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You will receive the forms beginning next year for this year’s transactions. The form will be used to fill out your 2022 income taxes that are due in April 2023

You will receive the forms beginning next year for this year’s transactions. The form will be used to fill out your 2022 income taxes that are due in April 2023. It does not apply if a person is using the service to send someone a gift or pay someone back for buying a dinner. According to some payment providers, they will be asking for more information about transactions to see which category the transactions fall into. Also, if you sell something at a loss; for instance, you purchased a bike for $400 and sold it for $300, the amount is not subject to the new law. This is the part I don't get. If I sell old used phones or laptops, never at a profit, how does ebay know I'm not profiting? They just report anyway.

csomar 5y ago
They don't. You'll probably need to report these transactions and get them straightened out with the IRS. Which they can't (since it's lots of people and they are probably cross-checking automatically). This will just get people flagged. And before someone blurb out the usual crap about pay your taxes and that shit. 1. This is $600 total per year (from what I can gather) and not $600 per transaction. 2. People who do not invoice and not pay taxes on these amounts, are usually working on thin sidelines. Most legitimate businesses/transactions will require an invoice. and 3. This will kill any flexibility of doing small work and only becoming regularized once it's worth it. If you made $800 of freelance work, is that really worth the headaches of reporting it? Might as well not do the work and avoid the paperwork involved with that. And let's not talk about all the confusion that is going to arise from people, family and friends transferring money to one another. If really enforced, this is a clusterfuck for those making less than minimum wage and doing casual side hassles. The funny thing is that many people (reading reddit/news sites) think this is a good idea because it'll catch the "tax evaders". > "Yellen has argued that the move will reduce the amount hidden by billionaires" What a circus we are living in.
- etataetaet 5y ago
  Yep it really sucks. I'm a small eBay seller and do it 99% for fun! I make very little money per time spent but I can easily sell over $600 worth of product in one year. This makes it super annoying and basically not worth it anymore!
- PragmaticPulp 5y ago
  > 3. This will kill any flexibility of doing small work and only becoming regularized once it's worth it. If you made $800 of freelance work, is that really worth the headaches of reporting it? Might as well not do the work and avoid the paperwork involved with that. You’ve always had to report freelance work, even before this policy. It’s not that difficult at all. Any of the tax prep software out there will walk you through it. It’s trivially easy to report small jobs. $800 would definitely be worth keeping the documentation and typing a few numbers into the tax software at the end of the year.
  - csomar 5y ago
    You seem to have missed this part. > And before someone blurb out the usual crap about pay your taxes and that shit. People who make below the taxable rate are not in a position to use TurboTax, understand the different forms or read regulation. They do not pay a tax for a reason (too little income) and I think they should be exonerated from these forms because of the reasons that made them make less than the taxable rate (they don't understand the forms). Not everyone doing freelance work is a software engineer.
- vngzs 5y ago
  My roommate sends me $700 via Venmo every month. I funnel it directly to the landlord in a direct deposit on the same day. It's frustrating to realize these transactions are going to be clearly reported as income, because I have never received income from Venmo - all I do with it is split bills. I realize I can probably sort this out with the IRS, but it seems relatively inappropriate that I would have to do that in this situation.
  - lotsofpulp 5y ago
    They will not be assuming your roommate designates them properly: >It does not apply if a person is using the service to send someone a gift or pay someone back for buying a dinner. According to some payment providers, they will be asking for more information about transactions to see which category the transactions fall in
    - vngzs 5y ago
      I was concerned because I couldn't find the specifics on what payment tags would lead to income reporting. Here's a better article that addresses that clarification in specific terms [0]: > It’s important to note that this change — which will be applied during 2022’s tax year and moving forward — applies only to payments received for sales of goods and services, and not to friends and family payments. [0]: https://finance.yahoo.com/news/tax-law-sell-more-600-154820572.html https://finance.yahoo.com/news/tax-law-sell-more-600-1548205...
      - Talanes 5y ago
        >Venmo describes a “goods and services” payment as when senders tag a purchase as such, whether it’s for a product you sell or a service you provide. I think this is the most relevant line. Goods and services is a specific opt-in tag. All the other quotes left it unclear if the completely fanciful descriptions that get put into Venmo payments were actually going to become tax-reporting criteria.
- lotsofpulp 5y ago
  >And let's not talk about all the confusion that is going to arise from people, family and friends transferring money to one another. >It does not apply if a person is using the service to send someone a gift or pay someone back for buying a dinner. According to some payment providers, they will be asking for more information about transactions to see which category the transactions fall into.
- stjohnswarts 5y ago
  This is the elite assuming that only poor/middle class people are crooks while they deal daily with insider information, special carve outs by government, etc.

csomar 5y ago

They don't. You'll probably need to report these transactions and get them straightened out with the IRS. Which they can't (since it's lots of people and they are probably cross-checking automatically). This will just get people flagged. And before someone blurb out the usual crap about pay your taxes and that shit. 1. This is $600 total per year (from what I can gather) and not $600 per transaction. 2. People who do not invoice and not pay taxes on these amounts, are usually working on thin sidelines. Most legitimate businesses/transactions will require an invoice. and 3. This will kill any flexibility of doing small work and only becoming regularized once it's worth it. If you made $800 of freelance work, is that really worth the headaches of reporting it? Might as well not do the work and avoid the paperwork involved with that. And let's not talk about all the confusion that is going to arise from people, family and friends transferring money to one another. If really enforced, this is a clusterfuck for those making less than minimum wage and doing casual side hassles. The funny thing is that many people (reading reddit/news sites) think this is a good idea because it'll catch the "tax evaders". > "Yellen has argued that the move will reduce the amount hidden by billionaires" What a circus we are living in.

etataetaet 5y ago
Yep it really sucks. I'm a small eBay seller and do it 99% for fun! I make very little money per time spent but I can easily sell over $600 worth of product in one year. This makes it super annoying and basically not worth it anymore!
PragmaticPulp 5y ago
> 3. This will kill any flexibility of doing small work and only becoming regularized once it's worth it. If you made $800 of freelance work, is that really worth the headaches of reporting it? Might as well not do the work and avoid the paperwork involved with that. You’ve always had to report freelance work, even before this policy. It’s not that difficult at all. Any of the tax prep software out there will walk you through it. It’s trivially easy to report small jobs. $800 would definitely be worth keeping the documentation and typing a few numbers into the tax software at the end of the year.
- csomar 5y ago
  You seem to have missed this part. > And before someone blurb out the usual crap about pay your taxes and that shit. People who make below the taxable rate are not in a position to use TurboTax, understand the different forms or read regulation. They do not pay a tax for a reason (too little income) and I think they should be exonerated from these forms because of the reasons that made them make less than the taxable rate (they don't understand the forms). Not everyone doing freelance work is a software engineer.
vngzs 5y ago
My roommate sends me $700 via Venmo every month. I funnel it directly to the landlord in a direct deposit on the same day. It's frustrating to realize these transactions are going to be clearly reported as income, because I have never received income from Venmo - all I do with it is split bills. I realize I can probably sort this out with the IRS, but it seems relatively inappropriate that I would have to do that in this situation.
- lotsofpulp 5y ago
  They will not be assuming your roommate designates them properly: >It does not apply if a person is using the service to send someone a gift or pay someone back for buying a dinner. According to some payment providers, they will be asking for more information about transactions to see which category the transactions fall in
  - vngzs 5y ago
    I was concerned because I couldn't find the specifics on what payment tags would lead to income reporting. Here's a better article that addresses that clarification in specific terms [0]: > It’s important to note that this change — which will be applied during 2022’s tax year and moving forward — applies only to payments received for sales of goods and services, and not to friends and family payments. [0]: https://finance.yahoo.com/news/tax-law-sell-more-600-154820572.html https://finance.yahoo.com/news/tax-law-sell-more-600-1548205...
    - Talanes 5y ago
      >Venmo describes a “goods and services” payment as when senders tag a purchase as such, whether it’s for a product you sell or a service you provide. I think this is the most relevant line. Goods and services is a specific opt-in tag. All the other quotes left it unclear if the completely fanciful descriptions that get put into Venmo payments were actually going to become tax-reporting criteria.
lotsofpulp 5y ago
>And let's not talk about all the confusion that is going to arise from people, family and friends transferring money to one another. >It does not apply if a person is using the service to send someone a gift or pay someone back for buying a dinner. According to some payment providers, they will be asking for more information about transactions to see which category the transactions fall into.
stjohnswarts 5y ago
This is the elite assuming that only poor/middle class people are crooks while they deal daily with insider information, special carve outs by government, etc.