eBay must collect social security or ITIN numbers from sellers who sell over a certain threshold, it warned on Monday. The post on the eBay Seller Announcement board cited new IRS tax reporting laws.
eBay stated: “Starting on January 1, 2022, U.S. tax reporting requirements will require all online marketplaces and businesses like eBay which process payments, to issue a Form 1099-K to sellers who receive $600 or more in gross payments. Previously, only sellers with 200 or more transactions and at least $20,000 in annual sales received a Form 1099-K. The new requirements may impact the 2022 tax return that you will file in 2023.”
Beginning in January, once sellers’ sales reach $600, eBay will ask them to provide their full 9-digit Social Security number (SSN) or Individual Tax Identification Number (ITIN) before allowing them to continue selling on eBay. “If you have not previously provided your full 9-digit SSN or ITIN, we’ll alert you in your account, and send you an email requesting this information when you reach the sales threshold.”
(Readers should remain alert to scammers who may try to trick them into revealing personal information outside of eBay communications.)
“What the IRS does and doesn’t tax
“You should also know that many sales on eBay aren’t taxable, so even if you have $600 or more in sales and we issue you a 1099-K, you won’t necessarily be taxed on those sales because in most cases, you wouldn’t owe any taxes on something you sold for less than what you paid for it. For example, if you bought a bike for $1,000 last year, and then sold it on eBay today for $700, it’s unlikely that you would be subject to income tax because your sale price was less than the price you paid for the item. We encourage you to talk to a tax professional when reviewing your 1099-K to determine whether you have taxable income and how to report amounts listed on your 1099-K.
“We’ll continue to keep you updated going into 2022. Look for emails and alerts from us that will help explain what’s changed, and what you may need to do next. In the meantime, you can learn more in our FAQ about Form 1099-K and how they affect you.”
You can find the full post on the eBay Seller Announcement board.