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Yeah, and I repeat …. When is the IRS going to start trolling Community yard sales… :/
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*** Come visit me on deviantArt at http://ela-hara.deviantart.comArticle from the New York TIMES, written by Alan Rappeport, dated 12-23-2022:
[b]I.R.S. Delays Tax Change for Users of Venmo, Cash App and Other Digital Wallets – Users who receive income through digital payments will have another year before having to comply with a new tax rule that had sowed confusion and concern. [/b]
The Internal Revenue Service said on Friday that it is delaying by one year a new tax policy that will require users of digital wallets and e-commerce platforms to start reporting small transactions to the tax collection agency.
The delay of the rule comes in the wake of bipartisan backlash from lawmakers and an uproar from small business owners, who only recently became aware of the tax change.
The I.R.S. said that the delay is intended to provide a smooth transition period for taxpayers to comply with the policy, which was enacted as part of the American Rescue Plan of 2021 and which was supposed to take effect this year. Many users of services such as Venmo, PayPal, Cash App, Stub Hub and Etsy only recently became aware that they would be receiving I.R.S. tax forms associated with their transactions, sowing fears of surprise tax bills.
“The I.R.S. and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan,” Doug O’Donnell, the acting I.R.S. commissioner, said in a statement. “To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the I.R.S. will delay implementation of the 1099-K changes.”
He added: “The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”
Before the rule change, services like Venmo supplied users with a snapshot of their income called a 1099-K form only if they had received more than $20,000 and had more than 200 transactions. The forms were supposed to be submitted with tax returns to the I.R.S. and were intended to help determine how much a taxpayer owes.
Those thresholds were lowered to $600 for the entire year, regardless of the number of transactions, significantly broadening the number of people who are likely to be required to pay more taxes.
Lawmakers from both parties scrambled this week to scale back or reverse the tax measure in the spending package that Congress is set to pass this week, but none of the changes were ultimately included in the final legislation.
The Treasury Department, which oversees the I.R.S., has been under pressure from lobbyists and lawmakers to find a solution to the widespread confusion before taxpayers begin receiving the tax forms in the coming weeks.
“I urge the I.R.S. to use their authority now to delay the implementation and allow Congress to continue working to find a lasting solution that prevents this harmful regulation from impacting small businesses,” Senator Joe Manchin III, Democrat of West Virginia, said in a statement on Thursday.
As I figured – PayPal has just graced my InBox with its notification that….
“Your Form 1099-K for 2022 is now available
To comply with IRS regulations, we have issued a Form 1099-K for tax year 2022, which is now available in your PayPal account.
The form summarizes the gross payments you received through PayPal for the sales of goods and services during tax year 2022. This information isn’t intended to be and should not be taken as tax advice. Please consult a tax advisor about how these transactions should be reported.
To view and print your form, click View Form 1099-K or Log in to your PayPal account.
We’ll also send the information contained in the form to the IRS and to relevant state tax authorities to comply with tax reporting regulations.
Thanks for being a valued PayPal customer.”
Yeah Right! Thanks for being a ‘valued’ PayPal customer…. Time to dust off my spread sheet and update it for the very few items I did sell within the first few months of 2022…
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*** Come visit me on deviantArt at http://ela-hara.deviantart.com[blockquote]There is a form for reporting profit/loss on a number of miscellaneous things including the sale of collectibles, coins, etc. Unfortunately I don’t remember the ID number of the form at the moment. It isn’t the form for reporting profit/loss on stocks and investments.[/blockquote]
I wonder if getting a 1099 changes where you have to report it, though? I use Tax Act. I think they usually ask me if I got any 1099s, and I would put in the information there, but I’m not sure how to tell it not to count that as a profit.
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Embrie wrote – I wonder if getting a 1099 changes where you have to report it, though? I use Tax Act. I think they usually ask me if I got any 1099s, and I would put in the information there, but I’m not sure how to tell it not to count that as a profit.
I’m not familiar with that program but it should ask you a number of questions if you say that you got a 1099.
The 1099 from Paypal probably will show total income received from everything you sold in 2022. Then you (or the tax program) need to calculate the profit or loss for each sale and add them together.The tax form questions should let you show the profit or loss:
Date that you bought the item?
How much did you pay for it?
Date that you sold the item?
Total amount that you sold it for?
Fees and/or expenses associated with the sale – this is things like Paypal fees and postage.
Net amount received for the sale (total that you sold the item for minus fees and expenses)
Profit or loss on the transaction (net amount received minus the purchase price).If, for some reason, the tax program wants you to add everything together and just give it the totals:
Date that you bought the items is Various
Total amount that you paid for everything you sold in 2022
Date that you sold the items is Various
Total amount that you sold the items for (total income received from the sales)
Add together all the fees and/or expenses associated with the sales
Net amount received for the sales (total amount received minus the total for fees and expenses)
Profit or loss for sales in 2022 (net amount received minus the total of prices you paid when you bought the items). This will be a negative number if you have a loss.It sounds more confusing than it really is. 🙂
I expect that the tax program will do most of the calculating for you. You do need to be sure you have all the necessary information.I got it… didn’t report it. Let them audit me. I got a whopping $237 bucks back after paying in over $18K this year so they can e-a-t – m-e!
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