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Paypal's new tax policies
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Jan 26, 2022 19:50:53   #
Drbobcameraguy Loc: Eaton Ohio
 
WayneL wrote:
If I sell anything in the future it will not be with PP, check only. The extra paper work is not worth it to me. I need to report 1100 dollars but no need to pay taxes on it, not worth the extra trouble.


You need to understand the tax laws better.

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Jan 26, 2022 20:00:57   #
Longshadow Loc: Audubon, PA, United States
 
TriX wrote:
You are correct that this was part of the American Rescue Plan passed in March by the Democratic majority in both houses. And I think it is also fair to state that Biden pushed this bill, but I don’t think it is accurate to state that every provision of this huge bill was directly attributable to Biden’s personal effort, nor is it accurate to state that this is a direct mandate from the president. The bill, as I’m sure you know, has much larger consequences than this small provision. I should point out that it is aimed at commercial transactions, not interpersonal transactions. I think this is a pretty fair description: https://www.nbcnews.com/news/venmo-paypal-zelle-must-report-600-transactions-irs-rcna11260
You are correct that this was part of the American... (show quote)

Don't think that if you are a "non-commercial entity" you won't be reported (given a 1099). (How would they know one is non-commercial?)
Even people who pay a "housekeeper", if over $600 for the year must provide them with a 1099-MISC.
That's been a rule for a long, long time.

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Jan 26, 2022 21:05:56   #
Drbobcameraguy Loc: Eaton Ohio
 
Longshadow wrote:
Don't think that if you are a "non-commercial entity" you won't be reported (given a 1099). (How would they know one is non-commercial?)
Even people who pay a "housekeeper", if over $600 for the year must provide them with a 1099-MISC.
That's been a rule for a long, long time.


Yes but you can use friends and family in PayPal and be exempt from sending 1099. Also PayPal will not send one for friends and family. It will hurt the individual that sells something and the payee uses regular PayPal to gain the protection. I'm moving to a completely cash system. Except for our retirement investments we began 2 years ago pulling money in small quantities so it disappears. Thank goodness we are old and we've made our money. Cash converted to gold by buying at auctions and individuals is the way to go. Cash is paper that is worthless when it all comes down. Silver and gold is the secure cash. Not bought thru the traditional methods. Yes it is work but the rewards are excellent.

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Jan 26, 2022 21:22:52   #
Longshadow Loc: Audubon, PA, United States
 
Drbobcameraguy wrote:
Yes but you can use friends and family in PayPal and be exempt from sending 1099. Also PayPal will not send one for friends and family. It will hurt the individual that sells something and the payee uses regular PayPal to gain the protection. I'm moving to a completely cash system. Except for our retirement investments we began 2 years ago pulling money in small quantities so it disappears. Thank goodness we are old and we've made our money. Cash converted to gold by buying at auctions and individuals is the way to go. Cash is paper that is worthless when it all comes down. Silver and gold is the secure cash. Not bought thru the traditional methods. Yes it is work but the rewards are excellent.
Yes but you can use friends and family in PayPal a... (show quote)

Thanks.
I don't use any of the affected entities, so I'm not following it/them intently.

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Jan 27, 2022 02:33:32   #
lightyear
 
It really is a partisan issue.
Prior Presidents instructed their appointed Treasury Secretaries to ignore minor transactions between individuals ( Paypal, EBay, Yard and estate sales of household goods) since the taxes received would be minimal, and it would be a relative nuisance for the individuals and the IRS. They preferred that the IRS uses its limited resources to collect large amounts of evaded taxes. Currrently, there are several hundred thousand 2020 tax returns that have not been processed. Nevertheless, Pres. Biden (or his staff) instructed the Secretary of the Treasury to now start to collect the petty taxes due on these petty transactions. Other countries that use EBay do not go after these sales taxes. Meanwhile, the big tax cheaters still are not being caught while the IRS collects (relatively)pennies from individuals selling a surplus item. PayPal and EBay must comply, and we lose.

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Jan 27, 2022 06:22:12   #
SteveG Loc: Norh Carolina
 
TriX wrote:
Pretty hard to attribute that to a president of 1 year. The fact is that the IRS is a mess - 8 months or more to process a return filed on time, and you can blame that on our ridiculous tax system (which hardly started a year ago) and Covid (which didn’t start a year ago either). Tax laws are passed by the congress, and the vast majority of the rules/laws in place have been in place for well more than a year since the congress has been (barely) under Democratic control. This just isn’t really a partisan issue.
Pretty hard to attribute that to a president of 1 ... (show quote)


Pretty hard to attribute this to Biden and the Dems?! It was authored by that true "American" Bernie Sanders! It's a joke to Cal it the " American Rescue Act.". It's more like "Take America Hostage Act."."Come on Man!" It's Biden and the Dems plan, pure and simple.

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Jan 27, 2022 06:33:10   #
tcthome Loc: NJ
 
WayneL wrote:
From what I understand if you pay 500 for something and then sell it for 300 you won't be taxed because you lost money.But a pita with keeping invoices.


So do they give you a tax credit? Seems it would only be fair!

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Jan 27, 2022 08:43:13   #
joanloy Loc: St. Louis, MO
 
MT Shooter wrote:
Yep.
The $600 rule is NOT a new tax as some are purporting. It is simply a direct mandate from Biden to the IRS to force a wide variety of businesses to rat outvtheir customers to the IRS for tax persecution.


This was initially proposed, but rejected. It would have been almost impossible to monitor and maintain. It has been reverted to the original amount of $10,000. Research it.

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Jan 27, 2022 09:06:57   #
Longshadow Loc: Audubon, PA, United States
 
joanloy wrote:
This was initially proposed, but rejected. It would have been almost impossible to monitor and maintain. It has been reverted to the original amount of $10,000. Research it.

Correct.
I just received an email from a tax accountant friend and he was not aware that the banks now reporting everything over $600 actually passed. Still $10K as far as he knows.

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Jan 27, 2022 09:26:51   #
alberio Loc: Casa Grande AZ
 
WayneL wrote:
From what I understand if you pay 500 for something and then sell it for 300 you won't be taxed because you lost money.But a pita with keeping invoices.


Not only will the IRS know how much I paid for that item, but then my wife will also find out. Screwed either way.

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Jan 27, 2022 09:28:03   #
AlanW Loc: Upstate NY
 
If this had been broken out of the American Rescue Plan as a stand alone bill it would have had bi-partisan support no doubt. Some people are using these services to avoid paying taxes and the government decided to do something about it. I have no problem with that. Just stop blaming Biden for everything that's wrong in the world. He's not perfect but he ain't the devil.

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Jan 27, 2022 09:34:17   #
wilpharm Loc: Oklahoma
 
joanloy wrote:
This was initially proposed, but rejected. It would have been almost impossible to monitor and maintain. It has been reverted to the original amount of $10,000. Research it.


you are correct..the 600 dollar deal did not go through...

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Jan 27, 2022 09:41:27   #
Blurryeyed Loc: NC Mountains.
 
TriX wrote:
You are correct that this was part of the American Rescue Plan passed in March by the Democratic majority in both houses. And I think it is also fair to state that Biden pushed this bill, but I don’t think it is accurate to state that every provision of this huge bill was directly attributable to Biden’s personal effort, nor is it accurate to state that this is a direct mandate from the president. The bill, as I’m sure you know, has much larger consequences than this small provision. I should point out that it is aimed at commercial transactions, not interpersonal transactions. I think this is a pretty fair description: https://www.nbcnews.com/news/venmo-paypal-zelle-must-report-600-transactions-irs-rcna11260

I also think it’s highly likely that the bill contains some provisions that benefit you as well as the average citizen, although I am NOT happy seeing the national debt continue to increase as it did under the last president as well, increasing from 21 Trillion to 28 Trillion from 2018 to 2021.
You are correct that this was part of the American... (show quote)


I seriously doubt that there is very much benefit in the bill, and I do think that the addition of thousands of IRS agents whose sole function will be to go after unreported income will reach down into PayPal transactions where people are selling used goods that they no longer have purchase receipts for that will be considered income by the IRS. The democrat party's lust for taxation is amazing. I would also note that say what you will about the previous administration, and there is a lot to say, but a large portion of his deficits were in response to Covid, the Biden administration has pushed for even greater deficit spending.

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Jan 27, 2022 09:45:29   #
wilpharm Loc: Oklahoma
 
Blurryeyed wrote:
I seriously doubt that there is very much benefit in the bill, and I do think that the addition of thousands of IRS agents whose sole function will be to go after unreported income will reach down into PayPal transactions where people are selling used goods that they no longer have purchase receipts for that will be considered income by the IRS. The democrat party's lust for taxation is amazing. I would also note that say what you will about the previous administration, and there is a lot to say, but a large portion of his deficits were in response to Covid, the Biden administration has pushed for even greater deficit spending.
I seriously doubt that there is very much benefit ... (show quote)


the DIms never met a tax they didnt like

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Jan 27, 2022 09:45:35   #
alberio Loc: Casa Grande AZ
 
AlanW wrote:
If this had been broken out of the American Rescue Plan as a stand alone bill it would have had bi-partisan support no doubt. Some people are using these services to avoid paying taxes and the government decided to do omething about it. I have no problem with that. Just stop blaming Biden for everything that's wrong in the world. He's not perfect but he ain't the devil.


Tax avoidance isn't illegal, but tax evasion is. Now everyone who doesn't report every dollar over $600 in one year can be classified as a tax cheat if I understand correctly. This will create the worst accounting nightmare ever. Imagine, buying anything and then selling it a couple years later, you better keep receipts for every purchase you make, because you will have to justify why you lost money on that camera you bought today and sell it later.
Regarding Biden not being perfect, you are right on the money.

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