Got the letter from Reverb....

[englishman]

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

 

[j.s.c]

taxmen are creeping all around the modern world.

 

[stevo]

…no

 

[JaredmacNeil90]

Why it’s a private sale! Taxes have already been paid on used items.

 

[TSims1]

Why it’s a private sale! Taxes have already been paid on used items.

Right?

 

[gretschbigsby]

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.

 

[JaredmacNeil90]

Right?

I think reverb is going to die soon

 

[WingZero]

Why it’s a private sale! Taxes have already been paid on used items.

I agree with you BUT not everything sold on reverb is second hand, actually I'd say it's about 30% that is new.
I did a quick search for a Stratocaster, focusing on Fender only.
For nearly 5000 results, 1300 were new items which should have taxes

 

[Highroller]

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]

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

 

[radd]

Why it’s a private sale! Taxes have already been paid on used items.

Unless I’m completely off base this has nothing to do with sales tax. This is about reporting annual income for income tax purposes.

 

[Hickeroar]

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]

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

 

[gretschbigsby]

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

That's true. You would need receipts and a more complicated return, unfortunately....

 

[wabash slim]

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]

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

 

[Gretschtim1]

You get what you vote for.
Bye bye middle class.
You can't talk about taxes without being political so I think this whole thread should go away!

 

[Desirsar]

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]

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]

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?