I finally have caught up with reading some of my outdated printed newspapers from the week and came across a story in the Washington Post “New or handed down, IRS wants a cut” of your money. Folks who sell their old garments, books and jewels on Craigslist and eBay can expect the tax man to come knocking on their door. It was only a matter of time before the IRS enforcers to figure out a way to get some of that electronic transaction money….that was not required reportable taxable income for quite sometime….a lot of folks call it a hobby! Remember the beanie baby craze….no taxes were attached to those sales. I would know because I was selling the so called rare cards, beanies and dolls on eBay like the rest of world strung out on a stuffed animals…now all I have are containers full of worthless material.
According to the Post article: Beginning next year, a new law “requires the gross amount of payment card and third party network transactions to be reported annually to participating merchants and the IRS,” according to an IRS summary. For their 2011 tax returns, “taxpayers who annually sell more than $20,000 worth of goods and have more than 200 electronic transactions” will receive a new IRS form known as 1099-K, reporting the proceeds, said a spokesman for H&R block. No worry for those who sell a few items online for less than they paid for them. However if your garage or yard sale is a business with recurring sales and purchases of items for resale, it will be considered an online auction business. The IRS believes that if they are watching your numbers than perhaps you will be incline to report the income, this is based on their research from receiving information about your transactions. Don’t believe me than read the Washington Post for the full scope of were the IRS is going with this new law set to take place with your next tax 2011 return……better yet surf over to the IRS website for the deets. Uncle Sam has updated their computer systems and they are no longer using those slow robotic clunkers in their office.