eBay: Changes in US tax reporting legislation may affect small sellers

Recently, eBay released a new announcement in its official news center, stating that federal tax reporting legislation has recently changed, and this change will affect all sellers selling on online platforms (including eBay) .

According to the announcement, starting in January 2022, the IRS will require the use of Form 1099-K for all annual online sales over $600. Previously, this requirement only applied to sellers with at least 200 transactions per year and sales of more than $20,000. eBay pointed out that this change in federal tax reporting legislation will affect sellers ' sales in 2022 and tax returns in 2023, and it will no longer apply to sellers' 2021 sales and 2022 1099-K tax forms.

In response, eBay said that most sales on the platform are tax-free. So if a seller's sales exceed the $600 threshold, it does not necessarily mean that the seller must pay taxes. eBay stated that only goods sold for profit are considered taxable, and sellers do not need to pay any taxes on goods sold below the actual price paid. For example, if a seller bought a bicycle for $1,000 a few years ago and then sold it on eBay for $700 recently, the seller generally does not need to pay income tax on the $700 earned.

" This federal tax reporting legislation change has caused concern among eBay's less-savvy community, and eBay is currently actively raising the issue with the U.S. Congress," said eBay's CEO, Tom Cohen.

eBay stressed that this new tax legislation will cause confusion, excessive reporting of non-taxable income, privacy breaches, etc. eBay will emphasize to the U.S. Congress the undue impact this increase will have on small sellers on eBay and urge the U.S. Congress to raise the reporting threshold.

Subsequently, eBay announced some of the issues currently pending with the U.S. Congress:

1. Tax forms for small transactions are too complicated

2. For casual sellers who are not prepared to handle such tax reporting

3. Not accounting for sales of second-hand goods, which are rarely taxable income because they are sold for less than the original purchase price

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