Author Topic: PayPal 1099K Massachusetts arrives after filing taxes - new rules for MA,VT  (Read 281 times)

misshathaway

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Anybody else get an unexpected 1099K from PayPal in early Feb for 2017 eBay transactions? Like many others I had already filed both fed and state. Old rule was that you would not get a 1099K for something like under $20,000 and hundreds (maybe 200) of transactions. Now in MA and VT, starting tax year 2017, you get a 1099K for anything over $600. Mine was $900 gross amount on 38 transactions, which includes transactions that were refunded and, of course, all the fees and postage. The gross amount minus the expenses and refunds is $405. Um yeah, sort of why I stopped bothering with eBay last summer. NOT SOON ENOUGH!

MA wants you to file the "taxable amount" on Schedule X but has no place to show the deduction of fees, postage and refunds from the 1099K gross amount. Not to mention that the household goods had only depreciated. So the taxable amount is actually 0. But I have no records going back to the original purchase to prove that. IRS says something to the effect of "we don't care about your online yard sales". They did not get the 1099Ks for the new $600 limit.

How are other casual eBayers in the "special" states handling this? Are you going to amend state and federal, which requires entering each individual item sale basis, cost, sale amount and offsetting expense?
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misshathaway

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So, after rooting around the DOR web site and everything google I could find, I decided to call the DOR for MA. I have gotten bad info before from the MA call-in lines and the wait is very long so I didn't want to. But I finally did and this is what MA DOR said:

Any yard-saley personal property you eBayed that depreciated or stayed the same you do not owe taxes on, same as fed. She said you do not file Schedule X since there is no taxable amount. HOWEVER, since there's no way to report the depreciation to offset the 1099-K, she said that they could come back at some point based on the 1099-K amount, and you would have to produce a list of every single item, its basis, and offset fees. I said that I had had some of the stuff for 20 years and no receipts for any of it any more. She said that there would be allowances for that when and if they come back and want you to reconcile the 1099-K amount.

I asked her why there is nothing on the DOR web site about this, and if she had been getting a lot of calls. She said yes and that they were probably going to update the web site.
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Roadrunner53

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Do you know if this includes Connecticut? I didn't get any forms from ebay. Not sure how much junk I sold but could be over $600.

misshathaway

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No, it's only for the special states of MA and VT.

MA enacted it in either nov or dec of 2017 and left PayPal to scramble to get the 1099Ks out by the deadline. In my case I didn't get it until the end of the first week of Feb. My 1099K includes every PayPal payment to my account. Not even the refund offsets that are matched by item on PayPal's own statement, never mind the eBay and PayPal fees. And there are 40 extra dollars on it that are not even on the PayPal statement.

If you want confirmation that you are safe (for 2017 anyway) google "PayPal 1099-K"

I guess MMMs wait until the last minute to do their taxes since a lot of people in those states are going to get hit with this and I think they may choose just to eat a tax they don't owe in order to get it done with. There was some audible sighing on the other end when I asked the telephone rep at MA DOR if they were getting a lot of calls on this.
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