Got the letter from Reverb....

englishman

Gretschified
Apr 5, 2014
13,002
Detroit
Here we go, who here is handing your social security # to these places????


Dear Reverber,

We’re writing to let you know about a new IRS reporting requirement for 2022:

  • Beginning January 1, 2022, marketplaces like Reverb will be required to collect tax identification information from sellers who sell $600 or more on the platform in a calendar year.
  • This information is needed to ensure timely and accurate issuing of a Form 1099-K.
  • There’s nothing you need to do now, but we may ask you for tax identification information in 2022 if you hit the new $600 threshold.
Reporting your sales doesn’t necessarily mean you’ll need to pay income tax on your sales—it just means that you’ll be issued a Form 1099-K. You can learn more in our Help Center, which we’ll keep updated with the latest tax information. We’ll let you know if you need to take any action in 2022.

Thanks for being part of our community,

The Reverb team
 

gretschbigsby

Gretschie
Nov 21, 2009
202
chicago
I'm confused on why they charge sales tax on shipping... I wonder if they will then charge income tax on the seller who received the shipping money.
 

Highroller

Country Gent
Jun 11, 2015
1,921
Portland, OR
Yeah, and there's plenty of vendors on Reverb that aren't private sellers - they're businesses, and that's who this is directed at. But do I think the $600 figure is way, way too low.

Apparently, the IRS has no idea what guitar gear costs!
 

WingZero

Electromatic
Oct 21, 2021
66
Québec City, Canada
Yeah, and there's plenty of vendors on Reverb that aren't private sellers - they're businesses, and that's who this is directed at. But do I think the $600 figure is way, way too low.

Apparently, the IRS has no idea what guitar gear costs!
totally agreed IMO, it should be 3 times that amount per year, someone who sells 1 item per year SHOULD be ok, or most of private sellers
 

Hickeroar

Gretschie
Oct 4, 2020
183
Texas
Sounds like when you make $600 on a guitar you bought for $650, you just incurred $50 in business expenses...

Makes sense in my head anyway. xD
 

gretschbigsby

Gretschie
Nov 21, 2009
202
chicago
From what I understand, the monetary amount is from your state. In Illinois, it kicks in after $1000

I spoke with a CPA about all of this... he said that baseball card collectors, etc are in the same boat
 

wabash slim

I Bleed Orange
Feb 10, 2010
17,065
lafayette in
I can somewhat understand that states and the Fed want tax money. I just wish they wouldn't waste it so much. What burns me is all of the people (businesses and such) that want your SSAN for an ID. That SSAN is supposed to be used by you, your employer, and the SSA ONLY. I have a separate driver's license number. Too many people get scammed and have their identities stolen just because of this. Trust no one.
 

JaredmacNeil90

Gretschie
Jan 19, 2021
331
Pei
Y
Yeah, and there's plenty of vendors on Reverb that aren't private sellers - they're businesses, and that's who this is directed at. But do I think the $600 figure is way, way too low.

Apparently, the IRS has no idea what guitar gear costs!
Yeah . Most times a $600 guitar is a pos
 

Desirsar

Gretschie
Jun 9, 2021
226
Lincoln, NE
Give the IRS real teeth to go after the 1% evading taxes and they won't need to come up with creative tools like this that are really only a temporary fix until some highly paid accountants and attorneys figure out how to dodge this too.

Don't expect this to affect your private sales all that much, it gets reported and your fancy tax prep program automatically calculates and files for you that you don't owe anything on it. I've used three different major services over the years and they've all been flawless at figuring out exactly what can be deducted and what isn't taxed at all, never had an issue with a return.
 

swivel

Country Gent
May 13, 2018
2,183
PNW
The taxman doesn't care if it's been taxed before. They get tax on used items over and over again. It's a real pisser.
New car: $50k, Tax $4000
Sold 3 years later: $38k, tax $3040
Sold 3 years later: $26k, Tax $2100

That's over $9k in tax and it ain't done yet!

But wait, there's more! You paid ~25% income tax on the $50k, $38k, $26k etc... That's another $28500 tax paid!
But wait! There's more........
 

juks

Country Gent
Nov 26, 2020
2,139
Fremont, California
Yeah, and there's plenty of vendors on Reverb that aren't private sellers - they're businesses, and that's who this is directed at. But do I think the $600 figure is way, way too low.

Apparently, the IRS has no idea what guitar gear costs!

That $600 is IRS income tax reporting limit for companies to report to them. Over $600 companies have to report 1099. Below they don't.

Example: in 2019 I did a side kick with Amazon Flex. In course of the year I earner $4k. Amazon mailed me a 1099 that I submitted with my taxes. In 2020 I only earned $150 as I stopped doing Flex. Amazon did not send me a 1099. I still declared the $150 as income with my 2020 taxes, as you are supposed to. As that was not my only income for the year.

Ebay must be in the same pickle?
 


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