.

[madcap_magician]

Also doesn't help find those transactions, if you do a lot, since no one put's knife or knife names in the Notes area to try to fly under the radar..

Mostly it's a problem for people in states where the transaction or dollar threshold has been set really low (I think the federal limit is $20,000 AND 200 transactions to require 1099 reporting from payment processors, but some states have it as low as $600 and a single transaction, I have heard). I find it hard to imagine that someone can do TWO HUNDRED knife sales in a year and not consider it a side hustle edging into a side business.

The big lesson learned is that keeping track of your state's tax law is kinda important, and that for most of us it would be wise to start documenting things. I don't come anywhere close to 200 transactions or $20,000 in sales, but as we have seen, it'd be good to know your profit/loss records in case the law changes on you, since your state legislature will not help you find old receipts.

 

[jlauffer]

Technically you'll only have to pay tax if you made profit, but the real problem is for people who didn't know this would be reported cash flow and have little or no documentation of their expenses or losses.

Exactly. In the case of MA, they changed the limits in Nov 2017 and made it retroactive for the whole year. Didn't know anything about it until the 1099 showed up.