Posted on 12/06/2022 4:48:00 PM PST by Carriage Hill
Different data and regulations. Previously these platforms only reported large transaction players - businesses that likely reported the income anyway. But you could sneak by with $15k a year on PayPal without getting flagged. Now, you get a 1099 report and have to declare it - likely without having a clue what your cost basis was.
It’s actually very poorly thought out for many reasons since it isn’t necessarily a lot of money. Maybe you sold some old jeans or split dinner etc and over the course of the year it’s $1000. Nobody is thinking about keeping receipts for $60 in gas money to take a friend to the airport. And nobody really wants to have to keep a set of books for everything they do in life. Going to cause a lot of grief and pushback, and maybe that will be enough to change the regulations again.
They don’t realize they are going to be creating lots of nice fresh Republicans.
Actually, you can give up to $12,060,000 without any tax. However, if you give more than $17K, you have to file Form 706, and the amount over $17K reduces your lifetime exemption.
Theproblem is you sell an item for $700.00 that you paid $400.00 for you are still paying taxes on the whole $700.00 not just the $300.00 profit.
“And I still have no problem with people being audited for their income that they unreported. Everyone should be reporting their income, honestly and completely, let’s all play fair.”
Are you really naive enough to believe the IRS, DOJ and FBI are fair players? This is all so they can target certain people for political reasons and a few tax fraudsters.
So I give someone a grand, and he’s obliged to pay tax on that again?
= = =
I think you can gift someone about $14K with no tax liability on their end. Each year. That number may go up.
No Venmo or similar,
No Banking on my phone,
No Twitter, FB, Instagram, or similar
And I don't even login to FR on my phone, just read.
You don’t have to have receipts. If you put down an amount that seems reasonable, the IRS is very unlikely to question it. They have no idea when you bought it or what you actually paid for it originally - you are self-reporting. They are not going to waste time auditing small transactions.
Or you sell a used item for $700 that you paid $1700 for, but do not have the receipt.
It is a loss. But appears like $700 income.
Thank goodness the federal government came to the rescue. I feel so safe now.
Can I still do this on a short form (EZ)?
Thomas Massie:
“Regrettably, some of my congressional colleagues are more concerned about tracking that $600 Venmo payment you made than tracking $60,000,000,000 of your money they sent to Ukraine.”
No, that’s not correct.
They report the total amount of transaction. You file the net. If you get audited they will ask for documentation about the transaction. If your cost basis was $400, then your exposure is $300 less and “selling expenses.”
This is no different than how a broker reports stock sales.
The fact you have to report it at all is a hassle. So you can go out with friends and split the check six times a year, but next April have to declare half of it as a reimbursable expense. Sure, not a lot of work and maybe it won’t get audited at all, but just more regulatory paperwork BS people have to deal with.
But hey that’s just me. I still am annoyed off that I have to put a darn sticker on my car license plate every year. They have the technology to know whether I paid the registration or not. And I hate doing that, too! :-)
People think this is bad…wait until the fedcoin comes into play.
It has already started. I just got an email saying my quickbooks tax id # did not match with the IRS records. For the last 6.5 years I have had a sole proprietorship LLC and as such it is a disregarded entity. My TIN cross references to my SS#. Not a problem for the last 6.5 years. Now all of a sudden a “warning” notification from Intuit (not phishing)
Also if you use Vemmo, Zelle, etc to collect REFUNDABLE deposits such as a security deposit and refund some of that, the IRS doesn’t see the refund...just the “income.” Some naive landlords suggest that “ When you get audited explain to the nice IRS agent that it is a refundable deposit and that is why you didn’t claim it as income.”
Ummm yeah right. With those 87K armed new agents gunning (literally) for conservative small biz owners and landlords, I’ll just add an expense line for “return of sec dep.”
Unless you are MAGA. Then we will see just how “reasonable” Obama 2.0 weaponized IRS will be.
I don’t think they lowered the rate, they’re just now going to start checking. And I still have no problem with people being audited for their income that they unreported. Everyone should be reporting their income, honestly and completely, let’s all play fair.
All this crap does is reduce reported income.
I used to do tax returns for a small carpenter and he reported his income with good records. Then they started the first go around of 1099’s. You had to file a 1099 if you paid him as part of your business, but if you paid him to work on your personal house you didn’t. After that I only saw his 1099’s for income and none of the other.
This stuff just drives income to the point of avoiding reporting and only showing what the govt knows about.
MORE income goes underground.
I say this because so many innocent people are going to be caught up in this, just you wait. With 87,000 more IRS agents they are going to come knocking on your door soon...
The govt thinks it is no big deal, just computers moving electrons.
But this is another straw on top of so many other regulations straws it has us pinned to the ground with all the weight of straws.
Because it hits regular people in the wallet I think this overreach may piss enough people off that it gets revised.
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