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p_rushing · 11-24-2023, 12:37 PM

(11-23-2023, 11:35 AM)mikesez Wrote: If you sell stuff on Venmo or PayPal, your profits should be taxed as ordinary income. That part is simple. All the forms you might have to fill out to show what your revenue and cost were, people like you and me would want that to be as simple as possible. But the H&R Block lobbyists want it to be as complicated and confusing as possible. That's all this is. Not a partisan issue.

(11-23-2023, 12:46 PM)The Real Marty Wrote: I don't see how this new rule would "hurt average Americans," except the ones who don't want to pay their taxes.

(11-24-2023, 09:04 AM)MarleyJag Wrote:
(11-23-2023, 12:46 PM)The Real Marty Wrote: I don't see how this new rule would "hurt average Americans," except the ones who don't want to pay their taxes.

I wonder how many average Americans regularly sell more than $600 on online platforms? My sense is that it’s a small percentage but I could be wrong. I’ve seen a figure of 7.5 million but I’m sure that includes online businesses who are already filing business taxes. The impact of the reporting law probably impacts individuals who sell at a low quantity like they would in a garage sale. Many of those probably report their extra income as required. So the revenue recovered may not actually be worth the effort of implementing the law.

Here is the issue. The IRS and these companies will just report every transaction you have. Unless you are listing items on ebay, mercari, etc, paypal and venmo don't know what the money is for. They just list all transactions, and unless you fix it, all transactions would be considered taxable.

I sold some used equipment well over the limit last year but for a loss as it was used. The 3rd party site and IRS have no clue what I paid for it, I could have bought it at a yard sale, fixed it, and made a big profit. The forms are simple to fill out but you have to have the receipts.

It will affect the average American because they don't keep records for the cost of the items that they paid. Will you be able to provide the proof if the IRS audits you? I doubt most will, so it turns into a huge gotcha item. Then, once they are auditing you, how much other stuff can they find?

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