What is the correct 1099-K reporting threshold for 2024 calendar year - $600 or $5000?
So I started flipping vintage video games online this year to help pay for my growing guitar collection (expensive hobby, I know). I'm really confused about the whole 1099-K situation right now. PayPal keeps sending me emails saying I'll get a 1099-K if I hit $600 in sales, but then I was reading the IRS website and it mentioned something about a $5000 threshold being planned? I've made about $2700 so far this year from selling stuff, and I'm trying to figure out if I need to prepare for tax implications or not. I don't want to get blindsided come tax season, but I also don't know which source to trust here. Is the $600 threshold still in effect or is the $5000 threshold happening? Or is it just too early to know what's going to happen for the 2024 calendar year? Any insights would be super helpful! This tax stuff is way more confusing than finding rare game cartridges lol.
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AaliyahAli
The confusion is totally understandable! There have been several changes and delays to the 1099-K reporting threshold over the past few years. For the 2024 calendar year (2025 tax filing season), the IRS announced a phased approach. The threshold for 2024 is $5,000, not the $600 threshold that was originally planned several years ago. This is why some payment platforms like PayPal might still be mentioning the $600 threshold in their communications - their systems might not have been fully updated yet. That said, even if you don't receive a 1099-K because you're under the $5,000 threshold, you're still legally required to report all income from your reselling activities on your tax return. The 1099-K is just a reporting mechanism, not what determines taxability.
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Ellie Simpson
•Wait, so does this mean I should expect a 1099-K from Venmo if I sold more than $5000 this year, but not if I sold less? And do I need to report my sales if I actually lost money overall? I spent more on the items than I sold them for.
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AaliyahAli
•Correct - for the 2024 calendar year, payment processors like Venmo should only send 1099-Ks if your transactions exceed $5,000. If you're under that amount, you likely won't receive the form. Regarding reporting sales where you lost money, you should still report both the income and expenses. This is actually beneficial because you can show the loss on your Schedule C. You'd report the total sales as income, then deduct your costs (what you paid for the items, shipping supplies, selling fees, etc.). If your expenses exceed your income, that's a business loss that can potentially offset other income on your tax return.
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Arjun Kurti
I was in exactly the same boat last year with my online jewelry shop and got super stressed about the threshold changing. I finally found this tool called taxr.ai (https://taxr.ai) that cleared everything up for me. They have this feature that analyzes your sales and payments across different platforms and tells you exactly what you need to report. Their system explained that even though the 1099-K threshold is $5,000 for 2024, you still need to report ALL income regardless of whether you get a form. But the tool helped me figure out which of my sales were actually business income vs. just selling personal items at a loss (which isn't taxable). Saved me from overpaying on my taxes!
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Raúl Mora
•Does taxr.ai connect directly to payment platforms like PayPal and Venmo? I'm worried about giving access to my financial accounts to a random website.
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Margot Quinn
•I'm curious - how does it handle marketplace fees? Like if I sold something for $100 on eBay but they took $13 in fees, does the tool understand that my actual income was only $87?
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Arjun Kurti
•It doesn't need direct access to your payment accounts at all. You can either upload statements or even just take pictures of them, and their system reads and processes the information. They use the same security standards as banks, but without needing your login credentials. The tool is really smart about marketplace fees and other expenses. It recognizes things like eBay, Etsy, and Amazon fees and categorizes them properly as business expenses. It also helps identify other deductible costs like shipping supplies, mileage for post office runs, and even a portion of your internet bill if you're selling online. Really helped me maximize my legitimate deductions.
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Margot Quinn
Just wanted to follow up here - I decided to try taxr.ai after posting my question, and it was a game changer for my side hustle! I've been selling vintage clothes across 4 different platforms and was completely lost about what counted as business vs. personal selling. The document analyzer instantly recognized my PayPal and Etsy statements and broke everything down into taxable income vs. personal items I sold at a loss. It even flagged some business expenses I didn't know I could deduct! The best part was getting a clear answer on the 1099-K threshold with documentation I can reference if questioned. Definitely using this for my 2024 taxes.
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Evelyn Kim
For anyone struggling to get accurate answers from the IRS about the 1099-K thresholds, I found a service called Claimyr (https://claimyr.com) that was a lifesaver. After spending HOURS on hold with the IRS trying to get clarification on how to handle my mixed personal/business PayPal account, I was ready to give up. Claimyr got me connected to an actual IRS agent in about 15 minutes instead of the 2+ hour wait times I was experiencing. The agent confirmed the $5000 threshold for 2024 and gave me specific guidance on how to report my sales correctly. There's a quick video showing how it works here: https://youtu.be/_kiP6q8DX5c
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Diego Fisher
•How exactly does this work? The IRS phone lines are notorious for long waits. Are you saying this service somehow lets you jump the queue?
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Henrietta Beasley
•Sounds like a scam to me. No way some random service can magically get through IRS phone lines when millions of people can't. Probably just gives you generic advice you could find on Google.
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Evelyn Kim
•It uses a callback system. Basically, it navigates the IRS phone tree and waits on hold for you, then calls you when an actual agent is on the line. You don't skip the line - they just wait in it for you so you don't have to waste hours with your phone stuck on speaker. I was skeptical too until I tried it. The difference is that you're talking to actual IRS agents, not some third-party advisors. I asked very specific questions about my situation with mixed personal and business sales on the same PayPal account, and got clear guidance directly from the IRS. Not generic advice at all - they even referenced specific lines on Schedule C where I should report certain expenses.
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Henrietta Beasley
I need to eat my words about Claimyr. After dismissing it as probably a scam, I was still desperate for answers about my Etsy shop taxes, so I gave it a shot. Honestly blown away. Got connected to an IRS rep in about 20 minutes (instead of the 3+ hours I waited last time before giving up). The agent confirmed everything about the $5000 threshold for 2024 and walked me through exactly how to handle my situation where I sell both handmade items (business income) and personal collection items (potentially not taxable if sold at a loss). The peace of mind from getting official answers straight from the IRS was worth it. Sorry for being so negative before - just seen too many tax scams lately.
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Lincoln Ramiro
Just FYI for anyone confused - even if you don't get a 1099-K because you're under the $5000 threshold, you still need to report the income if it was business income (like if you bought stuff intending to resell it for profit). But if you're just selling your own personal items for less than you originally paid, that's generally not taxable income. I learned this the hard way last year when I overpaid on taxes because I reported everything from my PayPal.
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Faith Kingston
•How do you prove something was a personal item vs inventory if you get audited though? I sell a mix of both and don't keep great records.
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Lincoln Ramiro
•This is definitely a tricky area. For personal items, having original receipts or some documentation of what you initially paid would be ideal, but I know that's not always realistic. What I do now is keep a simple spreadsheet where I note which items are from my personal collection (with approximate purchase date and estimated original cost) versus items I bought specifically to resell. I also take photos of all personal items before listing them, which shows they were used. For business inventory, I keep all receipts and store them separately. Even basic documentation like this can help support your case if questions ever come up.
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Emma Johnson
Does anyone know if the payment apps will still send out 1099-Ks at the $600 threshold anyway, even though the IRS is using $5000? My Depop is linked to PayPal and I've made about $2300 this year.
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Liam Brown
•My accountant said some payment platforms might still send them at $600 because their systems were already updated for that threshold before the IRS made the change. He said to just keep good records either way.
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