new 1099-K rules

[parkplace33]

No tax law change, you will just be getting another piece of paper now.

If folks are concerned with tax implications, recommend you talk to a financial advisor that can help you.

[BobC]

Originally Posted by parkplace33

No tax law change, you will just be getting another piece of paper now.

If folks are concerned with tax implications, recommend you talk to a financial advisor that can help you.

No, not a financial advisor, you want a tax professional. One of my clients for years was a financial advisor AND a CPA to boot, and he knew better than to even try doing his own taxes.

You want to talk to/with someone that has been doing taxes for a while, and not just someone that has a title or degree that sounds like they might know what they are doing. And I don't heartily recommend the walk-in places that are always advertising on radio and TV, and have offices everywhere. There's a reason those people work there and not in a regular tax/accounting/CPA office. They're not all bad, but you never know who you'll get when you just walk in there, and they aren't all that cheap either. They usually charge you on what I call an ala carte basis. They basically charge you for every separate form they fill out, and every piece of paper and tax document they touch.

If you're looking around and start talking to somebody, and they sound a lot like me, you're probably headed in the right direction. LOL

[chriskim]

Saw this on FB.. of course, it could be fake news...


A friendly reminder that starting 2022, you’ll be taxed on your cashapp, Venmo, PayPal and Zelle for any transactions totaling up to over $600. That is one $600 or six hundred $1 transactions. So if you have a side hustle…… don’t use those apps. You're probably wondering why I encourage you to move to cash. If I purchase A tv for $700 in January of 2022 and decided to sell it on November of 2022 for $600 through one of those apps, I will be paying taxes for the $700 when I bought it and I’ll get a 1099K from the IRS on 2023 to pay taxes on the $600 I made off the tv I sold. If that does not sound ridiculous then I don’t know what to tell you. If I can’t write off my taxes for the Tv on the initial purchase, I should not have to pay taxes again on it for selling it. But the government has your best interest at hand. Tax the rich right?!? Good luck on your side hustle for all my friends that have it. Instead of “taxing the rich” they are really taxing the middle class more. But hey…. The government is for the people. I’m sure they just want to make sure you do your finances correctly. Tax the taxes to tax the tax. Got it . Of course if you are well off, you wont care but if you care about your friends that are not well off and their side hustle is what puts food on their table, then maybe you should care.#LGBFJB ~reposted from another post~

[Johnny630]

I see a lot on this board from people who say they just love the cards and could care less about the value of the cards most claim they would never sell they’re just going to die with them and pass them on to their heirs. Sounds like none of this would be applicable If you never sell any of your cards.

Why is everyone so worked up over this ? I think it’s smart for the IRS to be more diligent over collecting revenues from cards sales, there must be way more selling them ever. Maybe this is what the supposed FBI investigation over alleged trimming and shilling revealed lol. Make them pay up or at least put the fear of God in them over it, seems to be working based of this post.

[BobC]

Originally Posted by Johnny630

I see a lot on this board from people who say they just love the cards and could care less about the value of the cards most claim they would never sell they’re just going to die with them and pass them on to their heirs. Sounds like none of this would be applicable If you never sell any of your cards.

Why is everyone so worked up over this ? I think it’s smart for the IRS to be more diligent over collecting revenues from cards sales, there must be way more selling them ever. Maybe this is what the supposed FBI investigation over alleged trimming and shilling revealed lol. Make them pay up or at least put the fear of God in them over it, seems to be working based of this post.

You could be right about the FBI thing. As for people getting worked up so much about all this, I think it may be due to many people not knowing what or how to properly report their card collecting activities, or what records and details they need to keep, as much as them just not wanting to pay taxes they may owe on cards they're selling. No one is trying to put the fear of God in anyone, at least I know I'm not.

When it comes to topics and areas like this, ignorance is not bliss, in fact in many cases it can turn out to be the polar opposite. Warning people of this change in tax reporting laws at the start of the first tax year it takes effect, as opposed to them initially learning about it at the end of the tax year, will allow them to be much more proactive in how they decide to handle the new change. This is in contrast to the more limited, reactionary responses they would have, had they learned of changes so much later.

Not surprised at all about the potentially expanded reporting requirements and closer monitoring of businesses and people when it comes to taxes. Just look at the costs and record amount of national debt we have now assumed, primarily as a direct result of the pandemic. Add on the additional costs of finally looking to address the long overdue needs of our country's infrastructure, and any fool can see the government needs cash, which they get via taxes. And in these critical and vulnerable economic times, with the pandemic still raging and inflation breaking down the door, one of the last things politicians would ever want to do is raise taxes to potentially further damage the economy. Not to mention the political suicide it can turn into for politicians voting for such tax increases. So instead, people turn to the actual truth and often ask, rather than raise and pile new taxes on me Mr. Politician, why don't you do a better of job of enforcing the tax laws already in place, and getting the people and businesses that aren't properly paying their taxes now to start doing so? And now the politicians are............

[BobC]

Originally Posted by chriskim

Saw this on FB.. of course, it could be fake news...


A friendly reminder that starting 2022, you’ll be taxed on your cashapp, Venmo, PayPal and Zelle for any transactions totaling up to over $600. That is one $600 or six hundred $1 transactions. So if you have a side hustle…… don’t use those apps. You're probably wondering why I encourage you to move to cash. If I purchase A tv for $700 in January of 2022 and decided to sell it on November of 2022 for $600 through one of those apps, I will be paying taxes for the $700 when I bought it and I’ll get a 1099K from the IRS on 2023 to pay taxes on the $600 I made off the tv I sold. If that does not sound ridiculous then I don’t know what to tell you. If I can’t write off my taxes for the Tv on the initial purchase, I should not have to pay taxes again on it for selling it. But the government has your best interest at hand. Tax the rich right?!? Good luck on your side hustle for all my friends that have it. Instead of “taxing the rich” they are really taxing the middle class more. But hey…. The government is for the people. I’m sure they just want to make sure you do your finances correctly. Tax the taxes to tax the tax. Got it . Of course if you are well off, you wont care but if you care about your friends that are not well off and their side hustle is what puts food on their table, then maybe you should care.#LGBFJB ~reposted from another post~

There seems to be something missing from this FB item that you're posting as it mentions paying tax on a $700 purchase, and then again on a subsequent $600 sale of the item you previously bought. Not so sure it is fake news as much as much as it may be misguided thinking (or total ignorance on the part of the FB poster).

You don't pay income tax when you purchase something, so could the tax they're referring to on the $700 TV purchase maybe be sales or use tax? If you purchase a TV like this through Ebay, you'll get dinged for the sales tax, based on where you live, if applicable. But that has nothing to do with using PP, Venmo, or Zelle. That would automatically be charged if you used Ebay for the purchase. And assuming you aren't a formal business buying and selling TVs, any sales tax you paid when you bought the TV technically is deductible, because that sales tax would be added to the $700 cost basis you paid to acquire it, and then offset against what you later sold it for.


And then it mentions owing tax on the entire $600 you get for subsequently selling the same TV you bought earlier that year for $700, and how it gets reported to you on a 1099 now because your sale went through PP, Venmo, or Zelle. If that is the case, you sold something for less than you paid for it, so there's no profit to end up paying income tax on. You'd just need to show on your return that you didn't make money on it. And if the poster was referring to sales tax, it isn't the seller that pays it, it would be on the buyer.

This FB poster is either totally ignorant of the rules, or deliberately trying to be a jerk by giving people bad tax related information. Either way, it just shows how you have to be careful and watch what you read and believe online or wherever anymore, and why it can be extremely critical to have knowledgeable help and guidance in regards to taxes from someone you can trust. Especially over the past few, and coming years, with all the continually changing tax rules, and more to come.

And this new 1099-K reporting threshold just highlights some of the biggest problems the government and we the taxpayers face. The government is trying to get the taxes due and owed from all the operating businesses (legal and illegal) out there, but realizes much of it isn't being reported. Now the government doesn't really look at people having a garage sale or selling some miscellaneous clutter at a flea market once in a while as being in business, and truly doesn't care (or really want) to bother and tax them on any such activities. But in trying to get people actually running ongoing businesses, or even side hustles, that aren't being properly reported, the government ends up doing things, like lowering reporting thresholds for sales on third-party platforms like PP, Venmo, and Zelle to just $600. It will definitely get a lot of previously non-reported businesses to start reporting, or force them to find new ways to transact business that the government isn't already closely monitoring. Unfortunately, these lowered reporting thresholds also grab and affect tons of everyday people that really aren't running ongoing businesses, but now have to go through all the work and hassle these new reporting requirements are putting them, and their tax preparers, through. It is going to be a PITA for a lot of people that get these 1099-Ks next year, that didn't know they were coming.

[chriskim]

Originally Posted by BobC

There seems to be something missing from this FB item that you're posting as it mentions paying tax on a $700 purchase, and then again on a subsequent $600 sale of the item you previously bought. Not so sure it is fake news as much as much as it may be misguided thinking (or total ignorance on the part of the FB poster).

You don't pay income tax when you purchase something, so could the tax they're referring to on the $700 TV purchase maybe be sales or use tax? If you purchase a TV like this through Ebay, you'll get dinged for the sales tax, based on where you live, if applicable. But that has nothing to do with using PP, Venmo, or Zelle. That would automatically be charged if you used Ebay for the purchase. And assuming you aren't a formal business buying and selling TVs, any sales tax you paid when you bought the TV technically is deductible, because that sales tax would be added to the $700 cost basis you paid to acquire it, and then offset against what you later sold it for.


And then it mentions owing tax on the entire $600 you get for subsequently selling the same TV you bought earlier that year for $700, and how it gets reported to you on a 1099 now because your sale went through PP, Venmo, or Zelle. If that is the case, you sold something for less than you paid for it, so there's no profit to end up paying income tax on. You'd just need to show on your return that you didn't make money on it. And if the poster was referring to sales tax, it isn't the seller that pays it, it would be on the buyer.

This FB poster is either totally ignorant of the rules, or deliberately trying to be a jerk by giving people bad tax related information. Either way, it just shows how you have to be careful and watch what you read and believe online or wherever anymore, and why it can be extremely critical to have knowledgeable help and guidance in regards to taxes from someone you can trust. Especially over the past few, and coming years, with all the continually changing tax rules, and more to come.

And this new 1099-K reporting threshold just highlights some of the biggest problems the government and we the taxpayers face. The government is trying to get the taxes due and owed from all the operating businesses (legal and illegal) out there, but realizes much of it isn't being reported. Now the government doesn't really look at people having a garage sale or selling some miscellaneous clutter at a flea market once in a while as being in business, and truly doesn't care (or really want) to bother and tax them on any such activities. But in trying to get people actually running ongoing businesses, or even side hustles, that aren't being properly reported, the government ends up doing things, like lowering reporting thresholds for sales on third-party platforms like PP, Venmo, and Zelle to just $600. It will definitely get a lot of previously non-reported businesses to start reporting, or force them to find new ways to transact business that the government isn't already closely monitoring. Unfortunately, these lowered reporting thresholds also grab and affect tons of everyday people that really aren't running ongoing businesses, but now have to go through all the work and hassle these new reporting requirements are putting them, and their tax preparers, through. It is going to be a PITA for a lot of people that get these 1099-Ks next year, that didn't know they were coming.

Thx for your detail explanation! Appreciated your time. It make more sense to me now. I think you are correct, they were referring that $700 tv needed to pay SALES tax. But they probably think if eBay send them a 1099-K, then they have to file the whole amount on that 1099-k without adjustment what portions of the sell were a lost, and what portions were gains. Anyways, things get so complicated and people need to have detail track records of buy/sell and make all those accountants so busy during tax time. I just hope Turbotax will catch up with all these messes.

[BobC]

Originally Posted by chriskim

Thx for your detail explanation! Appreciated your time. It make more sense to me now. I think you are correct, they were referring that $700 tv needed to pay SALES tax. But they probably think if eBay send them a 1099-K, then they have to file the whole amount on that 1099-k without adjustment what portions of the sell were a lost, and what portions were gains. Anyways, things get so complicated and people need to have detail track records of buy/sell and make all those accountants so busy during tax time. I just hope Turbotax will catch up with all these messes.

If you use Turbotax yourself, I believe you can access online tax help through them. They hire tax preparers, CPAs, etc. to be available for online guidance and help as kind of like independent consultants. I don't know what the charge/cost is for using them. My understanding is they don't actually prepare the return for you, just help and answers questions so you can file yourself. It is like walking into one of the big national tax prep franchises though, like H&R Block or Jackson Hewitt, where you don't know who you'll get to help you or how good they and their qualifications are. For whatever reason though, I feel you would more likely be getting better quality and maybe more knowledgeable people to help you through Turbotax, but it will still just be luck of the draw as to who you get. Reason for my saying that is I know someone who's worked as one of these part-time, online consultants for Turbtax in the last few years. He's very knowledgeable and he'd even been the Controller for a very large, well known mid-West brewery for a number of years, so he's no slouch. And from what he was telling me, it seems Turbotax does pay attention to who they hire to act as consultants for them. Good luck.