letter no nothing until 5 days ago.

Please post tax related questions in the stickied thread at the top of the forum. -Admin DrPizza

 

[Ns1]

40k revenue less 60k costs = no tax

 

[JulesMaximus]

You will need to figure out what the goods that you sold cost you along with your other costs of doing business to offset that income. And yes, you will need to pay tax on any gain.

 

[ctcsoft]

You will need to figure out what the goods that you sold cost you along with your other costs of doing business to offset that income. And yes, you will need to pay tax on any gain.

I'd say thats really hard for the "individual" to do and keep track of. I could see if I sold 38k worth of goods and it was 50% profit. Then yeah I would expect to pay taxes on that type of gain.

Buying a $1500 receiver, then selling it for $1000. Wow $500 loss, but all paypal and the gov't see is that you received $1000!!!!!!!!!!!!!

 

[Ns1]

I'd say thats really hard for the "individual" to do and keep track of. I could see if I sold 38k worth of goods and it was 50% profit. Then yeah I would expect to pay taxes on that type of gain.

Buying a $1500 receiver, then selling it for $1000. Wow $500 loss, but all paypal and the gov't see is that you received $1000!!!!!!!!!!!!!

All I see is an item that cost me $1500 that I sold for $500, causing me a -1000 loss.

 

[mugs]

I'd say thats really hard for the "individual" to do and keep track of. I could see if I sold 38k worth of goods and it was 50% profit. Then yeah I would expect to pay taxes on that type of gain.

Buying a $1500 receiver, then selling it for $1000. Wow $500 loss, but all paypal and the gov't see is that you received $1000!!!!!!!!!!!!!

You sold $38k worth of stuff on eBay. You're outside the normal "individual" not-for-profit range. It's not unreasonable that you be expected to prove you didn't make a profit.

And no, the government doesn't just see that you received $1000. You only have to pay taxes on your profit.

 

[Jaepheth]

/firstworldproblems

 

[wiredspider]

You sold $38k worth of stuff on eBay. You're outside the normal "individual" not-for-profit range. It's not unreasonable that you be expected to prove you didn't make a profit.

And no, the government doesn't just see that you received $1000. You only have to pay taxes on your profit.

Yea, $38k is more than some people make a year..