IRS delays $600 reporting requirement
 

1 more year of the OLD rules for 3rd party payment reporting. Back to 2021 rules...
For EACH 3rd party service you have to have BOTH $20,000 in payments AND 200 transactions. Remember RETURNS don't count and don't reduce either number. At least this is better than $600 in transactions with even just 1 transaction. Of course we know why this is. A one year delay probably so they could get the 87,000 new agents in place to enforce. Spread the word because the way I saw it most people did not even know this was hidden in the 2021 America Recovery Act because most people are not paying attention and as a famous person once said "You have to read it to know whats in it".
Many people were going to be shocked when they got 1 or more 1099-K forms in the mail this January. Spread the word. A real Bummer for some people. They are not looking to the mega rich with all the lawyers and accountants to increase revenue.
This is NOT a political Rant. It is all Fact and information for all in our hobby. Be aware and start keeping records for 2023, What each item you sell COST, the shipping charges, mileage to and from shipping centers, packing supplies etc etc etc. Have to treat it like a regular business now. No exceptions for calling it a hobby.
Merry CHRISTmas everyone.

I knew it was coming but it sounds like it only applies to people running some sort of business, not people selling stuff online they don't need. Also, I read in several places it says stuff that adds up to $600 vs several places saying individual transactions $600 and higher.

And audits aren't what most think of in traditional terms. The bulk or the audits are just the IRS reassessing what they have on file, without your interaction. You can challenge it, but on the smaller scale, it's usually too involved to do so, so the average filer will just cave and pay.

every person will get the 1099-k that has an ebay / paypal / venmo type account personal AND business. If you total $600 in a calendar year you will get one. TOTAL $600 not for $600 transactions and higher. you can have 600 $1.00 transactions and you will get one. Even if you sold your Dining room Table or had a roommate send you some money towards his 1/2 of the rent. It is insane and not well thought out. I agree with "jer" on the normal audits of today but this is before the 80 billion (yes a B) that they are pumping into the IRS to help fund 87,000 new IRS agents and build enforcement for whatthey call the "Gig" economy. This all changes with this funding that was buried in the so called "Inflation Reduction Act" Part of that bill was to create more revenue from "Taxes" to help fund all the NEW projects and Climate programs and Electric car charging stations etc etc etc. Start Paying attention everyone It is all changing.
Thus should hardly be considered a political post as if affects EVERYBODY so i am hoping it stays on the forms to help educate and stimulate conversation. This is the way it USED to be. Thanks.

From the IRS site so that sounds like gifts won't be included.

One thing I thought I heard a while ago was that you get the 1099-k and if you have the receipt showing what you paid for an item, you would only get taxed on any profit you made. I don't have time to search for that right now, but I'll take a look when I have time. I guess they figured most people won't make the effort to prove what they paid for something and the IRS will get the full tax on it.

Some of the articles I read about this seemed to misinterpret the new rules which could lead to problems if people think they are ok.

Yes, If you use paypal friends and family it is not to be included on the 1099-K form and yes you can deduct the cost of the goods along with expenses related to the sale. Basically just like a real business. This is why when you get a 1099-K you will report that income on a Schedule C (business income) along with your 1040. This is where you will deduct cost of goods sold, expenses such as shipping, Packing Supplies, Mileage to and from UPS, USPS, Fed Ex etc.
All that is good but you are creating the requirement to do something most people are not used to doing. Also Ebay and Venmo don't have a friends and family option.
This is starting to sink in with people and the new hiring quota for 87,000 new IRS agents will certainly be a game changer. People will eventually catch on but as usual it will be a little too late. Of course we are all supposed to be paying tax on any income or profit made from a sale but again, this is going to be very new for most people. the new Agents are not being hired to go after the rich or the big corporations. The best scenario is for new Congress to do what they said they would do and block the funding for this massive increase in agents. But of course this was before we gave away the farm in the past week. Out of respect for this Forum this is as deep as I should go. Love this site, A great resource. This is just good to open the discussion a little bit. It is not Political as much as it is Fiscal so Im trying to do my best to keep it at that. Respectfully to all readers.

I applaud you being tactful but you are correct, the fiscal life of all Americans is screwed.

I believe we are over thinking this….the main reason this was done was because the IRS is forecasting over 50,000 agents are going to retire within the next 5 years….these people will need training prior to this.

“Additionally, the IRS is expecting a large number of employees to leave in the next 10 years and will hire new staff to fill those roles. At least 50,000 staff members will leave or retire from the agency in the next five years alone, according to the Treasury Department.”

Also, to go after big corporations who are paying little to no taxes.

“New staff will be hired to improve taxpayer services and experienced auditors who can take on corporate and high-end tax evaders, without increasing audit rates relative to historical norms for people earning under $400,000 each year,” a spokesperson for the Treasury Department said.

These are just a couple sentences in the article. Please read the whole thing when possible.

In conclusion, we need to be diligent about this yet not overthink it either….IMO

Maybe I’m wrong….time will tell.

Kurt







https://www.verifythis.com/article/n...e-0e48d5fffd2a

So I would then assume that the extra 80 Billion in Funding used to Hire these agents will slowly be returned as agents retire? Good Luck with that. Do we really thing the average age of an agent is 60? Also BIG Corporations as mentioned before all have the best Lawyers and Accountants and all play within the Tax Code. We may not like it but none will being in a gray area that would cause them to give up $$ in an audit. Did anybody see the Dave Chapelle opening monologue on SNL a few weeks back. It is really worth a look.
Something to ponder.
Merry CHRISTmas everyone.

A couple of things. Reporting cash transactions with a 1099 does not change the taxability of the transaction. This was always taxable unless excluded for other reasons (1035 exchange comes to mind). I have met so many that believe if you are transacting in cash it is not a taxable event. Not true. But, the tax is on the profit, not on the gross receipts so if you sell a used $3000 dining room table for $600, no worries. Second, big corporations pay tax. They are audited constantly. The company I have worked at for 45 years has never been out of an audit. The army of lawyers and accountants are generally putting deferrals in place meaning the taxes are just paid in a later fiscal period. Additionally, the US tax code requires taxation of global corporate income providing a complex calculation for a credit on taxes paid offshore to prevent double taxation. It is possible for a multinational, which many are, to actually have a US credit derived from foreign income taxes paid that exceeds the US liability in that period, therefore "no taxes". This is clearly not a scenario where the corporation is paying no taxes. This has been misrepresented by activists with a "tax the rich" agenda. I would say that corporate and international taxation, as well as some advanced individual tax planning is incomprehensible to 99.9% of the population (even professionals) but that never prevented anyone from speaking confidently on the subject.