1099-K is killing me

[subzero3001]

With this new law, I'll probably cease operations in less than 12 months or so.

Even when I legally registered and linked all my stealth accounts, using one business partners name for each, we still have to pay taxes which will kill my profits.

Amazon keeps 25% + 25% inventory + loses + taxes = low profit.

First payment is due in less than 4 months :( April or so.

I am doing write offs as much as 90% on each account. But after the second year I foresee I will be unable to stay in business.

I think I will have to file for bankruptcy on every account / business. Any creditors?????

So I will let my loved accounts to die for good after a while. So many memories we lived together, I will miss them.

If I can make it to one more Xmas season, I cannot be more grateful.

So young and retired from what I love.

[jeffweico]

Keep in mind that taxes are due ONLY on PROFITS, not on your gross earnings.

So, if you had, as an example, $10,000 in sales and $7,000 in expenses, then your profit is $3,000. So, taxes are due on the $3,000 ONLY, not on the full $10,000.

I don't like taxes any more than the next guy, but they shouldn't be putting anyone out of business.

[subzero3001]

First of all I hope my accounts still alive after Dec 26. After that date I will see how much I write off.

I just hope not to get audited because Vero is not a girl.

[jeffweico]

Originally Posted by subzero3001

First of all I hope my accounts still alive after Dec 26. After that date I will see how much I write off.

I just hope not to get audited because Vero is not a girl.

If you mean that you sell Vero, it won't matter if you get audited. The IRS could care less what you sell. All they care about is that everything is reported correctly and the proper amount of tax is paid.

When they want receipts, they do NOT need specifics. So, If you sell DVD's, then get an invoice from your supplier that lists something like

"DVD Lot, 200 pcs, various titles, @ $5, total $1,000"

That will be good enough for the IRS.

[poorgirl]

Originally Posted by jeffweico

Keep in mind that taxes are due ONLY on PROFITS, not on your gross earnings.

So, if you had, as an example, $10,000 in sales and $7,000 in expenses, then your profit is $3,000. So, taxes are due on the $3,000 ONLY, not on the full $10,000.

I don't like taxes any more than the next guy, but they shouldn't be putting anyone out of business.

For doing the 2010 tax, what if I don't have both 200 transactions and $20000 in the whole year, do I still have to report the earrings? Please adverse.

[Gamefreak]

Time to get rid of most of your accounts and stick with only 1/2. Also get rid of your low profit items.

[subzero3001]

How much is safe to actually push?

70% inventory + 10% expenses + 20% profits?
80% inventory + 10% expenses?

[nobody999]

Originally Posted by poorgirl

For doing the 2010 tax, what if I don't have both 200 transactions and $20000 in the whole year, do I still have to report the earrings? Please adverse.

regardless if you don't do 200 transaction and 20k in sales, ANY profits made you should and need to report taxes....

[jeffweico]

Originally Posted by poorgirl

For doing the 2010 tax, what if I don't have both 200 transactions and $20000 in the whole year, do I still have to report the earrings? Please adverse.

Yes. If you have profits, you owe taxes. That has always been the case. The fact is, however, that many eBay and online sellers were not reporting or paying taxes on their online profits, which is why the IRS now requires the reporting.

Remember, though, that you do NOT have to pay taxes on your gross sales, ONLY on the profits.

So, If you sold an item for $100 and your costs were as follows:

• $50 for the item itself
• $15 eBay/PayPal fees
• $3.00 packaging costs
• $5.00 postage

That leaves you with costs of $73.00 and a profit of $27.00.

Taxes are due ONLY on the $27.00, NOT on the full $100.

This hs many pepople confused, thinking they owe taxes on 100% of their sales - but that is NOT TRUE! Taxes are due on profits, not on sales.

Also, if you are doing buisness in any type of volume, there are other things you can deduct as well. Things like depreciation of the equipment used to run your business, certain car expenses if a car is used in the operation of your business, part of the space used to run your business in and a ton of other things. HOWEVER - you cannot simply assign an amount to these things, there are rules that need to be followed. If the amounts involved are substantial, then you should speak with a tax professional. He or she will be able to get you every deduction which you are legally entitled to. You might be surprised at what can be deducted.

[GTB]

i know this is amazon x(the juicy stuff) but does anyone know if there is a limit on UK e bay transactions b4 tax man is notified or is it actually just on pay pal transactions???

i know pay pal has an income limit when they will notify the taxman,if your income reaches 20k i THINK it could be,not sure,that mite be the USA limit

can anyone shed any light on the UK situation

thanks

[vogeltron]

The 1099-K law is not new. Its been in full effect 5 tax years now. It sucks especially stealth wise I agree. But the other members are right you have to report your income regardless of this 1099-k law.

[BigCJ]

12-10-2011, 03:54 PM lol

[KenjiMishima]

Sounds to me like you aren't paying estimated taxes. Or you are doing something wrong in general.

[newtools]

you have to be careful with amz as i never received mail from them because they were stealth accounts but somehow they pieced sales together for 2014 tax year and in2016 i have a huge adjustment after filing my taxes instead of getting my refund it said I owed like over 8K in taxes. i flipped out. It was found out that amz send a 1099-k to the Irs claiming i did $20,058.00 in sales in 2014 and they sent it to the IRS in 2016 as added income for that year which amounted to unfilled income. i never got the notice because i had not changed my address on my tax returns after i moved for several years. they gave me time to explain it but i never knew until i had the huge adjustment. the kicker is that the IRS got me with all 20K as income, not counting it as a gross with cost of product, amz fees and shipping costs which left me with maybe 5-6k in profit. an amendment was sent in but it's been almost 6 mo.. still no 2014 adjustment or refund.. point of this story.. always keep your address current at the IRS to receive notices. and try to keep all the stealth acct info. even for years if you can, because i could not login years latter and look at it to rectify the issue and speak to amazon.. without an acct email and details there is no way to speak to anyone. a little suspicious of amz to have just a few dollars over 20K to report it and 3 yrs latter.

hope you guys enjoyed my story