Bad Paypal 1099

[sharp_edge]

For me it's all about the hassle. Selling and shipping is enough of a hassle on it's own without having to keep track of receipts and do extra work when filing taxes. It really sucks the fun out of things. It will likely impact my potential buying too.

I don't think we are just a blind spot either. The government wants to collect money on ALL income or they wouldn't have set the threshold so low. They don't care how much extra work it is for you to report it correctly or for someone else to enforce it because you're paying for that too.

Exactly my thinking.

 

[PeteyTwoPointOne]

Although it's not 100% solely their fault, I'm hoping RaidPal, Venless, AppleTrash, et. al. get kicked in the balls so hard from lost revenue this year that they hire an army of high dollar hot-shot lobbyists to repeal this new law...talk about yer repressive economic tax policy!

 

[Danke42]

1789 - Nothing is certain except death and taxes
2022 - Ditto

 

[Gastonknife]

Although it's not 100% solely their fault, I'm hoping RaidPal, Venless, AppleTrash, et. al. get kicked in the balls so hard from lost revenue this year that they hire an army of high dollar hot-shot lobbyists to repeal this new law...talk about yer repressive economic tax policy!

Let's not forget that we can also exercise how we vote. If you do not like this new law, remember who came up with it.

 

[Heirphoto]

Could you post links to those Toutube CPA/ebay seller videos you mentioned before, please. Thanks

The content creator is Not Your Dad's CPA on Youtube. He is a CPA and an eBay reseller. Don't want to post the link itself as I am not 100% sure he is correct but all of his videos deal with things we all face as 'resellers".

 

[crbnSteeladdict]

The content creator is Not Your Dad's CPA on Youtube. He is a CPA and an eBay reseller. Don't want to post the link itself as I am not 100% sure he is correct but all of his videos deal with things we all face as 'resellers".

Thanks for sharing the info, I really appreciate it.

 

[Random Dan]

According to CNBC it sounds like we need not worry

No, the IRS isn’t taxing your Venmo transactions

The IRS is not requiring individuals to report or pay taxes on mobile payment app transactions over $600. The change applies to commercial transactions.

www.cnbc.com

 

[Gastonknife]

According to CNBC it sounds like we need not worry

No, the IRS isn’t taxing your Venmo transactions

The IRS is not requiring individuals to report or pay taxes on mobile payment app transactions over $600. The change applies to commercial transactions.

www.cnbc.com

I believe you are misreading it - We need to worry. Goods and services falls into this.

The article you note is focusing on Friends/Family type payments.

 

[Random Dan]

I believe you are misreading it - We need to worry. Goods and services falls into this.

The article you note is focusing on Friends/Family type payments.

The article doesn't mention the distinction between GS and FF paypal options.

When they say "commercial payments" does that mean GS you think? I wouldn't have thought reselling things as commercial but maybe that is what they mean.

 

[Blues]

Commercial involves buying / selling.

F&F involves sending money to someone you know...and is not buying / selling (commerce). (In theory.)

 

[Random Dan]

Ok so for paypal they could say GS = commercial, FF = noncommercial, but what about the other services that don't make the distinction? If I split rent with someone using venmo or zelle, how does the IRS know those aren't business transactions?

 

[sharp_edge]

If anything, that CNBC article tells that we SHOULD worry about being hit by IRS for using PayPal G&S, Zelle, etc.

 

[Docscoot]

We need a blade forums parking lot swap meet 5 times a year. We can trade knives and barter with roasted coffee beans. This impeding 1099 for cumulative sales over $600 is really irritating.

Love this idea, I’m in!!

 

[Peter Hartwig]

Love this idea, I’m in!!

I think we already have it-called the trading forum-the virtual swap meet . I have never been a big fan of trading, but this situation certainly doesn't hurt it's merits.

 

[Random Dan]

This article states explicitly that personal items sold at a loss do not qualify.

Unless you have a side hustle, your Venmo and Paypal transactions probably won't be taxed

The new reporting requirement only applies to business transactions totaling over $600.

www.cnet.com

If you sell personal items for less than you paid for them and collect money via third-party payment apps, this new legislation won't affect you. For example, if you buy a couch for your home for $500 and later sell it on Facebook Marketplace for $200, you won't owe taxes on the sale

I'm still not sure what we're supposed to do when filing though.

 

[3D Anvil]

If they want to play this game, then fine. If you sell more than a few items a year, set up a sole proprietorship for tax purposes. Keep records of your costs for the items you may sell. Since most of these types of sales result in a loss, your "business" will report a net loss, which you can deduct from your ordinary income.*

* I am not a tax attorney and this is not legal advice.

 

[PeteyTwoPointOne]

This article states explicitly that personal items sold at a loss do not qualify.

Unless you have a side hustle, your Venmo and Paypal transactions probably won't be taxed

The new reporting requirement only applies to business transactions totaling over $600.

www.cnet.com

I'm still not sure what we're supposed to do when filing though.

Yup, and herein lies the issue, imho...a bunch of damn extra paper shuffling on our behalf that only serves to justify some new-hire bureaucratic bean counter's existence.

This bean counter will undoubtedly have some sort of quota of un/under-reported tax they will be burdened with "recovering" and will nit pick and curry comb your records <regardless of your preferred filing methodology> until they find it.

At that point, the Herculean burden to prove/disprove will be on your shoulders, and it's then that you'll cave in, give up, and pay up to avoid penalty and interest and just to get them outta your life.

 

[3D Anvil]

Yup, and herein lies the issue, imho...a bunch of damn extra paper shuffling on our behalf that only serves to justify some new-hire bureaucratic bean counter's existence.

This bean counter will undoubtedly have some sort of quota of un/under-reported tax they will be burdened with "recovering" and will nit pick and curry comb your records <regardless of your preferred filing methodology> until they find it.

At that point, the Herculean burden to prove/disprove will be on your shoulders, and it's then that you'll cave in, give up, and pay up to avoid penalty and interest and just to get them outta your life.

I seriously doubt they will bother with these small sales. The IRS is already massively understaffed and only about 0.3% of returns are audited. I would bet that most returns falling in that .3% range involve 7-figure and above incomes.

 

[Docscoot]

I seriously doubt they will bother with these small sales. The IRS is already massively understaffed and only about 0.3% of returns are audited. I would bet that most returns falling in that .3% range involve 7-figure and above incomes.

I generally agree with this. But just for a scary contrary datapoint, the one time I was audited was a year as a student when my income was well below the poverty line. I think there’s some number of audits, maybe rare but they exist, that really are just random bad luck.

 

[Gastonknife]

The problem here is the 1099. The IRS will get that from PayPal as an example. They are not going to ignore those. Additionally they plan to hire more staff. Then the burden of proof receipts etc falls on you. They are not going to take your word for it. Finally, why do you think they made the threshold such a nominal amount ....$600????