1099 paypal change to several states

[GamerGuySam]

Anyone else fairly annoyed regarding the new 1099 they will be getting for G&S sales for using paypal this year? I know not all states have to deal with it but …


Some states (VT, MA, VA, IL, MD) have reporting obligations at a threshold lower than the federal reporting thresholds:

• Vermont, Massachusetts, Virginia, and Maryland: $600 USD in gross payment volume from sales of goods or services in a single calendar year regardless of the number of transactions.

if your using G&S an go over $600 prepare for an incoming 1099 next tax time.

 

[Atticus]

That’s such BS. Keep receipts on purchases as I’d imagine you could write that down…

Wonder if you could declare a loss on Oakley purchase?

 

[GamerGuySam]

That’s such BS. Keep receipts on purchases as I’d imagine you could write that down…

Wonder if you could declare a loss on Oakley purchase?

No clue but it has drastically complicated my buys and sells lately. I dont feel like paying 35% tax on whatever i buy and sell.. makes it much harder to part with something knowing it will end up being 65% of what i sold it for in the end.

 

[Atticus]

Mods advocating F&F?!

I vote

 

[GamerGuySam]

I vote

This site may need to switch and allow FF…a lot of watch forums seem to allow it.

I’m for it as well but, that doesnt help a lot of out of country people that don’t have FNF as an option in paypal. I’m currently talking to someone that wants a pair from me now and i cant find an option that wont cost me 35%. Be it paypal, crypto or what have you. International sales are REALLY hard now. In the states is easily done with F&F. Or Apple pay or something.

 

[TheDukeOfIce]

Damn, that is brutal.

What are some of the big sellers doing regarding this?

@Steven Goldberg

 

[Atticus]

Damn, that is brutal.

What are some of the big sellers doing regarding this?

@Steven Goldberg

Don’t think FL is on the list…

 

[Dbninc]

It’s actually not bad, most people have an office in their house, so the small business taxes are almost nothing when you take the proper deductions

 

[ZCForge]

Is there a link to the full details somewhere?

 

[GamerGuySam]

Is there a link to the full details somewhere?

Direct State Reporting Guide | Sovos

The state charts in this guide show the filing requirement and deadline for each state’s direct reporting requirements.

sovos.com

Below are the new requirements, by state:

Illinois:​

Beginning with tax year (TY) 2019, issuers of Form 1099-K will be required to submit those reports to Illinois electronically if required by the IRS to file them electronically. Beginning with TY 2020 and after, issuers of Form 1099-K will be required to submit those reports to Illinois electronically when four or more separate transactions that exceed $1,000 are reported or if you are required by the IRS to electronically file Form 1099-K. The filing due date for TY 2019 will be March 31, 2020. Find more information here.

Virginia:​

Under the new law third-party settlement organizations (TPSOs) must report payments made to participating payees with a Virginia address if those payments are greater than or equal to $600. This change is effective July 1, 2020, applicable to payment transactions made on or after January 1, 2020 with reporting due in April 2021. Find more information here.

Florida:​

Under Section 212.134 of the Bill, payment settlement entities and other third-party facilitators who handle payment card and third-party network transactions must file a 1099-K return with Florida pursuant to IRC Section 6050W. 1099-K returns will be due by the 30th day following the IRS due date and are required from payment settlement entities operating in Florida or those filing 1099-K reports on behalf of participating payees with an address in Florida. All returns must be filed electronically. Failure to file a required 1099-K return will result in a $1,000 penalty for each failure for each month the return is due, with the total penalty amount imposed on a reporting entity capped at $10,000 annually. Penalties may be waived by the executive director if a failure to file was due to reasonable cause and not willful negligence, willful neglect, or fraud. This 1099-K filing requirement will become effective January 1, 2021.

Maryland:​

SB 192 requires TPSOs who must issue Form 1099-K to report payments made to their payees if the amount of the reportable payment meets or exceeds the filing threshold under §6041(A) of the Internal Revenue Code. This change effectively strips away the transaction number from the federal reporting threshold established in §6050W of the Internal Revenue Code and lowers the dollar amount to $600 or more in reportable payments. SB 192 is effective as of June 1, 2020 and is applicable to payments made on or after January 1, 2020 with reporting due to the Comptroller’s Office and the participating payee at least 30 days before the federal filing deadlines for the information. Find more information here.

There are currently 9 states, including Maryland, that have 1099-K threshold reporting below the federal threshold: Massachusetts, D.C., Mississippi, Vermont, New Jersey, Arkansas, Illinois, Virginia and Maryland.

According to tax and regulatory experts, many other states will follow suit, and soon.