• If you have bought, sold or gained information from our Classifieds, please donate to Rocketry Forum and give back.

    You can become a Supporting Member which comes with a decal or just click here to donate.

Paypal Friends and Family and VENMO Warning.

jmasterj

Low and slow
TRF Supporter
Joined
Aug 16, 2021
Messages
1,233
Reaction score
947
Location
Maryland
I use my credit card to send Paypal F&F payments and I have to pay a fee. I suppose the Paypal fee is to cover the credit card fee.
Right - someone has to cover the CC processing charges, and it isn't going to be PayPal, lol. Paying out of your balance or with a linked bank account is free because generally bank transfers are free.
 

SecondRow

Well-Known Member
Joined
Jan 28, 2019
Messages
1,541
Reaction score
1,333
If you paid F&F with a credit card and get ripped off, would the CC company offer any protection?
 

AlexBruccoleri

Well-Known Member
TRF Supporter
Joined
May 11, 2021
Messages
489
Reaction score
237
I am confused on Paypal. Does sending money via the non friend/family option also incur some additional accounting for the seller? I always thought as a buyer, I could add a fee on my end to cover the cost of having insurance, but if it causes additional hassle, I can understand a seller's concern.
 

jmasterj

Low and slow
TRF Supporter
Joined
Aug 16, 2021
Messages
1,233
Reaction score
947
Location
Maryland
I am confused on Paypal. Does sending money via the non friend/family option also incur some additional accounting for the seller? I always thought as a buyer, I could add a fee on my end to cover the cost of having insurance, but if it causes additional hassle, I can understand a seller's concern.
PayPal is now sending 1099-K forms to people who receive more than $600 in goods& services payments. Those people are responsible for reporting any of that money that is income on their taxes. The fear for the average Joe is of being audited and having to account for why it's not all income.
 

BigMacDaddy

Well-Known Member
TRF Supporter
Joined
Apr 30, 2021
Messages
1,668
Reaction score
2,346
Location
Northern NJ
PayPal is now sending 1099-K forms to people who receive more than $600 in goods& services payments. Those people are responsible for reporting any of that money that is income on their taxes. The fear for the average Joe is of being audited and having to account for why it's not all income.
As far as I know that got delayed (and I did not get a 1099 from Paypal although I had more than $600 in G&S payments). Next year apparently...

G&S purchases are taxable income and will show up on the 1099; F&F payments would not show up on 1099 (I assume).
 

mh9162013

Well-Known Member
TRF Supporter
Joined
Apr 25, 2022
Messages
1,020
Reaction score
670
Location
Western, KY
As far as I know that got delayed (and I did not get a 1099 from Paypal although I had more than $600 in G&S payments). Next year apparently...

G&S purchases are taxable income and will show up on the 1099; F&F payments would not show up on 1099 (I assume).
F&F does not show up on the 1099, but G&S does.

And yes, this "rule" we're discussing has been delayed a year. Hopefully Congress will amend the law to be more reasonable. Then I can start selling online again a lot more.
 

tsmith1315

Well-Known Member
Joined
May 16, 2020
Messages
3,181
Reaction score
3,360
Location
Doerun, GA
As far as I know that got delayed (and I did not get a 1099 from Paypal although I had more than $600 in G&S payments). Next year apparently...

Funds received in 2023 will be reported on a 1099, unless something changes.

If I understand correctly, you're still responsible for claiming the income, but individuals selling off their stuff are unlikely to do so.
 

mh9162013

Well-Known Member
TRF Supporter
Joined
Apr 25, 2022
Messages
1,020
Reaction score
670
Location
Western, KY
If I understand correctly, you're still responsible for claiming the income
You understand correctly.

The problem is, so much of what we're talking about (selling goods online FOR A LOSS) doesn't generate taxable income. That's the whole reason why I abhor the the idea of seeing a 1099 for transactions where I'm LOSING MONEY.
 

cwbullet

Obsessed with Rocketry
Staff member
Administrator
TRF Supporter
Global Mod
Joined
Jan 24, 2009
Messages
32,810
Reaction score
10,214
Location
Glennville, GA
You understand correctly.

The problem is, so much of what we're talking about (selling goods online FOR A LOSS) doesn't generate taxable income. That's the whole reason why I abhor the the idea of seeing a 1099 for transactions where I'm LOSING MONEY.

You can still claim the lost income, but you are going to have to show receipts and itemize your taxes.
 

SecondRow

Well-Known Member
Joined
Jan 28, 2019
Messages
1,541
Reaction score
1,333
I don't believe you can claim lost income on hobby activities.
Used to be you could deduct hobby losses against hobby income. After the TCJA was passed, you can no longer do that. But you still have to report hobby income.
 

cwbullet

Obsessed with Rocketry
Staff member
Administrator
TRF Supporter
Global Mod
Joined
Jan 24, 2009
Messages
32,810
Reaction score
10,214
Location
Glennville, GA
I know, but you were talking about using a hobby loss as a tax deduction (at least that's what I thought you were getting at). As far as I know, that's not possible.
Not really, but I can see how you would take it that way. You would have to itemize eitherway and make enough that the $600 in sales matters.
 

mh9162013

Well-Known Member
TRF Supporter
Joined
Apr 25, 2022
Messages
1,020
Reaction score
670
Location
Western, KY
Not really, but I can see how you would take it that way. You would have to itemize eitherway and make enough that the $600 in sales matters.
I would LOVE IT if the IRS allowed for hobby losses.

I'll buy a model rocket kit for $15. Build it, then sell it online for $5. Huh, lookie here, a tax deduction that reduces my above-the-line income by $10.

Yes, I know it's unrealistic to expect this, but if the IRS taxes hobby income, shouldn't they give deductions for hobby losses? :rolleyes:
 

cwbullet

Obsessed with Rocketry
Staff member
Administrator
TRF Supporter
Global Mod
Joined
Jan 24, 2009
Messages
32,810
Reaction score
10,214
Location
Glennville, GA
Yes, I know it's unrealistic to expect this, but if the IRS taxes hobby income, shouldn't they give deductions for hobby losses? :rolleyes:
I think so. My wife is an accountant, and set said you can't do it also, but they also cannot tax the $600 as income.
 

jmasterj

Low and slow
TRF Supporter
Joined
Aug 16, 2021
Messages
1,233
Reaction score
947
Location
Maryland
As far as I know that got delayed (and I did not get a 1099 from Paypal although I had more than $600 in G&S payments). Next year apparently...

G&S purchases are taxable income and will show up on the 1099; F&F payments would not show up on 1099 (I assume).

Federally delayed. Some states have the $600 requirement themselves; I've already gotten my 1099-K.
 

jmasterj

Low and slow
TRF Supporter
Joined
Aug 16, 2021
Messages
1,233
Reaction score
947
Location
Maryland
I would LOVE IT if the IRS allowed for hobby losses.

I'll buy a model rocket kit for $15. Build it, then sell it online for $5. Huh, lookie here, a tax deduction that reduces my above-the-line income by $10.

Yes, I know it's unrealistic to expect this, but if the IRS taxes hobby income, shouldn't they give deductions for hobby losses? :rolleyes:

Not unless you want to file the whole schedule C for your business. Just report your profit as income on the one hobby business line and move on. The likelihood of you getting audited is pretty damn low.
 

KenECoyote

Well-Known Member
TRF Supporter
Joined
Mar 18, 2015
Messages
4,742
Reaction score
2,892
Location
New Yuck (North of the Sitty)
I think so. My wife is an accountant, and set said you can't do it also, but they also cannot tax the $600 as income.
I thought they were doing just that by default... taxing all of the sales generated as income (unless you prove otherwise, but good luck having receipts for stuff you bought years ago).

Also say you receive $601 from the sale, but does that includes the shipping and fees you need to pay for?

This is such a mess for sellers trying to sell off old stuff to get some side cash.
 

BigMacDaddy

Well-Known Member
TRF Supporter
Joined
Apr 30, 2021
Messages
1,668
Reaction score
2,346
Location
Northern NJ
I guess this is diverging from the thread's purpose but at this point I would rather get the 1099 from Paypal since their reporting is terrible. It is so difficult to track income with their reports -- for every payment you make (to purchase stuff) they show the money they draw in from your bank and it basically looks the same as actual income.

That being said, I definitely think there is a place for F&F transactions that are basically reimbursing people for their costs on things -- and that is the situation that @mh9162013 is referring to when you are selling hobby items for a loss (due to depreciation I suppose).

However, we should figure out a way to protect ourselves and others from fraudulent transactions.
 

cwbullet

Obsessed with Rocketry
Staff member
Administrator
TRF Supporter
Global Mod
Joined
Jan 24, 2009
Messages
32,810
Reaction score
10,214
Location
Glennville, GA
On the 1099, the IRS will always assume you are making income with sales. It is your job to prove you are not.

Sorry for the diversion, let's get back to the original topic.
 

cerving

Owner, Eggtimer Rocketry
TRF Sponsor
TRF Supporter
Joined
Feb 3, 2012
Messages
5,575
Reaction score
3,750
I didn't realize 2FA was available here - thanks, I now have it set up!

BTW, for those who configure 2FA, remember it when you upgrade your phone. Some authenticators, such as Google Authenticator, make migrating to a new phone easy. Not all do.
Microsoft Authenticator has an export/import feature that makes moving to a new phone easy. I got a new phone recently (my day job wouldn't support email on my 6 y/o iPhone SE 1st Gen anymore), and unfortunately one of the several authenticator apps they use did not move over. It was a total pain...
 

cerving

Owner, Eggtimer Rocketry
TRF Sponsor
TRF Supporter
Joined
Feb 3, 2012
Messages
5,575
Reaction score
3,750
They'll assume you're making income, but they won't assume that every dollar received is profit/income.
Actually they will, unless you file a Schedule C, which means you need to have a viable business to support it. If you think you're going to be doing much buying/selling you can create "Joe's Rocket Shop" on PayPal, you don't need an IRS business tax ID if it's a sole-proprietor. Keep track of your purchases and expenses, and you can file a Schedule C come tax time. If you only make a few hundred dollars, it probably won't even affect your tax liability.

Disclaimer, I'm not a CPA... and I'm not even an actor on TV pretending to be one.
 

firemanup

Well-Known Member
Joined
May 1, 2002
Messages
1,526
Reaction score
421
Location
Central Iowa
On the 1099, the IRS will always assume you are making income with sales. It is your job to prove you are not.

Sorry for the diversion, let's get back to the original topic.
That’s strange generally in court the one making the claim or assertion has the burden of proof.
 

QFactor

L2 - NAR & TRA
TRF Supporter
Joined
Nov 6, 2019
Messages
618
Reaction score
442
Location
Ohio
Microsoft Authenticator has an export/import feature that makes moving to a new phone easy. I got a new phone recently (my day job wouldn't support email on my 6 y/o iPhone SE 1st Gen anymore), and unfortunately one of the several authenticator apps they use did not move over. It was a total pain...

I loved the 1st Gen SE, had it forever. Small, solid, took a beating and worked flawlessly - until some iOS updates last fall.

Next thing I knew the phone kept telling me the battery was at 10%, then jumped back to 90%, then it would shutdown.

Finally had to get a new iPhone, the 13 Mini. Almost a good replacement for the SE.
 

Bill S

Well-Known Member
Joined
Aug 6, 2019
Messages
1,486
Reaction score
1,141
That’s strange generally in court the one making the claim or assertion has the burden of proof.

But you are dealing with the .gov, and its their IRS court, so good luck... have you got receipts for that stuff you bought 15+ years ago, and just recently sold for a loss? If not, pay up sucker. :(

I hate it, but it is what it is. Its put a real cramp on my selling off stuff I don't need, but I really don't need the extra hassle. If I can't do a face to face sale, donation or trash it goes.
 
Top