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or the alternative to push payments back to cash only or quit because its not worth the hassle.
by abfan1127 5y ago
or the alternative to push payments back to cash only or quit because its not worth the hassle.
- throwaway0a5e 5y agoThe junk flippers, handymen and professionals taking side jobs will be just fine taking cash. This only screws the "I work through an app" crowd.
- tylerhou 5y agoNot worth the hassle of paying legally-required income tax?
- albatross13 5y agoCorrect.
- bthrn 5y agoIf I sell my old couch at a loss for $600, and get paid with Venmo, the default behavior now is to have a form sent to the IRS. The burden is on me to prove it is a loss and have the documentation to back it up, or risk having $600 of taxable income in the eyes of the IRS. At this small threshold, it sounds like a burden to me.
- gowld 5y agoSeparately, even though selling used goods at a loss is deductible on income tax, you can still get chased own for sales tax, thanks to USA's absurd non-VAT sales tax system.
- PopAlongKid 5y ago>even though selling used goods at a loss is deductible on income tax Not if the goods were for personal rather than business or investment use. Losses on sale of personal-use assets are non-deductible for income tax purposes.
- gamblor956 5y agoEvery part of your statement is wrong. 1) Selling used goods at a loss is not deductible on your tax return unless you are in the business of selling used goods. 2) Unless you are selling a lot of tangible goods (i.e., you have a business selling things), you aren't even eligible to register for sales tax in most U.S. states. 3) If tax applies to the sale of a used good in this situation, it would be a use tax that is the responsibility of the buyer to report and pay.
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- UncleMeat 5y agoThat's not true. The system only triggers for commercial transactions.
- abfan1127 5y agothe loophole is that we just send via "friends and family".
- LorenPechtel 5y agoAnd that's not a commercial transaction??
- thrwy_ywrht 5y ago>Not worth the hassle of paying legally-required income tax? In many areas of economic activity, there is a level of operation where the costs of complying with tax requirements far, far exceed the costs of the actual tax due. A good example of this is trying to operate a small, wholly-owned foreign company while a US tax resident. The costs of filing a complete form 5471 can be many thousands of dollars at a minimum (and potentially much higher), even if the amount of tax due is negligible or even zero. I don't know if there's a term for this, but it strikes me as a kind of deadweight loss, where tax authorities gain tiny amounts of additional revenue to but tax payers spend much larger amounts on compliance. My concern with sending more and more information to tax authorities is increasing these kind of deadweight compliance losses for small operators who will owe little or no additional tax.
- imtringued 5y agoIncome tax is a stupid idea to begin with.
- lotsofpulp 5y agoMarginal sales taxes would be ideal, but much more difficult to implement.
- BitwiseFool 5y agoTo be fair, most of the taxes we American citizens have to pay were enacted long before the IRS ever had a system to actually monitor and record our transactions. Another poster mentioned selling a used couch for $600 and having that be reported to the IRS. It would then be incumbent on the seller to prove it was a loss and not a capital gain. Now I assume the auditor would let the seller off the hook for something like this, but the key point is that a transaction that no one was reasonably expected to report is now reportable and must be documented.
- BHSPitMonkey 5y ago> but the key point is that a transaction that no one was reasonably expected to report is now reportable and must be documented. If the transaction is marked as commercial in the app.
- stjohnswarts 5y agoIf you don't mark it as commercial you are breaking the law unless selling to family or a friend
- recursive 5y agoI'm probably not paying some taxes right now that I'm legally required to pay. But it's not because I'm trying to cheat the system. I just really don't understand it. I've been involved in a total of one tax problem, and it was a nightmare. It stemmed from me submitting a form to the IRS that I evidently should not have. I would have been much better off if I literally filed and submitted nothing, and just waited for to receive the formal nasty-gram. So the hassle is in having a transaction recorded in a system that's going to create problems for me. I mean, if I had on oracle that could tell me what taxes I actually owed, I would just pay it with no problem. In fact, I would pay for that oracle. But as it stands, it's all too confusing. Cash seems safer.
- abfan1127 5y agoI've done web/software development on the side. I used to have an S-corp, but dealing with IRS filings was a pain, so I started using Gusto. But that cost a lot relative to my quantity of work. I've since closed my corp (what a hassle that was!) and am thinking of hanging up my hat completely because its just not worth the hassle of quarterly filings, annual tax surprises, paying the additional turbo tax fees. I also run a local youth baseball/softball lessons. I push all received funds into a paypal account. I don't profit from it, I just pay for field reservations. All money in goes out. But now, I'll have to jump through hoops. Now I ask myself if its worth it training other people's kids for free.
- andrew_ 5y agoI'm curious to see if this impacts eBay and the high dollar transactions.