This is a bill trying to pass now to raise it from $600 to $5,000 - everyone should be contacting your reps to try and get this pushed through. It’s bullshit and we should all fight against it.
Ikr, my favorite part is the name. American rescue care act lol. Yeah, because some guy on ebay making 5k a year selling shit is what's crippling our economy. Try careless spending of our tax money and poor allocation and efficacy. But no, little Timmy sold his magic the gathering set for $625 better tax the fuck put of that to pay for government luncheons.
It's another straight up "tax and blame the poor people" tax. There's twenty billion a year more the wealthy should have been paying, and yet the government does this shit and claims the 8 billion total over the next like 6 years will fix everything.
Hear me out: what if we just also taxed the rich, the corporations, and the churches appropriately? Upwards of 70% marginal tax rate a la pre-Reagan era.
Good thing the IRS is going after the little guys instead of trying to tackle he Trump-esque levels of fuckery going on! One step closer to feudalism, can’t wait.
This is more geared toward the online market place transactions than anywhere else. If you were a gig worker they were already hitting you with a 1099 at the end of the year anyways.
Most gig worker apps already auto issue 1099s. This mostly effects people who flip stuff on Ebay. Even then, there are multitudes of easy ways around this stuff as long as you aren't doing business volumes.
For example I have sold some stuff on Mercari. They told me if I sell over $600 a year I have to fill out a tax form. So I have intentionally stopped selling anything until 2023 because I'm pretty close to $600.
Billionaires hiding money all over the world, getting tax breaks, corporations paying zero tax, but yeah let’s go after the person who got paid $600 on venmo
Making a big deal over 600 bucks vs the millions and millions of dollars the rich make really makes no sense...they need to go after the rich who don't even pay their taxes, not ppl trying to get by.
The top 1% just had the most profitable couple of years in history, so obviously the best way to counter that, is squeezing the last two cents out of the little guy/girl trying to make a tiny bit extra. This is wrong on so many levels.
Good, what we need is to really crack down on people with so little money that $600 makes a difference. You know, the kind where the IRS will waste more money going after them than they'll get out of it. But as long as it hurts poor people. Great job, America.
Yeah, but those people with so little money that $600 makes a difference also don’t have the money to pay high priced lawyers that the rich do. So it’s probably easier for the IRS to bully on those that can’t pay for proper representation. Ya know, ‘murica.
They definitely love to find new ways to fuck with us. It’s unlikely that in the big scheme of things this will net them that much but the perception of control they have over us is what really gets them off
You say the government, but that’s really misleading. You should be pointing fingers at the wealthy class that influences government policy. Most people in government are there to do the right thing, but can’t because a small group of people through lobbying dictates what is passed as law.
IRS has plenty of fucking time to squash all the little bugs but refuses to take out the big boys that net a much more positive return. Carlin had it right when he said there's a big club and we ain't in it.
Wasn’t there a video or statement made by someone in the IRS that basically says they are not given the budget to go after the big boys and it’s much easier/cheaper to go after the rest because they won’t fight back? The system was made to be completely rigged against us lol
It absolutely pisses me off that this is projected to raise less than $1 billion a year. A dumb amount of money for extra tax confusion for tens of thousands of sellers and millions of regular third party app users.
The IRS gets defunded on purpose so they don't have the resources to do so by politicians who are doing the bidding of their donors who want to pay less taxes. Donating to politicians is the best return on investment there is in the USA.
The problem is this country continually votes against the interest of the little guys in order to save their corporate overlords. Biden wanted to beef up the IRS to go after the big boys to fund his infrastructure bills....one party is doing everything they can to prevent the IRS from doing their job.
It was such horse dren when they announced it. Trying to catch ghost millionaires. Give me a break, it's a way to tax working class more without actually raising the number.
Nope. If someone paypals you $1,000. PayPal will report it and you'll have to explain what it's for. If someone hands you $1000 in cash as a gift you can continue to not report it
I know this will be buried in the already close to 8000 comments, but this will REALLY fuck people who are on ACA (Obamacare). You have to estimate your income for the year which calculates how much of a healthcare subsidy you get. If you make enough selling random stuff and the payment is tracked, (ebay, etsy, Venmo, etc.), ACA is going to find out about it and you will have to pay back part or all of your subsidy for the entire year if you exceed the predicted income.
I know people like to joke about conspiracy theorists, but a cashless society is something to truly be concerned about. And this news just provides another reason why.
That's why they're working on digital currency. Entirely trackable and controllable, crypto that serves the government that owns the chain. It's gonna be bad.
$600 is such and embarrassingly low number. They're going after people's crafting money. Lawn mowing money. If it was $5000 that would seem fair. But $600? They're just going after poor people and it's disgusting.
you know. if these taxes actually went to something useful, i have a feeling people wouldn’t be as hesitant and against them. seeing your taxes work instead of constantly paying more and more for insurance, hear about how schools are all under funded, colleges get more and more expensive, the roads are never fixed, corporations get more record breaking income, infrastructure is maintained to the bare minimum. none of it feels good. it’s says 70% of taxes are paid to public services. then how come everyone is still struggling? obviously something isn’t working and stealing more money from people with side hustles isn’t going to fix anything
Former auditor. Wealthy get audited plenty but they hire accountants and lawyers to ensure things are done to code. I think this is way too low of a threshold but it’s targeting resellers not everyday folks
We gave the rich a $1.5T tax cut only to go after people's side hustles, which they need to pay the bills because groceries are now 40% more expensive.
I have stopped selling anything on eBay due to this. Not that I ran a business or anything. Just odds and ends if I decided to upgrade or change out something. It’s not worth the hassle to have to prove I didn’t make a profit. It’s FB marketplace and cash or CashApp.
I used to sell off random stuff rather than throw it away (usually components that weren't high-demand enough to sell/give away locally, but also useful to someone - think various laptop parts, television parts, etc.) After shipping and eBay's 15% of fucking, it amounted to something near nothing - I just hated throwing good stuff away, especially stuff that isn't too expensive but also hard to get other than secondhand. Now I can't do that at all, for fear of getting audited for "selling stuff". $10-20 in shipping fees easily per item, being counted as "income" (despite going right to USPS) means I can sell 30-60 things before the IRS starts demanding I pay the taxes on the "profit" (that went straight to a company).
You only have to pay tax on profit. So if you sell something for less than you bought it for, it's not taxable. But the problem might come up if you get asked to prove it...
This is gonna screw the little guys, that have had to resort to shady practices to survive. Maybe us tax payers are sick of subsidizing large corporate employers via SNAP benefits. Looking at you Walmart, Amazon, McDonalds and more. I’d be happy if the population knew how and where to report wage theft.
Absolutely disgusting. This is a regressive tax on small business. Fuck Congress for making this threshold so low. Hope the wealthy and Congress enjoy all that PPP loan money they stole and never paid back. Fucking criminals all the way down in those chambers.
Okay so $8.4 bn, divided by 87000 auditors, across 10 years, come out to just under $10,000 per year, per auditor. Would this not mean that the auditors are costing more that what they are recovering?
As a person who buys and sells a lot of music equipment for fun, and typically is selling for either a very modest profit or about what I paid for it, this is just super annoying.
You will only get the form if you use PayPal Goods and Services or Venmo Goods and Services. That is the appropriate selection if you are selling stuff or paying for a service. There is a fee involved in paying that way.
I’m giving you an award so hopefully this gets bumped to the top. A lot of people don’t realize this fact. PayPal had “friends and family” for a long time, Venmo added “business” accounts almost as a reaction to this new rule. If you have a personal Venmo account AND the sender doesn’t flag the transaction as a “goods and services” then none of your Venmo transactions are reported.
WTF?! I paid income tax on the money I used to buy consumer goods with sales tax; selling those now used and twice taxed items get taxed a third time?!?! GFYS
This isn't a new tax, this is expanding reporting for 1099-K which was already a thing. It's just reporting additional income which would go on your income tax. You should have already been paying this tax, but lots of people avoid it by using cash. PayPal and other processors have basically been a loophole to take non cash payments with the benefits of cash (e.g. Avoiding paying tax)
Yeah, that's how taxes have always worked, and it isn't "triple tax" its the first income tax for novel income from the sale of something. General rule of thumb is if you are exchanging an asset into money or vice versa, its taxable.
The US tax system is fucking absurd. We shouldn’t have to jump through hoops every year and play a bunch of paperwork games in order to not get fucked over by the IRS. We shouldn’t have to pay a professional to help us to pay the government.
Lobbying from the major tax filing companies ie TurboTax , Jackson Hewitt, and HR & Block is the reason for all of this bs. Every time the IRS supposedly tries to create their own website for free filing, the lobbying from these companies puts a stop to it. They love this new ridiculously low threshold, because they can charge more to file the return for people. It’s a win in their eyes.
Don’t lie to yourself and don’t think for a second that the new 87,000 IRS agents they plan on hiring won’t go after regular Americans. I don’t give a crap what any politician says - they will. It’s cheaper to go after regular income Americans than high income corporate stooges.
I’m normally pretty hippie liberal, but this is one of those areas where I agree with the Republicans - when you amp up tax code enforcement, they don’t start suddenly going after the wealthy, because the wealthy people lawyer up and fight back. So they go after the little guys - tips, small transactions, side jobs, etc. Because they know we can’t do shit.
Right? I've just completely stopped selling my old stuff on eBay and changed a lot of my buying habits. It's not worth the headache of tracking everything or the additional cost of having my CPA do it for me...
Every site I use to sell things has fucking outrageous fees. Etsy this year has been extra horrible. Ebay too. I get the most money from just straight local cash exchanges. I'm burnt out already from trying to manage online shops to begin with, then at least 30% of my profit goes to eBay or Etsy for their stupid ass fees. I'm running these shops cause I'm strapped for dough to begin with. Uncle Sam you can rot.
I buy things with income that I pay income tax on. I usually pay sales tax when I buy the items. Why, when I go to sell my personal goods, should I have to pay income tax again on transactions above $600 or totaling more than $600 when I've already been taxed twice? Plus, are fucking ebay and paypal netting out the fees they take on the funds they are reporting?
I mean, there are certainly bigger fish to fry, but this isn’t new. Payment for services, selling goods, etc., over $600 have required taxes as 1099 income for many years, payment services just weren’t previously prevalent. Payment services are the new cash under the table.
The questions I have about this relate to PayPal. For example, if I sold $600 online and received the payment through PayPal, am I going to get 2 forms (one from PayPal and another from the platform I used to sell) or just one? Because if you get 2, it can appear you made $1200 instead of $600. I've looked everywhere and have not found an answer.
You only get one! It’s going to depend on the website. If it’s something like FB marketplace where you are giving the buyer your PayPal info to send a payment, you’ll get it from PayPal. If it’s through a company like Etsy/eBay where the buyer pays directly on that site, you’ll get it from the platform.
Just Paypal will send you a form, but it doesn't actually matter what they send you, it's up to you to report your correct income to the IRS. You can completely ignore their forms as long as you correctly file with the IRS under miscellaneous income. They are basically just sending you a receipt for what they reported for their taxes.
Isn’t the new rule based on selling stuff for profit (resellers)? If you just sell stuff that you already owned you aren’t required to pay the tax? Genuinely curious
From what I gathered Zelle is exempt from this because it isn't a third party transaction service, it's messenger that facilitates a peer to peer transactions between bank accounts, you'd only have to report what you normally would for any business related wire transfer
What about the $10,000,000 net worth threshold which means you report all transactions into and out of the account? Oh that's right, we don't have one!!
That seems really annoying. The whole point of digital currency exchange is convenience. This is going to drive a lot of ppl away from those services and back to cash. No one is trying to spend countless hours getting in contact with vendors to correct their mistakes.
Yet another reason we cannot EVER allow them to force a cashless system on us. Use bills. Use coins. They Always seek to control the small person through the meager amounts we're 'allowed' to have.
This has been coming for a long time, because the higher threshold that these online payment processors had to report at before was allowing people to do account shuffling to avoid reporting larger amounts of income. Like, there's a guy I know who personally has been doing this before, and he has a whole slew of accounts under family and employee names, and he switches out the account that receives payment for his online store every time it got close to the reporting threshold.
Working class: We are drowning. Can we please get some help? Government: Best I can do is tax cuts for the wealthy, a nice healthy military spending package, oh, and I'll throw in some IRS audits at you to really round it out.
“Closing the tax gap” by going after $600 transactions on Venmo rather than closing the loopholes big businesses use to shirk their (already reduced) responsibilities. Nice. 👍
This is the type of nonsensical shit that assfucks regular people and loses democrats elections. Absolutely braindead, moronic bullshit. Whoever's ideas this is should be throw into a volcano.
The IRS doesn’t target wealthy individuals because many wealthy individuals keep tax lawyers on retainer. Those tax lawyer are usually very good at the job because they were once attorneys for the IRS. Enjoy the revolving door.
The IRS is already RIDICULOUSLY understaffed. What makes them think this is going to go in their favor. millionaires and above are going to get away with it anyways, and people that dont make nearly enough to get by are gonna get fucked.
I’m confused by the comments here… do people just… not declare the extra income they earn? And then bemoan when people who make more money than them do the same thing they do because… reasons?
This has been in the news since December of last year. The change in the reporting threshold is absurd and affects low income people the most and also adversely affects the environment. This is because many people sell used clothing online (particularly children's clothing) that might otherwise end up in landfills.
I sold my entire baseball card collection this year on Ebay. I got roughly $15,000 after fees and whatnot. Over the 30 years of collecting.....I'm guessing I spent upwards of $100,000 buying packs and boxes to get those cards I sold for $15,000. I WILL NOT pay tax on this "income". There WILL BE a way to work through this, so I'll figure it out!!
Please, please speak with a tax consultant so you understand the legal obligations and ways to show the initial costs and reflect the losses. 15k that is on a schedule 1099 but just absent from your taxes is pretty likely to result in an audit
Venmo specifically, in their FAQ, talks about the difference between friends & family transactions versus goods & services transactions. We’ll take the ticket scalper example. Did the other person mark goods & services? Venmo will generate. Did they send it friends & family? Venmo will not generate, and it’s up to you to report that income.
This is why I either gave away or traded things. Getting tagged for another 20-30% wasn’t worth it anymore. Gave up on eBay years ago, reverb too. Even marketplace this last year. Shame they can’t tax the rich like us.
It's kind of funny to me how arbitrarily low that threshold is. It's 2022, $600 isn't worth all that much anymore lol. What is their goal here, to squeeze just a bit more blood out of that stone?
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This is a bill trying to pass now to raise it from $600 to $5,000 - everyone should be contacting your reps to try and get this pushed through. It’s bullshit and we should all fight against it.
Ikr, my favorite part is the name. American rescue care act lol. Yeah, because some guy on ebay making 5k a year selling shit is what's crippling our economy. Try careless spending of our tax money and poor allocation and efficacy. But no, little Timmy sold his magic the gathering set for $625 better tax the fuck put of that to pay for government luncheons.
Politicians will never go after their biggest donors. They want to tax the middle class as much as possible
We can’t let the regular people know how no millionaire pays taxes.
They don’t want to investigate their friends
Going to be a total shitshow.
Exactly... Good luck proving that it was your friends helping split a bill or whatever instead of taxable income.
Serious question, I pay rent in full and my roommate Venmos me half every month. Is this going to affect me?
It's another straight up "tax and blame the poor people" tax. There's twenty billion a year more the wealthy should have been paying, and yet the government does this shit and claims the 8 billion total over the next like 6 years will fix everything.
Hear me out: what if we just also taxed the rich, the corporations, and the churches appropriately? Upwards of 70% marginal tax rate a la pre-Reagan era.
Good thing the IRS is going after the little guys instead of trying to tackle he Trump-esque levels of fuckery going on! One step closer to feudalism, can’t wait.
ELI5, is this really targeting low income gig workers or am I reading in to this too much?
This is more geared toward the online market place transactions than anywhere else. If you were a gig worker they were already hitting you with a 1099 at the end of the year anyways.
Most gig worker apps already auto issue 1099s. This mostly effects people who flip stuff on Ebay. Even then, there are multitudes of easy ways around this stuff as long as you aren't doing business volumes.
For example I have sold some stuff on Mercari. They told me if I sell over $600 a year I have to fill out a tax form. So I have intentionally stopped selling anything until 2023 because I'm pretty close to $600.
No, it seems like everyone neither read or understood it and are overreacting and pointing fingers.
There's no new tax obligation. Rather, a tax obligation which people were already supposed to pay just became slightly less convenient to dodge.
Billionaires hiding money all over the world, getting tax breaks, corporations paying zero tax, but yeah let’s go after the person who got paid $600 on venmo
Making a big deal over 600 bucks vs the millions and millions of dollars the rich make really makes no sense...they need to go after the rich who don't even pay their taxes, not ppl trying to get by.
The top 1% just had the most profitable couple of years in history, so obviously the best way to counter that, is squeezing the last two cents out of the little guy/girl trying to make a tiny bit extra. This is wrong on so many levels.
Good, what we need is to really crack down on people with so little money that $600 makes a difference. You know, the kind where the IRS will waste more money going after them than they'll get out of it. But as long as it hurts poor people. Great job, America.
Yeah, but those people with so little money that $600 makes a difference also don’t have the money to pay high priced lawyers that the rich do. So it’s probably easier for the IRS to bully on those that can’t pay for proper representation. Ya know, ‘murica.
Gotta squeeze the little man for every penny they have instead of making the rich pay their fair share.
It has always been in place, the difference is it’s making the 3rd parties to issue a W-9.
Damn the government really does hate the middle and lower class
They definitely love to find new ways to fuck with us. It’s unlikely that in the big scheme of things this will net them that much but the perception of control they have over us is what really gets them off
You say the government, but that’s really misleading. You should be pointing fingers at the wealthy class that influences government policy. Most people in government are there to do the right thing, but can’t because a small group of people through lobbying dictates what is passed as law.
IRS has plenty of fucking time to squash all the little bugs but refuses to take out the big boys that net a much more positive return. Carlin had it right when he said there's a big club and we ain't in it.
Carlin was right about a lot of things.
Wasn’t there a video or statement made by someone in the IRS that basically says they are not given the budget to go after the big boys and it’s much easier/cheaper to go after the rest because they won’t fight back? The system was made to be completely rigged against us lol
For sure, “like find ways to squeeze regular ppl by looking at venmo, but lets ignore all the offshore tax evasion by the wealthy”
Just to be clear, it was Congress that did this rule change. Not the IRS.
The big boys fight back.
It absolutely pisses me off that this is projected to raise less than $1 billion a year. A dumb amount of money for extra tax confusion for tens of thousands of sellers and millions of regular third party app users.
The IRS gets defunded on purpose so they don't have the resources to do so by politicians who are doing the bidding of their donors who want to pay less taxes. Donating to politicians is the best return on investment there is in the USA.
This is a change that was brought on by a change in tax law...not the IRS.
Me and you=🔬. Every other rich mfkr paying 0% tax=👩🏻🦯
The problem is this country continually votes against the interest of the little guys in order to save their corporate overlords. Biden wanted to beef up the IRS to go after the big boys to fund his infrastructure bills....one party is doing everything they can to prevent the IRS from doing their job.
That’s because the IRS was defunded. On purpose. By republicans.
….Thus making further excavations to accommodate a larger Underground Economy.”
Back to paying cash
It was such horse dren when they announced it. Trying to catch ghost millionaires. Give me a break, it's a way to tax working class more without actually raising the number.
Nope. If someone paypals you $1,000. PayPal will report it and you'll have to explain what it's for. If someone hands you $1000 in cash as a gift you can continue to not report it
Many season ticket holders reselling their NFL or other sports tickets for more than FV on the ticketmaster exchanges will get hit by this.
I know this will be buried in the already close to 8000 comments, but this will REALLY fuck people who are on ACA (Obamacare). You have to estimate your income for the year which calculates how much of a healthcare subsidy you get. If you make enough selling random stuff and the payment is tracked, (ebay, etsy, Venmo, etc.), ACA is going to find out about it and you will have to pay back part or all of your subsidy for the entire year if you exceed the predicted income.
Fuck the 99% but turn a blind eye to the 1%
Let me tell you about my little friend, "Cash".
Suddenly, I understand my grandma and her shoe boxes of cash stashed all over the house.
I know people like to joke about conspiracy theorists, but a cashless society is something to truly be concerned about. And this news just provides another reason why.
Keep your cash as cash and your credit as credit. If the wanted to audit you, they should forget it.
That's why they're working on digital currency. Entirely trackable and controllable, crypto that serves the government that owns the chain. It's gonna be bad.
You mean the thing they are actively phasing out while everyone sits and watches?
$600 is such and embarrassingly low number. They're going after people's crafting money. Lawn mowing money. If it was $5000 that would seem fair. But $600? They're just going after poor people and it's disgusting.
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you know. if these taxes actually went to something useful, i have a feeling people wouldn’t be as hesitant and against them. seeing your taxes work instead of constantly paying more and more for insurance, hear about how schools are all under funded, colleges get more and more expensive, the roads are never fixed, corporations get more record breaking income, infrastructure is maintained to the bare minimum. none of it feels good. it’s says 70% of taxes are paid to public services. then how come everyone is still struggling? obviously something isn’t working and stealing more money from people with side hustles isn’t going to fix anything
I love this cracking down on the poor while the rich never get audited.
At this point, fuck it. Instill a 50% income tax on anybody making less than 100k a year. Because why not.
The rich get audited.
Former auditor. Wealthy get audited plenty but they hire accountants and lawyers to ensure things are done to code. I think this is way too low of a threshold but it’s targeting resellers not everyday folks
can't seem to tax the billionaire class a dime, but when it comes to side gigs for the working poor, congress gets busy.
We gave the rich a $1.5T tax cut only to go after people's side hustles, which they need to pay the bills because groceries are now 40% more expensive.
I have stopped selling anything on eBay due to this. Not that I ran a business or anything. Just odds and ends if I decided to upgrade or change out something. It’s not worth the hassle to have to prove I didn’t make a profit. It’s FB marketplace and cash or CashApp.
And for marketplace, delete the listing and tell them no, you didn't sell the piece.
Will cashapp not send the same 1099-k? I’m not familiar with it.
I used to sell off random stuff rather than throw it away (usually components that weren't high-demand enough to sell/give away locally, but also useful to someone - think various laptop parts, television parts, etc.) After shipping and eBay's 15% of fucking, it amounted to something near nothing - I just hated throwing good stuff away, especially stuff that isn't too expensive but also hard to get other than secondhand. Now I can't do that at all, for fear of getting audited for "selling stuff". $10-20 in shipping fees easily per item, being counted as "income" (despite going right to USPS) means I can sell 30-60 things before the IRS starts demanding I pay the taxes on the "profit" (that went straight to a company).
You only have to pay tax on profit. So if you sell something for less than you bought it for, it's not taxable. But the problem might come up if you get asked to prove it...
This is gonna screw the little guys, that have had to resort to shady practices to survive. Maybe us tax payers are sick of subsidizing large corporate employers via SNAP benefits. Looking at you Walmart, Amazon, McDonalds and more. I’d be happy if the population knew how and where to report wage theft.
Not only do we subsidize large corporations, but we pay private companies to administer those subsidies.
here you go;
Wage theft is by far the biggest chunk of all theft in the nation every year:
Absolutely disgusting. This is a regressive tax on small business. Fuck Congress for making this threshold so low. Hope the wealthy and Congress enjoy all that PPP loan money they stole and never paid back. Fucking criminals all the way down in those chambers.
The Biden administration wanted it:
Not even just small business. This is some bullshit for people that just want to sell their yard sale items online
The tax already exists, this just changes how it's reported to the IRS.
These are taxes small businesses were already obligated to pay. You're saying "how dare they not allow tax evasion"
Lower class warfare. Never mind billionaires dodging taxes with LLC's, Shell companies, off shore accounts, let's attack the proletariat.
Yes Alex, I'll take, "Misguided attempts at tax reform for $600," please.
Sorry, gonna have to report that if you get it right
This is absolutely intentional.
This is going to cause so much economic activity to revert to cash and destroy a major part of the cashless app business model.
Can't wait to get audited.. What are all these payments for? Splitting drugs.
Back to writing personal checks
Cut taxes on billionaires but now chase after joe six pack for 600 dollars.
There was no tax cuts for billionaires in the bill. You're thinking of the tax cuts passed by Republicans and Trump back in 2017.
For taxes on $600. Not even the full $600. I guess thats why they need all those IRS agents.
$8.4 billion over ten years? Aka ~1% of a single year's worth of military budget? Yeah... This will make a huge difference...
Okay so $8.4 bn, divided by 87000 auditors, across 10 years, come out to just under $10,000 per year, per auditor. Would this not mean that the auditors are costing more that what they are recovering?
As a person who buys and sells a lot of music equipment for fun, and typically is selling for either a very modest profit or about what I paid for it, this is just super annoying.
Best part of the article right here:
Get fuked IRS, tax the rich and quit picking on the poor.
Oh look a tax measure that disproportionately impacts the working class... Color me surprised.
You will only get the form if you use PayPal Goods and Services or Venmo Goods and Services. That is the appropriate selection if you are selling stuff or paying for a service. There is a fee involved in paying that way.
I’m giving you an award so hopefully this gets bumped to the top. A lot of people don’t realize this fact. PayPal had “friends and family” for a long time, Venmo added “business” accounts almost as a reaction to this new rule. If you have a personal Venmo account AND the sender doesn’t flag the transaction as a “goods and services” then none of your Venmo transactions are reported.
WTF?! I paid income tax on the money I used to buy consumer goods with sales tax; selling those now used and twice taxed items get taxed a third time?!?! GFYS
Only if you sell for more than you bought.
If you sell an item for less than you paid then you have not made taxable profit.
This isn't a new tax, this is expanding reporting for 1099-K which was already a thing. It's just reporting additional income which would go on your income tax. You should have already been paying this tax, but lots of people avoid it by using cash. PayPal and other processors have basically been a loophole to take non cash payments with the benefits of cash (e.g. Avoiding paying tax)
If you sell something for less than you paid for it, you won't have to pay tax. It's in the article.
It’s not a new tax. It’s just requiring these electronic payment companies to report transactions similar to a bank or investment broker would.
Well, yes. All income is taxable. If you buy a car, you pay a tax, and if you resell it, you pay another tax.
Yeah, that's how taxes have always worked, and it isn't "triple tax" its the first income tax for novel income from the sale of something. General rule of thumb is if you are exchanging an asset into money or vice versa, its taxable.
"If the company doesn’t fix the error, you can attach an explanation to your tax return while reporting your income correctly, the IRS says."
It's a class war not a culture war
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This should be at the top. Article is straight hysteria without this explanation.
The US tax system is fucking absurd. We shouldn’t have to jump through hoops every year and play a bunch of paperwork games in order to not get fucked over by the IRS. We shouldn’t have to pay a professional to help us to pay the government.
Lobbying from the major tax filing companies ie TurboTax , Jackson Hewitt, and HR & Block is the reason for all of this bs. Every time the IRS supposedly tries to create their own website for free filing, the lobbying from these companies puts a stop to it. They love this new ridiculously low threshold, because they can charge more to file the return for people. It’s a win in their eyes.
american rescue plan? rescue them from what nearly 30% of the under $20k they could be burdened with yearly?
Welp, back to cash only it is then.
Don’t lie to yourself and don’t think for a second that the new 87,000 IRS agents they plan on hiring won’t go after regular Americans. I don’t give a crap what any politician says - they will. It’s cheaper to go after regular income Americans than high income corporate stooges.
Crush the little guys for a few bucks, but let the billionaires payoff the lawmakers and save billions.
I’m normally pretty hippie liberal, but this is one of those areas where I agree with the Republicans - when you amp up tax code enforcement, they don’t start suddenly going after the wealthy, because the wealthy people lawyer up and fight back. So they go after the little guys - tips, small transactions, side jobs, etc. Because they know we can’t do shit.
Right? I've just completely stopped selling my old stuff on eBay and changed a lot of my buying habits. It's not worth the headache of tracking everything or the additional cost of having my CPA do it for me...
IRS can eat a bag of dicks
Every site I use to sell things has fucking outrageous fees. Etsy this year has been extra horrible. Ebay too. I get the most money from just straight local cash exchanges. I'm burnt out already from trying to manage online shops to begin with, then at least 30% of my profit goes to eBay or Etsy for their stupid ass fees. I'm running these shops cause I'm strapped for dough to begin with. Uncle Sam you can rot.
Looks like the era of using cash for these kinds of things is going to make a comeback.
And they're making an absolute mess of it.
The Ebay subreddits are equally in arms over this.
How was this aimed at slashing the ‘wealth gap’ as the article implies? This will clearly hurt lower income earners more??
Pieces of shit trying to keep the poor down and don't even blink an eye to the millionaires and companies not paying shit for taxes.
I buy things with income that I pay income tax on. I usually pay sales tax when I buy the items. Why, when I go to sell my personal goods, should I have to pay income tax again on transactions above $600 or totaling more than $600 when I've already been taxed twice? Plus, are fucking ebay and paypal netting out the fees they take on the funds they are reporting?
I mean, there are certainly bigger fish to fry, but this isn’t new. Payment for services, selling goods, etc., over $600 have required taxes as 1099 income for many years, payment services just weren’t previously prevalent. Payment services are the new cash under the table.
Meanwhile people can tax evade a billion dollars for 20 years and never even get a side glance.
God forbid you make any money that Uncle Sam can’t get his cut from. Fucking ridiculous.
Unless you're rich, and then they don't give a shit about your money.
The questions I have about this relate to PayPal. For example, if I sold $600 online and received the payment through PayPal, am I going to get 2 forms (one from PayPal and another from the platform I used to sell) or just one? Because if you get 2, it can appear you made $1200 instead of $600. I've looked everywhere and have not found an answer.
You only get one! It’s going to depend on the website. If it’s something like FB marketplace where you are giving the buyer your PayPal info to send a payment, you’ll get it from PayPal. If it’s through a company like Etsy/eBay where the buyer pays directly on that site, you’ll get it from the platform.
Just Paypal will send you a form, but it doesn't actually matter what they send you, it's up to you to report your correct income to the IRS. You can completely ignore their forms as long as you correctly file with the IRS under miscellaneous income. They are basically just sending you a receipt for what they reported for their taxes.
Isn’t the new rule based on selling stuff for profit (resellers)? If you just sell stuff that you already owned you aren’t required to pay the tax? Genuinely curious
How will you prove you didn’t turn a profit on it tho?
Funny that Zelle states that nothing is reported to IRS and that you’re responsible for tracking it.
From what I gathered Zelle is exempt from this because it isn't a third party transaction service, it's messenger that facilitates a peer to peer transactions between bank accounts, you'd only have to report what you normally would for any business related wire transfer
They really are trying to stomp out the middle class.
Nah, they want to stomp all non wealthy into a paste.
On the bright side this should scare off a lot of scalpers and flippers.
There is something to say for cash again I guess
Yellen has been trying hard to pass it since 2020
All those SnapChat Premium girls about to pay some taxes!
This has been in place already
Thank you. Everybody acting like this is new 🤣
Rich people: we really want to pay our fair share
What about the $10,000,000 net worth threshold which means you report all transactions into and out of the account? Oh that's right, we don't have one!!
It'd be cool if the IRS went after the big fish for a change, ya know?
That seems really annoying. The whole point of digital currency exchange is convenience. This is going to drive a lot of ppl away from those services and back to cash. No one is trying to spend countless hours getting in contact with vendors to correct their mistakes.
Yet another reason we cannot EVER allow them to force a cashless system on us. Use bills. Use coins. They Always seek to control the small person through the meager amounts we're 'allowed' to have.
This has been coming for a long time, because the higher threshold that these online payment processors had to report at before was allowing people to do account shuffling to avoid reporting larger amounts of income. Like, there's a guy I know who personally has been doing this before, and he has a whole slew of accounts under family and employee names, and he switches out the account that receives payment for his online store every time it got close to the reporting threshold.
Working class: We are drowning. Can we please get some help? Government: Best I can do is tax cuts for the wealthy, a nice healthy military spending package, oh, and I'll throw in some IRS audits at you to really round it out.
Such an absurdly low threshold.
Don't worry. It won't harm corporations, just normal people
“Closing the tax gap” by going after $600 transactions on Venmo rather than closing the loopholes big businesses use to shirk their (already reduced) responsibilities. Nice. 👍
Well. Time to go back to paying your friends in all cash.
how does this affect people using Venmo to pay their half of rent? Like a roommate sending $1200 in rent every month?
It doesn't. People who are not taking in goods and services payments but are friend and family type payments aren't going to be reported
Question: for apps like Venmo, isn’t this tax only going to apply to transactions that are labeled as purchases? Isn’t that why they added the option?
Good thing they're hiring all those new irs agents
This is the type of nonsensical shit that assfucks regular people and loses democrats elections. Absolutely braindead, moronic bullshit. Whoever's ideas this is should be throw into a volcano.
More rules to go after the working classes money. Go big government!
Something something taxation without representation.
This is why we should keep a cash society
People really mad that they have to report their income
The IRS doesn’t target wealthy individuals because many wealthy individuals keep tax lawyers on retainer. Those tax lawyer are usually very good at the job because they were once attorneys for the IRS. Enjoy the revolving door.
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Yet let’s Elon and trump and bezos pay no taxes… thanks makes sense.
The IRS is already RIDICULOUSLY understaffed. What makes them think this is going to go in their favor. millionaires and above are going to get away with it anyways, and people that dont make nearly enough to get by are gonna get fucked.
I’m confused by the comments here… do people just… not declare the extra income they earn? And then bemoan when people who make more money than them do the same thing they do because… reasons?
Yes basically. Tax fraud is very common.
Never fails the 1% pass it around like its monopoly money but when the bottom 98% do it they can go to prison for fraud. Sad but typical.
This has been in the news since December of last year. The change in the reporting threshold is absurd and affects low income people the most and also adversely affects the environment. This is because many people sell used clothing online (particularly children's clothing) that might otherwise end up in landfills.
I sold my entire baseball card collection this year on Ebay. I got roughly $15,000 after fees and whatnot. Over the 30 years of collecting.....I'm guessing I spent upwards of $100,000 buying packs and boxes to get those cards I sold for $15,000. I WILL NOT pay tax on this "income". There WILL BE a way to work through this, so I'll figure it out!!
Please, please speak with a tax consultant so you understand the legal obligations and ways to show the initial costs and reflect the losses. 15k that is on a schedule 1099 but just absent from your taxes is pretty likely to result in an audit
You answered your own question. You made 0 profit therefore you are taxed on 0 of it.
You would have received one before this year anyway probably.
Venmo specifically, in their FAQ, talks about the difference between friends & family transactions versus goods & services transactions. We’ll take the ticket scalper example. Did the other person mark goods & services? Venmo will generate. Did they send it friends & family? Venmo will not generate, and it’s up to you to report that income.
Remember when the 80,000 new irs agents were “going to go after the rich who don’t pay?” Who would’ve thought, they aren’t and never will.
This definitely seems like it goes after the little guy.
This is why I either gave away or traded things. Getting tagged for another 20-30% wasn’t worth it anymore. Gave up on eBay years ago, reverb too. Even marketplace this last year. Shame they can’t tax the rich like us.
Should be a fun time for anyone running a Super Bowl pool through Venmo or Zelle.
Is it 600$ per transaction or accumulation to a total of 600$ annually?
The second one. A single transaction of $600 will result in you getting a 1099-k but so will six $100 transactions.
I'm sure the rich are being asked to pay their fair share of taxes too, not just us poors... amiright! Amiright?!
I sold tickets through StubHub and they email me constantly to update my account with my SSN so they can report it to the IRS. Eat a dick
That's why they wanna get rid of cash
Damn why dont they go after millionaires and billionaires like this. Little people making little money and they’re headhunting.
IRS says we will audit millions of real americans to protect a few tax dodgers who have millions.
This will likely make VRBO, AirBnB, and ebay (& others) to change their business model.
eBay unlikely
It's kind of funny to me how arbitrarily low that threshold is. It's 2022, $600 isn't worth all that much anymore lol. What is their goal here, to squeeze just a bit more blood out of that stone?
If you are selling your personal items, chances are you are taking a “loss” so you DO NOT have to pay taxes on that.