eBay is rallying the troops to try to change 1099-K tax reporting rules, sending out a message to its seller community this week. eBay used the example of someone selling a personal item on their marketplace to support their argument:
“Imagine selling an old bike for $800 that cost you $1,500 a few years ago. Since you did not make a profit, the IRS does not consider this income taxable. But under this new law, you will still get a 1099-K. And now you’ll have to prove to the IRS that you don’t in fact owe any tax on that sale, which makes accounting work complicated.
People frequently raise the issue on eBay’s seller discussion forum, with some saying they think the threshold is too low, and others saying that even with a higher threshold, sellers are obligated – and should – declare their income.
In Monday’s post, eBay pointed to the FAQ section of its website and urged sellers to reach out to their elected officials and urge them to pass a new bill recently introduced in Congress that would “raise the threshold and limit the number of sellers receiving these useless forms”.
“But,” eBay continued, “we need your support to make sure this gets through! Go to our eBay Main Street website and tell Congress to act now to support Americans selling online. This will only take a few minutes, and if we’re successful, it can save you and millions of other sellers the hassle of unnecessary tax forms for years to come.
eBay linked a March 15 press release on Rep. Chris Pappas’ website about his bill dubbed the “Protecting Americans from Overpayment Taxes Act.” The press release named four New Hampshire online sellers.
According to Pappas’ press release, the legislation would do the following:
- Increase the reporting threshold from $600 to $5,000.
- Require entities to publish a plain language description of the taxation of income reported on Form 1099-K to reduce confusion among online sellers.
You can find the full message on eBay’s website where it asks sellers to click through to a page on its eBayMainStreet.com website to make it easy for sellers to contact their representatives.