IRS warns taxpayers about new $600 threshold for third-party payment reporting

  1. 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.

  2. 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.

  3. Politicians will never go after their biggest donors. They want to tax the middle class as much as possible

  4. Exactly... Good luck proving that it was your friends helping split a bill or whatever instead of taxable income.

  5. Serious question, I pay rent in full and my roommate Venmos me half every month. Is this going to affect me?

  6. 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.

  7. 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.

  8. 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.

  9. 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.

  10. 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.

  11. 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.

  12. No, it seems like everyone neither read or understood it and are overreacting and pointing fingers.

  13. 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

  14. 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.

  15. 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.

  16. 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.

  17. 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.

  18. 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

  19. 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.

  20. 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.

  21. 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

  22. For sure, “like find ways to squeeze regular ppl by looking at venmo, but lets ignore all the offshore tax evasion by the wealthy”

  23. 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.

  24. 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.

  25. 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.

  26. 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.

  27. 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

  28. Many season ticket holders reselling their NFL or other sports tickets for more than FV on the ticketmaster exchanges will get hit by this.

  29. 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.

  30. 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.

  31. 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.

  32. $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.

  33. 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

  34. 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

  35. can't seem to tax the billionaire class a dime, but when it comes to side gigs for the working poor, congress gets busy.

  36. 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.

  37. 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.

  38. 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).

  39. 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...

  40. 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.

  41. 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.

  42. Not even just small business. This is some bullshit for people that just want to sell their yard sale items online

  43. These are taxes small businesses were already obligated to pay. You're saying "how dare they not allow tax evasion"

  44. Lower class warfare. Never mind billionaires dodging taxes with LLC's, Shell companies, off shore accounts, let's attack the proletariat.

  45. This is going to cause so much economic activity to revert to cash and destroy a major part of the cashless app business model.

  46. 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.

  47. 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?

  48. 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.

  49. 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.

  50. 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.

  51. 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

  52. 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)

  53. 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.

  54. 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.

  55. "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."

  56. 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.

  57. 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.

  58. 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.

  59. Crush the little guys for a few bucks, but let the billionaires payoff the lawmakers and save billions.

  60. 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.

  61. 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...

  62. 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.

  63. How was this aimed at slashing the ‘wealth gap’ as the article implies? This will clearly hurt lower income earners more??

  64. 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.

  65. 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?

  66. 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.

  67. Meanwhile people can tax evade a billion dollars for 20 years and never even get a side glance.

  68. 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.

  69. 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.

  70. 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.

  71. 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

  72. 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

  73. 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!!

  74. 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.

  75. 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.

  76. 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.

  77. 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.

  78. “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. 👍

  79. how does this affect people using Venmo to pay their half of rent? Like a roommate sending $1200 in rent every month?

  80. 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

  81. 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?

  82. 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.

  83. 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.

  84. 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.

  85. 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?

  86. 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.

  87. 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.

  88. 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!!

  89. 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

  90. 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.

  91. 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.

  92. 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.

  93. 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

  94. Damn why dont they go after millionaires and billionaires like this. Little people making little money and they’re headhunting.

  95. 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?

  96. If you are selling your personal items, chances are you are taking a “loss” so you DO NOT have to pay taxes on that.

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