"Warning"Change in 2022. tax laws

Coin-Saver

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Anyone who uses cash apps a lot to buy and sell need to check out the new tax laws. It seems that the Government is going to monitor these apps and send out 1099's and charge you taxes on any amount over $600. This means PayPal and Venmo and the lot. Just wanted to make sure no one gets stung by an unexpected tax bill next year.
 
Durned all you guys that keep evading taxes !! See what you've gone and done now ? Tsk tsk :mad:
 
I assume you're talking about the federal government monitoring. Wouldn't that only affect sellers, and as Tom indicated, sellers that had previously been evading taxes?
 
Pretty bad

When you have to pay 20 bucks to park at the beach to find 2 bucks in clad , that's a 10 x tax , what's the world coming to :(
 
The government isn't monitoring anything. They're just changing the tax laws concernig when certain financial institutions must generate 1099s and send them to the account owner and the IRS. A few other things.

First, this new reporting requirement doesn't apply to transfers being sent through Friends and Family. So if you're receiving funds through Goods and Services and you receive more than $600, Paypal or whoever will then report your transaction(s) to the IRS and send you a 1099.

Second, even if a 1099 is generated, it's not automatic that you owe taxes. Instead, the burden is now on you to prove to the IRS why you don't owe taxes. For example, let's say you bought a new Equinox 800 for $950. Then a few months later, you sold it for $750 and got paid through Paypal's Goods and Services. A 1099 gets sent to the IRS saying you "earned" $750. Now, the IRS wants you to pay a tax on it. But you obviously dont' have to, as this isn't income and instead, it's actually a LOSS. So you'd have to somehow tell the IRS (I don't know how, maybe a sworn statement or receipt?) that you don't owe any taxes on that transaction because your cost basis exceeded your sales proceeds.

The bottom line is that there isn't a new tax. There's just a new threshold that applies when having to report certain transactions to the IRS. For example, until this new law went into effect, Paypal had a $10,000 and 200 transaction (or something along those lines) threshold before they would report anything to the IRS and/or generate a 1099.
 
I’m no tax expert but if I read it correctly selling personal items at a loss exempts the transaction from taxation. Thinking this would pretty much cover anyone selling a used detector as long as you have documentation that you paid more than the current sale price (if it is over $600).

https://newsroom.paypal-corp.com/20...eporting-Requirements-Your-Questions-Answered

You're correct. The problem is in the obligation to prove to the IRS that you took a loss.

Just think about people who flip items from yard sales, flea markets and thrift stores, with some of those transactions resulting in a net income loss for the taxpayer. Can you imagine the nightmare of having to document every. single. transaction? *shudders* All the IRS sees is the info on your 1099, ie gross sales proceeds. But the IRS doesn't see how much you spent to earn those proceeds.

But, I think there are special accommodations that can be made where you can simply state that certain transactions were losses or special assumptions you can rely on where not every single transaction must be "explained" to the IRS...or something like that.
 
I’m no tax expert but if I read it correctly selling personal items at a loss exempts the transaction from taxation. Thinking this would pretty much cover anyone selling a used detector as long as you have documentation that you paid more than the current sale price (if it is over $600).

https://newsroom.paypal-corp.com/20...eporting-Requirements-Your-Questions-Answered

For NOW.:lol: Just imagine the documentation nightmare for some people. And I'm Sure they will never pass a law to include what they want. LOL So yeah I can see where you think you are in the clear but now that they will have records you might even get charged more tax on a detector you are reselling at a loss than you paid when you bought it
 
Just another way of making life difficult for the little guy. another gov't money grab, made possible by a cashless society.
 
It is absolutely a money grab. They tried to put this same “monitoring” in place for banks and financial institutions but it didn’t pass. For the average person this is no more than a nuisance. The current PayPal threshold was $20k or 200 transactions per year I believe? I have an e-commerce website and am well over both. It gets reported, I pay the taxes on the amount I am responsible for. It works and makes sense. Reporting a singular transaction seems like a total waste of time and in the end will probably yield them nothing.

I have no doubt that there are plenty of people avoiding their taxes but this certainly does not seem to be the answer.
 
Its essentially hurting small businesses, mainly the ones that are barely getting by. Depending on the amount owed, it could even be the final nail in the coffin for some...
 
Its essentially hurting small businesses, mainly the ones that are barely getting by. Depending on the amount owed, it could even be the final nail in the coffin for some...

It doesn't increase taxes. It only changes the reporting obligation.

Most small businesses following the law were already reporting their transactions and this new requirement will change nothing for them. But for people like us, who like to sell a few metal detectors and/or acessories per year, it completely changes how we do our taxes (even if it doesn't change how much we have to pay). And if we don't want the extra work of proving to the IRS we didn't make money, but lost money instead, we have to change how we accept payments.

If only people didn't hide their taxable income and didn't try to clean ill-gotten gains, we wouldn't have to deal with this.
 
.... must be "explained" to the IRS...or something like that.

mh9162013 : I have enjoyed reading your posts. Your input to this topic is very insightful. Thanx !

To answer your musings : The way anyone shows that any such "income" is more-than-offset by expenses (thus not "profit"), is that they would need to list their expenses as write-offs.

No different than a business does for their receivables vs expenses. For example, in my business, I too receive handfuls of 1099s each year from customers. And I dutifully report all our income. Yet, like any business, I too write-off expenses. Eg.: Fuel, labor, materials, etc.....

That's fine & dandy for individuals who already have a business tax system set up. That's routine for any business to itemize like that.

But for someone who is just selling a used Nox for $750, or someone who sells $750 in gold to a refiner, then it's like they have set up their personal tax returns as a business. In order to qualify for write-offs.

And I realize we hobbyists bristle at this, since, of course, this truly IS just a hobby. We're not making $$ off of it (unless one of hits a bonanza rare coin or cache).

But to Uncle Sam's credit (ie.: from their perspective) it's the Camel's nose-in-the-tent : The next guy will also jump on that band-wagon and say that all the $$ they're getting is "merely a hobby". When, in fact, they just don't want to pay taxes on their income.

So you can hardly blame Uncle Sam for wanting to close these loopholes. And you can hardly blame Seller/retailers , who dutifully pay taxes on their income, from crying foul when other sellers are skirting taxes. The creating an unfair un-level playing field.

20+ yrs ago, before the advent of digital buying and selling, you had to go to brick & mortar stores to buy or sell an item. And that has always had taxes built into the products (as evidenced by the taxes listed on your store receipt). But in this digital age that we live in, things are trying to keep up with the times.

And you're right : At no point was taxes ever not due on things we find. Eg.: when we go to smelt gold (from our rings), or the profits made on flipping garage sale items, etc..... It was always/only/ever the "honor system" before. And if someone objects and says : "But my costs are higher than my earnings" or "this is only a not-profitable-hobby", then : They are more than welcome to create the long-form taxes each year, to treat it like a business, so they can avail themselves of write-offs. Eh ?
 
mh9162013 : I have enjoyed reading your posts. Your input to this topic is very insightful. Thanx !

To answer your musings : The way anyone shows that any such "income" is more-than-offset by expenses (thus not "profit"), is that they would need to list their expenses as write-offs.

No different than a business does for their receivables vs expenses. For example, in my business, I too receive handfuls of 1099s each year from customers. And I dutifully report all our income. Yet, like any business, I too write-off expenses. Eg.: Fuel, labor, materials, etc.....

That's fine & dandy for individuals who already have a business tax system set up. That's routine for any business to itemize like that.

But for someone who is just selling a used Nox for $750, or someone who sells $750 in gold to a refiner, then it's like they have set up their personal tax returns as a business. In order to qualify for write-offs.

And I realize we hobbyists bristle at this, since, of course, this truly IS just a hobby. We're not making $$ off of it (unless one of hits a bonanza rare coin or cache).

But to Uncle Sam's credit (ie.: from their perspective) it's the Camel's nose-in-the-tent : The next guy will also jump on that band-wagon and say that all the $$ they're getting is "merely a hobby". When, in fact, they just don't want to pay taxes on their income.

So you can hardly blame Uncle Sam for wanting to close these loopholes. And you can hardly blame Seller/retailers , who dutifully pay taxes on their income, from crying foul when other sellers are skirting taxes. The creating an unfair un-level playing field.

20+ yrs ago, before the advent of digital buying and selling, you had to go to brick & mortar stores to buy or sell an item. And that has always had taxes built into the products (as evidenced by the taxes listed on your store receipt). But in this digital age that we live in, things are trying to keep up with the times.

And you're right : At no point was taxes ever not due on things we find. Eg.: when we go to smelt gold (from our rings), or the profits made on flipping garage sale items, etc..... It was always/only/ever the "honor system" before. And if someone objects and says : "But my costs are higher than my earnings" or "this is only a not-profitable-hobby", then : They are more than welcome to create the long-form taxes each year, to treat it like a business, so they can avail themselves of write-offs. Eh ?

I don't disagree with anything you said. I don't like this new reporting requirement...in fact, I hate it. But I understand why it's there.

I may be odd, but I've never hated paying taxes. I've just hated reporting/filing taxes. I hate the anxiety and fear it creates, as well as the extra work required by us individual taxpayers. So this new reporting requirement bothers me just as much (if not more) than an actual tax hike.
 
Wouldn't that only affect sellers, and as Tom indicated, sellers that had previously been evading taxes?

EBay and other corporations evade billions in taxes every year, but let's go after someone who makes 20k a year selling his possessions on eBay. This is what happens when all your politicians are millionaires...
 
Just think about people who flip items from yard sales, flea markets and thrift stores

Yup, I take a beating on taxes because I don't have receipts for 90% of the items I sell on eBay. I buy a ton of stuff at yard and estates sales, as well as buying collections on Craigslist. No one is willing to give me a receipt for any of those purchases.

I also lose on all the CDs and DVDs I sell. I paid $12 to $20 each for them, but only get $5 or less for them on eBay. Who the heck saved receipts for those items? Bottom line, I'm paying way more than my fair share in taxes.
 
I want those little kids who set up lemon aid stands in the summertime to pay their fair share too. :police: They've been getting away without paying taxes for way too long.
 
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