Will the new $600 IRS reporting threshold change your habits?

[jkampis]

Originally Posted by NeedChapmans

No you most certainly cannot. If you are not a business, you are not allowed any expenses / costs, period. Your cost basis is what you paid, and the sale price is the sale price. Nothing else allowed.

As an Sole Proprietor / LLC / S-Corp (etc.), those expenses and costs are allowed. That said, you're now going to be on the hook for self-employment taxes on any profits. 15.2% ... adios.

So pros and cons to consider when figuring out if you want to file a Schedule C or not.

You definitely need an accountant. You can pay yourself a salary out of your S Corp revenue and avoid self employment taxes on that amount.

[jcardstore]

This thread is exactly why I just pay someone who I trust to know these crazy rules and exceptions. I'd rather pay to get it done right vs me just halfassing it

How is the average person supposed to know any of this stuff?

[NeedChapmans]

Originally Posted by jkampis

You definitely need an accountant. You can pay yourself a salary out of your S Corp revenue and avoid self employment taxes on that amount.

This is correct. Another road one can take on the road to maximizing tax benefits.

But as an S-Corp, I look forward to meeting your board of directors!

[jkampis]

Originally Posted by NeedChapmans

This is correct. Another road one can take on the road to maximizing tax benefits.

But as an S-Corp, I look forward to meeting your board of directors!

Sorry, I slightly misspoke. You can choose to be taxed as an S Corp as an LLC.

[NeedChapmans]

Originally Posted by jkampis

Sorry, I slightly misspoke. You can choose to be taxed as an S Corp as an LLC.

I know what you meant.

But you're opening up something that most forum members wouldn't know how to do and may not be all that beneficial. Taxed as an S-Corp means opening up payroll / scheduling disbursements etc.

Keep in mind we're talking about 1099's that are under $20k. As Mr. Jerry says ... sometimes the road less traveled, is less traveled for a reason.

[Marcustt]

Originally Posted by NeedChapmans

I know what you meant.

But you're opening up something that most forum members wouldn't know how to do and may not be all that beneficial. Taxed as an S-Corp means opening up payroll / scheduling disbursements etc.

Keep in mind we're talking about 1099's that are under $20k. As Mr. Jerry says ... sometimes the road less traveled, is less traveled for a reason.

So

photo url

Trying to hold on to a little thread of hope, but i am sure someone will debunk my questions quickly.

1. it doesn't say anything about the 200 transactions part of the irs code.
2. could it possibly mean if $600 or more per transaction?

[chezball]

Originally Posted by Marcustt

So

photo url

Trying to hold on to a little thread of hope, but i am sure someone will debunk my questions quickly.

1. it doesn't say anything about the 200 transactions part of the irs code.
2. could it possibly mean if $600 or more per transaction?

It kind of reads that way. I just called Thune and someone will get back to me (let's see)

[jrubbo23]

600 total is the standard most businesses used for issuing 1099-Ks for years. They are trying to simplify the reconciliation process. If they were told that party A paid party B $600 then they want to see the $600 on party B income tax. Its going to be $600 total.

[Marcustt]

Originally Posted by chezball

It kind of reads that way. I just called Thune and someone will get back to me (let's see)

Well, my point is, it doesn't talk about the 200 transactions at all. But, it could also mean a full rewrite of the entire thing, i don't know.


Republicans need to force a repeal of this into a future bill to counteract it.

[asujbl]

200/20000

It’s totally made up

PayPal was lazy so they made an arbitrary cutoff

People realize PayPal and the IRS don’t talk right?

[JeremyNick]

Originally Posted by asujbl

200/20000

It’s totally made up

PayPal was lazy so they made an arbitrary cutoff

People realize PayPal and the IRS don’t talk right?

Did they have a falling out?

PayPal can be such a wh*re sometimes. She probably earned it.

[coltsnsox07]

Originally Posted by Marcustt

So

photo url

Trying to hold on to a little thread of hope, but i am sure someone will debunk my questions quickly.

1. it doesn't say anything about the 200 transactions part of the irs code.
2. could it possibly mean if $600 or more per transaction?

If so, someone selling an $1800 OBO Luka card in 2022 will say, send me three $599 payments and it's all yours...

[Marcustt]

Well.. It's as bad as we thought.



https://www.jct.gov/publications/202...74-of-hr-1319/

[coltsnsox07]

Originally Posted by Marcustt

Well.. It's as bad as we thought.



https://www.jct.gov/publications/202...74-of-hr-1319/

Man what a bunch of legal mumbojumbo in there. Not sure what I read..

[coltsnsox07]

Although most would just want to know this part..
"The part of the provision that lowers and modifies the reporting threshold is effective for
returns for calendar years beginning after December 31, 2021."

[Marcustt]

Originally Posted by coltsnsox07

Although most would just want to know this part..
"The part of the provision that lowers and modifies the reporting threshold is effective for
returns for calendar years beginning after December 31, 2021."

yes we knew that though. Doesn't matter when it started. Hope you kept all the receipts for everything you ever plan on reselling

[Wiseguy917]

Originally Posted by Marcustt

yes we knew that though. Doesn't matter when it started. Hope you kept all the receipts for everything you ever plan on reselling

Sell it all over the next 8 months

[no10pin]

The most important part is the few paragraphs at the end.

The second bolded part is interesting. CashApp and Venmo are about to get a huge influx of people who constantly need to send money to their cousins.


This provision lowers and modifies the threshold below which a third party settlement organization is not required to report payments to participants in its network. Under the provision, for any calendar year, a third party settlement organization is required to report third party network transactions with any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the aggregate number of such transactions. Third party network transactions include any commercial transactions settled through a third party payment network. The provision also clarifies that third party network transactions only include transactions for the provision of goods or services (e.g., personal gifts, charitable contributions, and reimbursements are not included).For example, an individual who has registered for a mobile payment service and uses such a service to reimburse friends or relatives for expenses, or on occasion sells a used item to another person, would not be engaging in transactions that are subject to reporting requirements. However, if that individual were to register with such mobile payment service for the purposes of engaging in commercial transactions, such as regularly carrying on a trade or business through use of that service, the mobile payment service would be required to report under the provision.

The part of the provision that lowers and modifies the reporting threshold is effective for returns for calendar years beginning after December 31, 2021. The part of the provision that clarifies that reporting is not required on transactions which are not for goods or services is effective for transactions after the date of enactment.

[rman112]

Originally Posted by no10pin

The most important part is the few paragraphs at the end.

The second bolded part is interesting. CashApp and Venmo are about to get a huge influx of people who constantly need to send money to their cousins.


This provision lowers and modifies the threshold below which a third party settlement organization is not required to report payments to participants in its network. Under the provision, for any calendar year, a third party settlement organization is required to report third party network transactions with any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the aggregate number of such transactions. Third party network transactions include any commercial transactions settled through a third party payment network. The provision also clarifies that third party network transactions only include transactions for the provision of goods or services (e.g., personal gifts, charitable contributions, and reimbursements are not included).For example, an individual who has registered for a mobile payment service and uses such a service to reimburse friends or relatives for expenses, or on occasion sells a used item to another person, would not be engaging in transactions that are subject to reporting requirements. However, if that individual were to register with such mobile payment service for the purposes of engaging in commercial transactions, such as regularly carrying on a trade or business through use of that service, the mobile payment service would be required to report under the provision.

The part of the provision that lowers and modifies the reporting threshold is effective for returns for calendar years beginning after December 31, 2021. The part of the provision that clarifies that reporting is not required on transactions which are not for goods or services is effective for transactions after the date of enactment.

'Who on occasion sells a used item to another person' ?

What the hell does that mean?

[Marcustt]

Originally Posted by rman112

'Who on occasion sells a used item to another person' ?

What the hell does that mean?

it means, every service is going to report everyone over 600, because it saves potential drama

[Panthersfans]

It means despite the fact that we steal 25 to 30 percent of your paycheck, and still charge you more tax on gas, groceries and pretty much everything else, we still want more and we will take it and you can’t do a thing about it.

[rman112]

Originally Posted by Marcustt

it means, every service is going to report everyone over 600, because it saves potential drama

It says those aren't subject to reporting.

You can easily sell even a single, used item for $600+. Makes no sense.

[Marcustt]

Originally Posted by rman112

It says those aren't subject to reporting.

You can easily sell even a single, used item for $600+. Makes no sense.

Yes, and the service provider can arbitrarily decide if you've sold enough or not. or just a casual flipper? You think they want to have a department who goes through each account and decides if they are a flipper or not? Nope.. They will just report them all.

[Campbelljh3]

How do consigners work, never done that before? If you just have consigners sell everything for you do they report the sales they payout to you? Same goes for big auctions sites like Goldin? Never sold anything this method before but might consider.

[grayghost17]

They don't report anything. The money is yours, free and clear.