Rob & Melissa from Flea Market Flipper talk about 1099s on eBay and whether they should keep you from selling online.
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Reseller Hangout Podcast - Should Getting A 1099 Stop You From Selling On eBay?
Rob: What's up, guys? On today's episode, we are talking about a question that we get all the time on social media.
Melissa: So basically is it should getting a 1099 stop you from selling on eBay?
Rob: So should getting a 1099 stop you from selling on eBay?
Melissa: So we've been, you know, we post stuff on social media, on Instagram, you know, YouTube and TikTok. And we always get the comment that, oh, now you gotta go pay uncle Sam. Or, I don't wanna get a 1099. So now they're gonna 1099 you for $600.
So we wanna kind of unpack that a little bit and what that looks like. But before we dive into all of that, any of that, we are not CPAs.
Rob: We're not CPAs.
Melissa: We are nothing.
Rob: Not giving you tax advice, but we're talking about our business. So we're telling you guys what we do in our business, and hopefully you can take that learn from it.
Melissa: Yeah. So if you wanna go find a tax professional, go do that. Talk to them and yeah, this is just for entertainment purposes only. No, this is what we do. This is what we do. Yeah. So a big roadblock for people is, okay, so the new 1099 rule came out this year. Well, it's starting next year that one, once you hit the threshold of $600, now you're gonna get a 1099.
Okay. So before the threshold was $20,000, so we would, we would still get a 1099. Our goal is to make more than $20,000 a year. So we would always get those previously from PayPal. And then now eBay managed payments, we're gonna get one. But like we wanna make more than that. We don't want to not. So we, we previously had made, made, got a ,1099 and the biggest thing is you're still supposed to report that anyway. So even though if you didn't hit before, if you didn't hit that $20,000 threshold, you still were required, required to submit your income and expenses. So your profits.
Rob: You just didn't get the 1099, but you still had to report it.
So no matter what, it didn't really change anything. You guys, still we have to record what we're making. We get that comment a lot on social media too. Oh, no uncle Sam's coming for you guys. Guys, we pay our taxes too. Just like everybody else. It's one of those things that you have to do. You gotta pay your taxes.
Melissa: So basically, should it stop you from selling an eBay? What do you think?
Rob: Absolutely not. So, I mean, this goes into, hey, we we're hitting inflation right now. We're the prices of everything is rising, gas prices, grocery prices, everything is going up. So what do you do about that? Do you scrimp, do you save, do you cut back?
Melissa: Which it's not bad to cut back.
Rob: No, but is that what you're doing or is that your answer for this? Ours is make more money. Let's figure out how we can make more money to account for the money that everything else is going up, let's figure out how we can make more money so we can pay for that stuff that's going up instead of really trying to cut and scrimp and skate, scrimp and save to get, deal with less money. So that's what our goal is. So it doesn't, and, and let us know too. What do you guys, what do you guys think about all this?
Melissa: Yeah, so we, the sky's really the limit with this business, which is really cool.
You can add more, you know, do higher profit items. You can add more time. You can do both and then really increase your income, by putting in more time. Absolutely. And we, yeah, that's how, how we like to make money. If we need to make more money, we will go throw some more time and energy into our flipping business.
Yeah. But getting a 1099, shouldn't stop you from selling. Shouldn't stop you from making money because then if you're not getting one. And you just don't make it more like you're not making money. Like it kind of doesn't make sense. Like, so are you gonna let it stop you from doing any side hustle? Like not just reselling, whatever it's gonna stop you from making money at all.
Like yeah, because you have to pay taxes is just kind of part of life. I mean, nobody likes taxes, but yeah.
Rob: Think about it this way. If your boss, if you do not, if this is a side hustle for you or you're dabbling and you want to try and make it a side hustle and you have a full time job, what if your boss came to you and said, hey, I'm gonna give you a raise.
I'm gonna pay you an extra $150, $200 a week. Would you tell your boss, no, I don't want the extra $250 or $150, $200 a week. I don't want it because I have to pay more taxes. No, that's not the case. That's what, that's how our business is too. We wanna make more money to account for, even though it does mean we have to pay more taxes, but let's make more money on the flips, more money profit.
So we can actually pay more taxes. I mean, that's, that's how you make up for it is you sell more items, you sell higher profit items, you do that, so you can have more money and then you have to pay out more taxes, but that's okay. Because you're making more, that's it, we're making more money to deal with.
So that is definitely one of those things that this is how we deal with it. But like I said, what is your take on it? Let us know.
Melissa: Yeah. And I think another big misconception about the new threshold, which I'm sure there's tons of other information out there about this, but is that okay, now I'm selling a marketplace, I'm gonna get a 1099 for $600, cuz basically any kind of marketplace that you sell through if you take payment through there or wherever you take payment through, aside from cash, they give it to you. Now what if I just bought the, I bought a couch for a thousand dollars and now I just sold it for $600. I'm gonna get taxed on it, now I have to pay taxes. No, not necessarily. No, you're not. So you're taking a loss.
So actually you can get a credit for that. If you bought it with the intention to resell, you could say you paid the thousand dollars, which you did. Now you bought got it for $600. So now you have $400 you lost $400, you lost $400. So that goes into the negative. So you basically have to just take, keep good records.
So if you're keeping good records of what your income is what your revenue is, and then you're keeping good records of everything that you're paying out for your business. Cuz that's really important. You need to keep all good records of all of your expenses. I mean, if you're selling on eBay, you have your fees and all that already in there.
But it's good to at least like check on a monthly or every other biweekly. But if you keep good records, then you're paying taxes on the profit. You're not paying taxes on the revenue. That's right. And you can as a, I mean, again, not CPA, but as self-employed there are some, some things you can write off, like, if you're going to go pick up an item, well, now you have your mileage to go pick up that item.
So there's a lot of things that people don't think of, that you can still put into account as an expense of your business. So, and I think somebody who dives into this a lot better than us, because again, we're for legal purposes.
Rob: We're flippers. not CPAs, not accountants.
Melissa: Our friend Mark Tew is a reseller. He's a tax expert and a reseller. So he knows all the things. He has a great bookkeeping and tax course. So you guys can check it out. We'll put the links below. If you wanna go check out, he has a great YouTube channel with a lot of information. So you can go check out and dive deeper into that.
But it shouldn't stop you.
Rob: No. Pulling it back. That's a question should getting the 1099 stop you from selling or making more money. Absolutely not. And we get this comment all the time on social media. Guys, if you can make more money, you're still making more money. You might have to pay a little bit, but you're still making more money.
So that should be your goal is to make as much money as you possibly can. And the, where you have to pay your taxes on it. It's okay. Yeah. You're making more money. You're surviving the inflation rise, the gas price, everything, you're accounting for that by making more money and you do have to pay some more out of taxes, but it should not stop you.
Melissa: Yeah.
Rob: It does not stop us. And comment, let us know. Yeah. If that's something that you're really struggling with, let us know about it. We wanna hear it for sure.
Melissa: Another twist on the same comment is, watch out the IRS is watching you. And obviously we put our stuff everything's on it's public, social, like it's on social.
So we're seeing it and like, okay, of course, we know that. We pay our taxes every year. Like we're not like, okay, thanks.
Rob: We have an accountant who takes care of that.
Melissa: Well, this is our business. Like, this is what we do for business. So yes, of course we, we, we pay taxes. Of course we make sure everything is taken care of.
So, yeah, just a quick, wanted to chat about it. Yeah. Taxes are not your favorite thing. And bookkeeping is not your favorite thing to talk about.
Rob: I usually fall asleep on these talks, but that's okay.
Melissa: You did. You did good.
Rob: I did.
Melissa: For not falling asleep. He doesn't, he really does not like that part of it.
Rob: I don't, I'm a flipper.
Melissa: It's not the fun part of the treasure hunt.
Rob: No.
Melissa: So, but it is important. It's super important. So keep good records, keep all your revenue, make sure you keep track of all your expenses. And that's another thing I wanted to add too, is it doesn't, there's not one perfect way to keep track. Like you have to keep track this way. It's whatever works for you that you can still keep good records.
It can be an app. It can be software, it can be pen and paper. Like I like a physical log. I spreadsheets, I usually use those. Those are my favorite really, now, Google spreadsheets. And yeah, that's how we've kept track for a long time. And now we just recently hired an accountant, so she helps us with that and yeah, but for the longest time it was just in Google spreadsheets, but it was keeping records.
So it was taking the, the good records and that is the most important part.
Rob: That's it.
Melissa: Do you have anything to add?
Rob: That's it.
Melissa: On your favorite subject.
Rob: You guys rock. Keep on rocking. Keep on flipping guys. And we'll talk to you on the next one.
Melissa: Don't let taxes keep you from making more money. You got this. Let's go make some more money.
Rob: Absolutely.