1099-K and the new rules

So I buy stamps and sell stamps. I sell my leftovers as I upgrade my collection. When there is meat on the bone I buy stamps just to sell to make a little profit to sustain my collection without having to spend out of my regular income. This has made my wife much happier as I don't hear the complaints any longer about how much I spend on stamps or coins. I understand with the new 1099-K rules that stamps and coin sales will be taxed at 28% and you can't take any deductions as it is considered a hobby. Is the 28% on the net profit if you keep close enough track to know what that is and can prove your numbers? Or do they just tax the gross? I keep every receipt and envelopes with stamps (postal history someday). This is going to be a lot of work to figure out what I paid for some stamps. I assume if I bought a stamp 2 years ago and I have the receipt I can use that value on 2022 taxes. I don't know, I may just throw in the towel. So much for trying to be a little entreprenurial in life.


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  • Clint....here we go, this is easy. You need to talk to a person knowledgeable about the new tax ramifications on your particular situation. I did (still pissed me off but my own situation). The last place you want to get tax advice from is a forum for stamp collectors/dealers. Find someone who is knowledgeable in this matter who you trust. I am also glad that your wife is happier. we are in the same boat in that respect. I can buy what I want as long as I keep selling. Good deal. Best of luck to you and have a great holiday season.
  • Thanks Greg! I did plan to speak to an accoutant. I'm just seeking any feedback as this is causing me some anxiety. I take my sells seriously as with my stamps (and coins) I am a perfectionist. I package the stamps in a dealer card and put that in a sealed 3x5 cellophane wrapper to protect from moisture in shipping. This goes in the middle of a thank you card that I write a personal note in along with a label stating my return policy etc. I am a top rated seller on eBay. Every stamp goes in the same type of package and I have free shipping. This costs me around 73 cents for each sell which I try to build into the cost of the stamp. The thank you card is stiff so I don't have to waste time cutting carboard etc. This makes it much easier and makes people happy at the same time. Now paying 28% on top of that might just mean I quit. Have a Happy Thanksgiving!
  • You bet but don't be anxious. Just check with the person you trust with this information. All the other stuff is irrelevant. The answers I got from my tax guy was not very pretty. Good luck!
  • It all depends on if the IRS classifies you as a business or a hobby. (Doesn't matter if you're selling stamps or not, that's not the determination of how you are going to pay taxes on the activity) There are certain criteria that the IRS uses to determine whether they classify it as a hobby or a business. There are different rules for each and that you will need to talk to a tax consultant as how the IRS will classify your sales.

    Hobby income was always supposed to be declared to begin with. (The only thing they changed with the new 1099 laws is they lowered the the threshold amount when they would send out the 1099's)

    The 28% is based on the capitol gains tax for collectables.
  • i don't see how the big fish who clearly have businesses can make any money with 28% tax rates. I'll be speaking to an accountant about my hobbies. I don't see how they can tax something that you paid sales tax on already either, but what do I know.
  • Ok, again, check with your tax accountant on your individual situation. Fundamentally, the rate isn't the issue so much as the new IRS rule that reaches into any online payment processor (PayPal, Venmo, Zelle, etc) to report any transactions over $600 per year for each account and issue a 1099 to you on that basis. But, as a dumb old geologist and part-time stamp dealer, and a big fan of singing beaver quartets.....get the best advice for you from your tax person.
  • Clint,

    Those that are running a business are under different rules than the rules that govern capitol gains. If the person is running it as a business the income from that is classified as business income. If not than the income from selling collectables is classified as capitol gains.

    This is a somewhat simplified answer


    5 Things You Should Know about Capital Gains Tax

    A capital gain occurs when you sell something for more than you spent to acquire it. This happens a lot with investments, but it also applies to personal property, such as a car. Every taxpayer should understand these basic facts about capital gains taxes.

    Business income isn't a capital gain
    If you operate a business that buys and sells items, your gains from such sales will be considered—and taxed as—business income rather than capital gains.

    For example, many people buy items at antique stores and garage sales and then resell them in online auctions. Do this in a businesslike manner and with the intention of making a profit, and the IRS will view it as a business.

    The money you pay out for items is a business expense.
    The money you receive is business revenue.
    The difference between them is business income, subject to employment taxes.

    That's just a general rule of thumb and again talk to a tax consultant to be able to understand your situation.

  • When you have a business your best friend is a good CPA.
  • Sounds like some cyptofascist cyberninjas stirring the pot about taxes
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