New Tax Reporting ($600 Threshold per year) and Consignments 21 21

[Dr. Balls]

On 12/23/2022 at 1:38 PM, the blob said:

It was the very low threshold that pissed folks off. You could sell off some junk items in your closet to make room and after shipping costs easily exceed $600 and then boom you have annoying paperwork. 

As someone posted earlier: this. A major league hassle for practically everyone instigated by a government mindset that the way to meet financial needs is to increase taxes instead of cutting back spending. 

[Dr. Balls]

On 12/23/2022 at 1:57 PM, Ryan. said:

The threshold has been $600 for years here in Massachusetts so I'm very used to the filing procedures but it has required keeping strict purchase records.

I’ve been tracking my purchases in a database for 11-12 years now, and on big sales years, they get turned into the accountant. It’s routine for me, but for people like my mom doing a garage sale, it’s pretty stupid.

[lizards2]

On 12/23/2022 at 12:57 PM, Ryan. said:

The threshold has been $600 for years here in Massachusetts so I'm very used to the filing procedures but it has required keeping strict purchase records.

I didn't know you were a Mass-hole!?! 

[Ryan.]

Kind of explains a lot, doesn't it. 

[skypinkblu]

I kept a lot of receipts...doesn't mean I can tell that the Action Comic #6787 (yes that's a made up number)  that I bought 20 years ago is still the one I have now. There is no way I can go back through a pile of receipts and accurately figure out every $2 to $20 book I've bought multiple times as I upgraded them...plus I bought things in groups mostly so I could read them. It just turns a hobby into a chore and makes it less fun.

I would think that a flat rate charge of 10% on any online transaction would be a lot easier for the IRS and real people. If you are a business, you can choose to do it the old fashioned way.

I have some other thoughts about taxing the middle class, but it's a holiday week, so I'll just wish everyone a good weekend.

[Barth]

Looks like it is delayed for this upcoming tax year! Maybe they'll get rid of it all together. 

https://www.irs.gov/newsroom/irs-announces-delay-for-implementation-of-600-reporting-threshold-for-third-party-payment-platforms-forms-1099-k

[SkOw]

On 12/23/2022 at 7:17 PM, Barth said:

Looks like it is delayed for this upcoming tax year! Maybe they'll get rid of it all together. 

https://www.irs.gov/newsroom/irs-announces-delay-for-implementation-of-600-reporting-threshold-for-third-party-payment-platforms-forms-1099-k

Wow what a mess.  My question is why now?  Why didn’t they do this 11 months ago. If I was a single mom selling handmade jewelry on Etsy I’d be pissed. 

[SkOw]

And to clarify I never was for this in the first place. The best solution was to not do it at all.  The only one based on number of transactions and 20K was much more fair than this. 

[Jfend72]

Like Barth mentioned they are delaying this for the 2022 reporting year.  Looks like the new Congress may try a middle ground of $10k as the reporting limit.  It will be interesting to see if they do implement the change in 2023 as it seems they realized this will be a mess for all involved.  
 

https://www.forbes.com/sites/ambergray-fenner/2022/12/23/after-senate-fails-to-change-law-irs-grants-reprieve-to-1099-k-filing-requirement/amp/

 

[Courageous Cat]

On 12/23/2022 at 1:33 PM, jaybuck43 said:

Just a heads up, the IRS is delaying the implementation this year.  Now goes into effect January 2024 for the 2023 calendar year.

https://www.irs.gov/pub/irs-drop/n-2023-10.pdf

That was by far the fairest decision. To make that retroactive was downright dirty pool. At least this way people have a fair chance to prepare.  

[jaybuck43]

On 12/24/2022 at 9:47 AM, Courageous Cat said:

That was by far the fairest decision. To make that retroactive was downright dirty pool. At least this way people have a fair chance to prepare.  

It was never retroactive. Law was passed in 2021. It went into effect in 2022 with a due date of January 2023 (companies and people have known about this since March 2021.) so this has been 21 months in the making.

[ThothAmon]

Let them eat cake (at least for another year). 

[DR.X]

On 12/24/2022 at 10:01 AM, ThothAmon said:

Let them eat cake (at least for another year). 

[jaybuck43]

On 12/23/2022 at 9:08 PM, SkOw said:

Wow what a mess.  My question is why now?  Why didn’t they do this 11 months ago. If I was a single mom selling handmade jewelry on Etsy I’d be pissed. 

Because 11 months ago or 11 years ago that single mom is SUPPOSED to report that income. Get $200 from mom and dad as a birthday present? Gotta report it. Have a yard/garage sale to clean out the house and get paid only in cash? Gotta report it. Working a side hustle selling comic books or making jewelry? Gotta report it. The ONLY thing this law changed is that the companies have to report it too so the irs software can easily check/verify that you properly reported. 
 

Now here’s the thing, there’s s difference between having to report and having to pay taxes on it. That birthday present from mom and dad? Gift deduction. The yard sale? Depreciation based off sale price verses msrps (assuming you don’t have receipts to show actual price paid). Your Etsy side hustle? You can deduct all your business expenses so only need to pay tax on your profit.

But for the people complaining about this change as if you suddenly have a new tax? Just tell us you’ve been committing tax fraud and want to continue doing so.

Edited December 24, 2022 by jaybuck43

[ThothAmon]

On 12/24/2022 at 11:10 AM, jaybuck43 said:

tax fraud

Easy popeye. As opposed to the “legal” writing off of private jets for the well healed?. I’d say the forbearance of enforcement by the irs is tacit acknowledgment that the first few bucks of a side hustle are taxable at the discretion of the taxpayer and the Congress better remove the requirement before next tax season. 

[jaybuck43]

On 12/24/2022 at 11:31 AM, ThothAmon said:

Easy popeye. As opposed to the “legal” writing off of private jets for the well healed?. I’d say the forbearance of enforcement by the irs is tacit acknowledgment that the first few bucks of a side hustle are taxable at the discretion of the taxpayer and the Congress better remove the requirement before next tax season. 

You can complain about specific deductions, everyone can. But failure to report income IS tax fraud. Taking advantage of tax deductions is not, because you ARE reporting income and then taking deductions. Same with taking deductions for mortgage interest, business expenses, etc.

[Mr. Zipper]

On 12/24/2022 at 11:39 AM, jaybuck43 said:

You can complain about specific deductions, everyone can. But failure to report income IS tax fraud. Taking advantage of tax deductions is not, because you ARE reporting income and then taking deductions. Same with taking deductions for mortgage interest, business expenses, etc.

You seem like the type to report the nickel you picked up in the parking lot. If not, you're a "tax fraud" by your own standards. 

Most other people live their lives using reasonable standards that follow the spirit, if not exact letter of the law. And that includes not worrying about occasional small amounts of revenue generated by selling used goods. There were few, if any, complaints about the prior threshold because it seemed to fairly make a distinction from people who actually had a small biz side hustle and grandma selling her Hummels. That distinction was wiped away by the $600 threshold.

[jaybuck43]

On 12/24/2022 at 11:49 AM, Mr. Zipper said:

You seem like the type to report the nickel you picked up in the parking lot. If not, you're a "tax fraud" by your own standards. 

Most other people live their lives using reasonable standards that follow the spirit, if not exact letter of the law. And that includes not worrying about occasional small amounts of revenue generated by selling used goods. There were few, if any, complaints about the prior threshold because it seemed to fairly make a distinction from people who actually had a small biz side hustle and grandma selling her Hummels. That distinction was wiped away by the $600 threshold.

Sub $1 is rounded to $0 for tax purposes. And yes, there is a box for “treasure trove”.

The spirit of the law is to pay x% on every penny you have of income. Know how I know that’s the spirit? Because there is a literal book of explanations for things like “selling baked goods I make at home” and “held a garage sale”. And EVERY single answer is “you owe x% on the profit and it is reportable”.

The $20,000/200 transaction for generating a 1099 was created in the time before the internet. The IRS assumed you were paying the tax on those transactions but it didn’t have a way to check. Now the number of these transactions are exploding and people are not reporting it. So the irs is cracking down. That’s it. 

[Courageous Cat]

On 12/24/2022 at 10:57 AM, jaybuck43 said:

It was never retroactive. Law was passed in 2021. It went into effect in 2022 with a due date of January 2023 (companies and people have known about this since March 2021.) so this has been 21 months in the making.

Thank you for the correction. Let me correct myself and say that I've only been aware of it earlier this year. At least now I'll be sure to save receipts 

Edited December 24, 2022 by Courageous Cat

[jcjames]

On 12/23/2022 at 2:01 PM, Dr. Balls said:

As someone posted earlier: this. A major league hassle for practically everyone instigated by a government mindset that the way to meet financial needs is to increase taxes instead of cutting back spending. 

There are hyperintellectual brainiacs (many who post in the Water Closet) who spout the idea that spending doesn't matter, just as long as the FedGov can still make the minimum credit payments.

It's the silly lowbrows who think that the FedGov needs to operate like a business or private entity with their common sense accounting principles and stuff.