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Post by stardiamond on Oct 14, 2023 15:12:00 GMT -5
The change to the $600 limit makes for a lot of work. I'll probably need to hire someone to do my taxes as a small business. I'm getting together my expenses. I've downloaded the first 9 months of paypal statements and converted them to an excel spreadsheet. For some reason the sum function doesn't like me and gives me the same number that is not inaccurate but garbage. I'll have to compute the total with a calculator. I don't know if my expenses are less than or greater than income. It's a hobby so making a profit is only a goal. Most of my purchases are paypal. There is some on the credit card for lapidary material and Amazon for supplies.
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Post by Pat on Oct 14, 2023 15:19:12 GMT -5
I hate doing finances, and I am now in charge of my finances. I’ve had a tax person for several years, but I gather everything for her, and I do all the rest. Someday, I will have it under control. Maybe next month!
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realrockhound
Cave Dweller 
Chucking leaverite at tweekers
Member since June 2020
Posts: 4,433
Member is Online
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Post by realrockhound on Oct 14, 2023 15:50:01 GMT -5
Are you inputting the function correctly? In the cell you want to sum thing up in type: =SUM( )
Between those parentheses, input the cells that are to be added up. An easy way to do this is click the first number in the column/row, then click the green box on the corner and drag it down/across to select all the numbers to be summed.
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Post by stardiamond on Oct 14, 2023 17:03:31 GMT -5
I used the summ icon. I ran a calculator on it. I then moved all the amounts to another column making them positive and got a good number. I used excel a lot at work. Creating spread sheets from text files and creating delimited files from spreadsheets. It was mainly formatting columns not using the power of the product.
The 1099k change came about as part of the covid stimulus package as away to generate revenue to pay for it. Congress votes on things that they have no real world experience with. If I buy a toaster, replace it with a better one and sell the original on ebay that isn't income. If I buy a toaster at Goodwill and sell it on ebay, there is some income involved but not the total amount. Considering the state of congress, the best a person could hope for would be another stay of execution. I went through this exercise in 2022 but didn't need to do anything with the information
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khara
fully equipped rock polisher
Member since September 2022
Posts: 1,979
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Post by khara on Oct 14, 2023 17:51:56 GMT -5
Exactly! This is what I’ve been ranting about, to the response from people of “oh it isn’t all that bad” (yes, IF you are a business already and already track all income and expenses, and already likely have an accountant). BUT, to the hobbiest, or to people just trying to clear out their home and bring in a few extra bucks each month, this really IS egregious. It is a tax not just on their income, but on their time in way more administrative duties, as well as their budget since most people would need to hire an accountant to help them through the process. For the hobbiest this takes much enjoyment out of the hobby to the extent of making it no longer worth it. For the used household items seller who is already struggling to make ends meet, it hits them the hardest. This was driven by decades of irresponsible spending by our so called representatives who can’t be trusted to manage our tax dollars and are now attempting to squeeze blood from turnips. Many of us hobbiest and garage sale sellers will go through much wasted time and expense, sacrificing nights and weekends of our lives, just proving that we don’t owe extra taxes so this is a futile effort at best by the government. We would all be better off if they instead scrutinized their own spending. I agree with the comment above that we all need to push back on this. We aren’t the reason that our government doesn’t have enough money.
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gunsil
spending too much on rocks
Member since January 2023
Posts: 341
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Post by gunsil on Oct 14, 2023 19:39:13 GMT -5
Well spoken Khara! Here in NY state we can have all the yard/garage sales we like and can sell anything we wish to, all without the tax man getting involved. I think most states are like that so why should we have to pay a federal tax for interstate or online sales of the same stuff? Now with a 1099 stating you made income the states will want their share. I don't sell on ebay or etsy, but I was considering selling some of the junk I have collected all my life on ebay, but I can't handle the paperwork business, it just feels immoral. I have sold some cabs and some jewelry over the years but I have a super well equipped shop and have never made what all the tools and machinery cost so technically I don't owe anything on those sales but I'll be damned if I'll do all the paperwork. Just government run wild and taxing the low income folks more percentage wise than the rich. E-mail your congressmen and senators!! I doubt you can actually get a message to the head honcho, Joe, but it may be worth a shot.
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Post by stardiamond on Oct 26, 2023 17:36:33 GMT -5
I started on a schedule c and wrote in numbers in pencil since the year isn't over. Inventory is tricky because my actual starting inventory starts 15 years before I started selling, so I am choosing Etsy inventory for start and end. I am defining cost of goods sold as what I spent buying materials and supplies since I have records of those. What I buy is not related to what I sell since I make stuff. I'm not buying toasters at wholesale and selling them at retail. Some of what I buy this year will be used to make stuff I will try to sell next year. My costs of making my previous inventory predates my filing as a business. I'm not going to deal with equipment depreciation. I bought a new 14 inch HP saw this year and not using the expense. I am counting wheels and blades since they get used up. Using my method, income is twice expenses, so I will be taxed on about 1/2 of my 1099k totals. Under the old rules, I would not receive any 1099k. I'm not holding my breath for a 1099k reprieve.
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Post by HankRocks on Oct 26, 2023 18:29:42 GMT -5
I understand the concern with all of this and the headache it's going to be pull everything together. If this was based the IRS making a logical decision, then it would be delayed as they are going to be adding a good bit of paperwork for themselves with very little to show for it. I know of one case were the tax payer has been waiting 6 months for the IRS to correct an error on their part that involves a 2 minute review of two documents. They have no time to do that but they have sent 2 notices saying they can't get to it. My Tax guy told us in April they had at that time over 20 million returns from last year that they are sitting on.
Unfortunately a logical decision may not apply here.
Good luck to us all.
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iamchris
has rocks in the head
Member since June 2023
Posts: 722
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Post by iamchris on Oct 27, 2023 7:21:49 GMT -5
Well spoken Khara! Here in NY state we can have all the yard/garage sales we like and can sell anything we wish to, all without the tax man getting involved. I think most states are like that so why should we have to pay a federal tax for interstate or online sales of the same stuff? Now with a 1099 stating you made income the states will want their share. I don't sell on ebay or etsy, but I was considering selling some of the junk I have collected all my life on ebay, but I can't handle the paperwork business, it just feels immoral. I have sold some cabs and some jewelry over the years but I have a super well equipped shop and have never made what all the tools and machinery cost so technically I don't owe anything on those sales but I'll be damned if I'll do all the paperwork. Just government run wild and taxing the low income folks more percentage wise than the rich. E-mail your congressmen and senators!! I doubt you can actually get a message to the head honcho, Joe, but it may be worth a shot. This is also untrue. This is unreported income. Just because you choose to not report it, it doesn't mean you don't owe taxes on it. Nobody reports it of course, but it's still technically owed. It's not government run wild - it's always been this way. Now there's just someone watching. |
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Post by rockjunquie on Oct 27, 2023 7:49:42 GMT -5
Well spoken Khara! Here in NY state we can have all the yard/garage sales we like and can sell anything we wish to, all without the tax man getting involved. I think most states are like that so why should we have to pay a federal tax for interstate or online sales of the same stuff? Now with a 1099 stating you made income the states will want their share. I don't sell on ebay or etsy, but I was considering selling some of the junk I have collected all my life on ebay, but I can't handle the paperwork business, it just feels immoral. I have sold some cabs and some jewelry over the years but I have a super well equipped shop and have never made what all the tools and machinery cost so technically I don't owe anything on those sales but I'll be damned if I'll do all the paperwork. Just government run wild and taxing the low income folks more percentage wise than the rich. E-mail your congressmen and senators!! I doubt you can actually get a message to the head honcho, Joe, but it may be worth a shot. This is also untrue. This is unreported income. Just because you choose to not report it, it doesn't mean you don't owe taxes on it. Nobody reports it of course, but it's still technically owed. It's not government run wild - it's always been this way. Now there's just someone watching. That is true. The Gov always wants their cut. |
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Post by Mel on Oct 28, 2023 18:10:30 GMT -5
The change to the $600 limit makes for a lot of work. I'll probably need to hire someone to do my taxes as a small business. I'm getting together my expenses. I've downloaded the first 9 months of paypal statements and converted them to an excel spreadsheet. For some reason the sum function doesn't like me and gives me the same number that is not inaccurate but garbage. I'll have to compute the total with a calculator. I don't know if my expenses are less than or greater than income. It's a hobby so making a profit is only a goal. Most of my purchases are paypal. There is some on the credit card for lapidary material and Amazon for supplies. I know the frustration too well. When I was buying/selling stock from collections, it was a huge headache at year end & inventory time. I'd just keep an excel file with purchases/dates/cost/what it was and item sold/to whom/cost/cost of postage/how it was paid. That said, in an ideal world, if it were me, well I'd just send in my taxes as "Income: 1 trillion. Taxes paid: 0." Provide them your records and include a little note about how you just never learned to do math and you'd like to contribute to job security at the IRS. Boom. You've just done a public service, your future taxes will be gone over with a fine toothed comb and you don't need to do any more math. Of course, they probably do a lot less lapidary in prison so you may choose to disregard my advice.... (Also, re: unreported income - Just remember Al Capone; they got him on tax evasion. Not rum running & gambling, but the fact he didn't pay his taxes...) |
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iamchris
has rocks in the head
Member since June 2023
Posts: 722
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Post by iamchris on Oct 28, 2023 19:49:40 GMT -5
Mel they do plenty lapidary work in prison! Have you never seen The Shawshank Redemption?! 😉
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Post by HankRocks on Oct 29, 2023 7:51:53 GMT -5
The biggest quandary for me will be how to apply a cost to rocks which were collected or procured years before any of this 1099k approach was even considered. In some cases I have rocks that have been in my possession for 30 to 50 years. I feel like I can come up with some average figures for the cost of cutting rocks, or polishing halves, even tumbling rocks - how much of each grit, average time in each stage, electricity cost per a finished 15 pound load. With the exception of some replacement parts or grit purchases, there are no receipts for the rest. It would seem that my calculated figures are going to have be taken as correct as long as i can show the breakdown.
I am getting a headache thinking about all this!!. Just happen to be doing the 2nd day of a Craft Show this weekend today and plan on talking to a couple other vendors to see what their thoughts are.
FYI Sat went very well for me, Sun will be about half if it follows the norm.
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Post by rockjunquie on Oct 29, 2023 8:00:20 GMT -5
OK Guys- Let's keep the politics out of it. Take it up in the Cave.
ETA The offending posts have been removed.
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Post by rockjunquie on Oct 29, 2023 8:01:00 GMT -5
The biggest quandary for me will be how to apply a cost to rocks which were collected or procured years before any of this 1099k approach was even considered. In some cases I have rocks that have been in my possession for 30 to 50 years. I feel like I can come up with some average figures for the cost of cutting rocks, or polishing halves, even tumbling rocks - how much of each grit, average time in each stage, electricity cost per a finished 15 pound load. With the exception of some replacement parts or grit purchases, there are no receipts for the rest. It would seem that my calculated figures are going to have be taken as correct as long as i can show the breakdown. I am getting a headache thinking about all this!!. Just happen to be doing the 2nd day of a Craft Show this weekend today and plan on talking to a couple other vendors to see what their thoughts are. FYI Sat went very well for me, Sun will be about half if it follows the norm. Good to hear about your show! Good luck today, too.  |
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Post by susand24224 on Oct 29, 2023 22:41:42 GMT -5
I've said it before, but I'll try again: (1) You do not pay taxes on used items your purchased to use unless you sell it for more than you paid for it. Selling old household items does not generate a tax issue unless you make a profit. Stardiamond got it right--if you buy used items for the purpose of selling them for a profit, it is taxable. Otherwise it probably is not. (2) This is not a new tax rule. We were always responsible for taxes on items made to be sold. Congress just figured out a way to catch the people who failed to abide by the rule. (3) I fully appreciate the concern of those that haven't kept records and the difficulty of putting records together (which has always been required, but now is being watched). Here's a link that may be helpful--the IRS has some pretty good materials on its website and their guides are far more understandable than the majority of government agencies. www.irs.gov/businesses/understanding-your-form-1099-k#sell |
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Post by stardiamond on Oct 29, 2023 23:18:05 GMT -5
The difference is paperwork. Under the old rules the threshold was $20,000 and now it is $600. My understanding of this is it was put in to help pay for the covid stimulus packages. Typical congressional logic of how will a program be funded. The 1099k has nothing to do with profit, loss or income. It is payments.
My son has no income and doesn't file taxes. A friend asked him to receive and distribute money through paypal. He will get a 1099k from paypal for 5-6 digits. The net result of all this will be zero, but the 1099k will only show the payments received and he will need to file a tax return and show all the transactions that this is not income. A 1099k should be about income not just money received.
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Post by Rockoonz on Oct 30, 2023 1:12:42 GMT -5
The difference is paperwork. Under the old rules the threshold was $20,000 and now it is $600. My understanding of this is it was put in to help pay for the covid stimulus packages. Typical congressional logic of how will a program be funded. The 1099k has nothing to do with profit, loss or income. It is payments. My son has no income and doesn't file taxes. A friend asked him to receive and distribute money through paypal. He will get a 1099k from paypal for 5-6 digits. The net result of all this will be zero, but the 1099k will only show the payments received and he will need to file a tax return and show all the transactions that this is not income. A 1099k should be about income not just money received. Paypal cannot generate a profit/loss for you, if you're like me you have at least made purchases, and possibly also sales, by other means than Paypal, so they have no idea, it's just a record of money transfers statement. It is NOT a statement of income, and does not need to be treated as one, you do not have to file taxes on it if you have expenses that exceed the gross reciepts. If you drove anywhere, even to the PO to drop off packages, there's mileage. $.65 cents a mile. Of the nearly 3k miles we drove for shows we sold at and places we purchased at this summer well over 2500 of it can be deducted. I did log it, but you don't need to, google directions is acceptable for any trips you have made. Half the cost of a large percentage of the meals we bought, even groceries we bought to cook ourselves in the trailer, are an expense at 50% of what it cost. Then there's shipping costs to deduct. |
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Post by rmf on Oct 30, 2023 3:46:56 GMT -5
I used the summ icon. I ran a calculator on it. I then moved all the amounts to another column making them positive and got a good number. I used excel a lot at work. Creating spread sheets from text files and creating delimited files from spreadsheets. It was mainly formatting columns not using the power of the product. The 1099k change came about as part of the covid stimulus package as away to generate revenue to pay for it. Congress votes on things that they have no real world experience with. If I buy a toaster, replace it with a better one and sell the original on ebay that isn't income. If I buy a toaster at Goodwill and sell it on ebay, there is some income involved but not the total amount. Considering the state of congress, the best a person could hope for would be another stay of execution. I went through this exercise in 2022 but didn't need to do anything with the information Some politicians think if you make $100,000 per year for 10 years that you are a millionaire and should pay taxes at that rate.
I read an article by bank of America yesterday that talked about the wealth transfer of $$ from the government to baby boomers. They think wealth comes from the government and was transferred to baby boomers because the government creates inflation so their houses/land increase in value over time. To me that is not wealth transfer but poor money management by the government/banking system. |
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Post by HankRocks on Oct 30, 2023 5:10:15 GMT -5
The difference is paperwork. Under the old rules the threshold was $20,000 and now it is $600. My understanding of this is it was put in to help pay for the covid stimulus packages. Typical congressional logic of how will a program be funded. The 1099k has nothing to do with profit, loss or income. It is payments. My son has no income and doesn't file taxes. A friend asked him to receive and distribute money through paypal. He will get a 1099k from paypal for 5-6 digits. The net result of all this will be zero, but the 1099k will only show the payments received and he will need to file a tax return and show all the transactions that this is not income. A 1099k should be about income not just money received. I think you have hit on the head, it's the $600 threshold that is causing all the issues. I would never have sold enough to reach the $20,000 threshold in a single year. Now I am going to be forced into the accounting game by this drastic shifting of the threshold. It would have made much more sense to maybe move it to $10,000. The move to $600 is putting them down in the weeds where they will spend $2 chasing $1 in taxes. There were about 160 vendors at the Show this past weekend and I was the only one selling rocks. A good percentage of these vendors count on their show sales to get by. I am betting that a decent percentage of them are not even aware of these changes. A few like me are hobbyist who are selling to make a few bucks to pay for some of the hobby expenses and to stay active. Of course those who only take cash will be able to stay off the IRS radar. The downside to dealing in a cash only mode is that you will miss out on sales as more folks these days carry cards and not a lot fo cash. Ok, how about this scenario. 10 years ago I buy a 10 pound piece of agate for $10, no paperwork. I finally slab it, with the cut off end piece weighing about a pound which I will breakup for tumble material and sell over a 4 year period. Additionally I cut 5 good size slabs and am left with 4 pound piece that I will polish on the Vibe Lap along with 7 or 8 different rocks. Now I take two of the slabs and cutout 8 pendants and then proceed to finish shaping on the rough diamond wheels and then tumble them to polish. It takes me 6 shows over 2 1/2 years to sell. Now I face polish one of the slabs and sell it 2 years later. The extra two slabs lay around for 3 years before I end up selling them. Now I have to come up with a cost formula for each process involved in getting to the sellable pieces. Oh by the way the tumbled pieces are getting mixed with rock I collected, rocks I paid more that the $1 a pound. Where do I start? Or I could just go to Tucson in Winter and load up the truck and trailer with ready polished material and then just sell those. The Overseas folks happy because I am sending money to them, I am happy as my accounting becomes much easier. This is way to easy to get political with so I will stop here. Henry |
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