The IRS has announced tax filing changes for many United States residents. This measure will not apply immediately, but it will affect many Americans who have an online business and sell their items online.
So before the rule is effectively enforced we should watch out what sales we make. The IRS has stated that this new rule will not take effect until 2025, so for now we do not have to include anything in our Tax Return.
But it is good to know all the details of this “$600 tax rule”, which will affect a great number of Americans. Although it is true that although it affects these Americans, not all of them will have to pay taxes, a great part of them will have to do it.
Likewise, the IRS will be announcing by different official means if the rule will have any change finally or not. Although this rule was announced some time ago, it will not be until 2025 when it will start to take effect, so we can still rest assured.
WHAT IS THE NEW IRS RULE FOR INTERNET SELLERS?
Although this new rule will apply to United States citizens it will not affect all of them. The IRS will only take into account this rule for citizens selling on online platforms. Despite this, it is also true that it is not entirely clear whether it will only affect sellers who sell their handmade products or those who also sell second-hand products.
But be that as it may, in the case of having an online store (whether on Etsy, eBay or some other platform) and we sell our own products we must pay taxes in this regard in the future.
This will be so only in the case of exceeding $600 of sales per year. If it seems too big a figure it all depends on whether it is the usual source of income of a domicile or not. Many of these stores do not make these sales because they are extra income, but there are other stores where it is possible to reach $600 per year or even per month, so it is mandatory to include the sales in the IRS Tax Return.
And the most striking thing about all this is that we do not have to take into account the profits, but the total income. This means that regardless of the type of material we need to make our products, only the final sale will be taken into account. Some Americans might have stores that sell $600 a year but only make half of that profit.
In short, if you have an online store pay attention to your IRS Tax Return because if you do not include these figures you could run into tax problems and no one wants that, as it could be very negative for the economy of an average household.