Why are many sellers still asking for fee-free payments, for tax purposes, when the law has been reversed back to $20,000 or 200 transactions per year?
Im about fed up with this whole thing. I had an interest in a camera on buy/sell and inquired if the asking price included the PayPal fee and shipping because it was not stated in the ad if that was or wasnt the case. After more than 24 hours I get a reply stating that they dont accept anything but fee-free but shipping was included. I passed. I was going to suggest that I would pay the PayPal fee but I didnt even bother because I feel like the whole for tax purposes justification is just BS.
I really don't think they would have agreed. Their words, "I don't accept any fee methods due to tax reasons". That's pretty cut and dry to me. If they would have stated that in their ad, I wouldn't have even looked twice or PM'd them my question.
I like what you've proposed but even short of that, I've seen ads that say something along the lines of: "Price includes shipping but not payment fee." That says to me, they will accept a fee-free type of payment but are also willing to accept say PayPal Good and Services as long as the buyer includes the fee so that they net their asking price.
I like that your layout spells it all out in an almost unambiguous way. The next time I decide to sell something, no time soon I think, I'll use one of your templates to do so.
Basically, people (sellers) trying to avoid getting their sales reported as income to the IRS after they reach a certain threshold. It was proposed that for 2026 the threshold was going to be $600. The law was recently changed back to the $20,000 and/or 200 transaction threshold.
You guys are off base criticizing this. In most cases there is no scam involved. I was one of those guys until the rules changed (again). I buy and sell a lot of camera gear - I don't do it for profit but because I like cameras. In one year I had $50k in "sales" that was reported to the IRS and I had to pay income tax on the whole amount or prove what the delta was. When I requested a no-fee payment method I always insured the package for full value.
Based upon that previous law, I had to keep hundreds of records despite not making a plug nickel on anything I sold. It created a real burden and cost me more money for my accountant to do my tax return.
This has nothing to do with "evading taxes", it has everything to do with being unfairly taxed and the burden that false "income" creates. PayPal took the approach that any money passing through them for G&S was profit-based.
Now that the rules have changed yet again, I am fine with regular PayPal as long as my resale in a year is modest. I'd perhaps be a little less judgmental on things like this.
Show me proof the limit is 20,000. According to this IRS page, the limit was set to $2500 for 2025 and will be $600 next year. You can reach the limit with one sale so its understandable why people want a fee free option. I dont want a 1099 for selling gear Im losing money on.
donmega wrote:
Basically, people (sellers) trying to avoid getting their sales reported as income to the IRS after they reach a certain threshold. It was proposed that for 2026 the threshold was going to be $600. The law was recently changed back to the $20,000 and/or 200 transaction threshold.
"Form 1099-K is used to report payments received for goods or services from payment apps (e.g., Apple Pay, PayPal, Venmo, or Zelle), online marketplaces, and payments from credit, debit, or payment cards.
The reporting threshold for Form 1099-K was $20,000 and 200 transactions from its inception in 2011 through 2023. However, the American Rescue Plan Act of 2021 eliminated the transactions requirement and reduced the threshold to $600.
This lower threshold for Form 1099-K was set to take effect for tax year 2023, but the IRS delayed its adoption. In November 2024, the IRS announced a plan to phase in the 1099-K reporting threshold change as follows:
More than $5,000 for 2024
More than $2,500 for 2025
More than $600 for calendar year 2026 and beyond
But under Section 70432 of the One Big Beautiful Bill Act (OBBBA), the reporting threshold for Form 1099-K returns to $20,000 and 200 transactions. Per the legislation, this takes effect as if included in section 9674 of the American Rescue Plan Act.
Yep, the language is very confusing in this notice but the IRS' position is $2500 this year and $600 next year. And I was wrong in my first post on this topic - it has not gone back to 2023 numbers. In fact, it's gotten worse.
In one paragraph it states that third party settlements (called TPSOs or simply payments) can reach $20,000 or 200 transactions. That was the OLD limit. In another paragraph it states for 2025 that aggregate TPSOs of $2500 are reportable as income. This is exactly why people want to use F&F. Yes, if you keep records and turn over gear quickly as I do, you can avoid tax. But in some cases, such as having had a camera for long periods and then selling it, if you exceed the $2500 this year, or $600 next year you are liable for "income tax".
I get it, people want to be protected when they buy or sell using PP. Especially things like cameras and watches (don't get more started on that mess). But I'm an honest guy and as my feedback attests to, I will stand behind my word on transactions.
This discussion here makes me very wary of online transactions these days that aren't from reputable, large businesses. I'm "new" here (been stalking without an account for a long time) and I'm looking at making a big lens purchase but these types of situations, where there is no safety net as the buyer, makes me hesitate. I completely agree the tax situation has made this very difficult but it'll also probably hamper some sales from going through.
Vorpahl wrote:
This discussion here makes me very wary of online transactions these days that aren't from reputable, large businesses. I'm "new" here (been stalking without an account for a long time) and I'm looking at making a big lens purchase but these types of situations, where there is no safety net as the buyer, makes me hesitate. I completely agree the tax situation has made this very difficult but it'll also probably hamper some sales from going through.
If the seller has feedback and you are still hesitant, contact some of the "Buyers" who bought from the seller and seek their input.
Is the Buyer/Seller also an active photographer here? Anywhere?
If my "comfort level" is disturbed with a transaction, I move on. I can wait.
Good luck!
Dan
PS I will say this to you/all...I have purchased large $$ items from Sellers with NO feedback and never had a problem in 20+ years.
I do vet the seller very thoroughly though!
I'm in the camp of folks who will never purchase a high-dollar item without G&S protection, unless of course it's a local transaction. There's just too much risk involved as a buyer. Even if a user has great feedback, there's a risk that their account has been compromised. Maybe I'm in the minority, but as someone who works in tech, these things happen way too often.
jakesweep wrote:
I'm in the camp of folks who will never purchase a high-dollar item without G&S protection, unless of course it's a local transaction. There's just too much risk involved as a buyer. Even if a user has great feedback, there's a risk that their account has been compromised. Maybe I'm in the minority, but as someone who works in tech, these things happen way too often.
Well that DID happen to me here on a FM B&S item....Thanks to "due dillegence and a great FedX man" a HUGE scam was averted on B$S.
The FBI IC3 California squad got them!!! Many members remember this incident!
Dan
