So people will be taxed on venmo and zelle transactions?

[Anonymous]

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Anonymous wrote:People paying cash, check or by Zelle or Venmo
Are also tax cheats.

I say that as I did a $30,000 renovation. Guy asked for cash. He said he does take credit cards but a 3 percent processing fee and his tax rate is 28 percent on the profit and he has payroll taxes for workers.

So like $36,000 on the books.

He explained part of his issue. Most of his workers want cash and the wholesalers of goods want a check.

Literally he paid his workers weekly out of cash I paid him. Right in front of me.

We decided he take a check for materials but cash for workers.

They were not illegals. One was a licensed plumber moonlighting his day job and did not want a trail. Other worked for Pepco. Same thing.

So it is not just tax evasion, but he was fine on the books but you had to pay more

What are you talking about?

It’s not about illegals. Why do you think the plumber and electrician didn’t want a paper trail? Tax evasion. It was just tax evasion.

The people who really want to evade taxes are still asking for cash only payments. Even idiots know that if the IRS checks their bank statements during an audit and they don’t report payments made through payment processors it’s going to be obvious they cheated them.

That may not hit bank. My neighbor growing up had a cash business. He buy very late model used cars from private parties and pay cash. All home improvements in cash. He even pay his part time workers in cash.

IRS will usually do a lifestyle assessment and if you’re living a lifestyle that does not match the amount you say you made on your taxes (i.e. say you make $25k a year but have a Patek Philippe and drive a new Ferrari) they will reassess your taxes which you would have to challenge if you so wish.

Sure, if you are unlucky enough to get a full audit then they might do this. But the chances of getting hit with a full audit are infinitesimally small. Many, many people are getting away with stuff like this and will never be caught.

[Anonymous]

Anonymous wrote:Revolut which has 25 million customers and does free transfers is exempt from the rule. Technically they are not a payment processing company so rule does not apply.

Use them, pretty much everyone on Earth under 30 uses them. Venmo and Zelle are for old people. I mean really really old like over 29.

LOL you're funny!

[Anonymous]

Anonymous wrote:

Anonymous wrote:People paying cash, check or by Zelle or Venmo
Are also tax cheats.

I say that as I did a $30,000 renovation. Guy asked for cash. He said he does take credit cards but a 3 percent processing fee and his tax rate is 28 percent on the profit and he has payroll taxes for workers.

So like $36,000 on the books.

He explained part of his issue. Most of his workers want cash and the wholesalers of goods want a check.

Literally he paid his workers weekly out of cash I paid him. Right in front of me.

We decided he take a check for materials but cash for workers.

They were not illegals. One was a licensed plumber moonlighting his day job and did not want a trail. Other worked for Pepco. Same thing.

So it is not just tax evasion, but he was fine on the books but you had to pay more

What are you talking about?

It’s not about illegals. Why do you think the plumber and electrician didn’t want a paper trail? Tax evasion. It was just tax evasion.

And the Orange One paid $700 per year in taxes. Go figure out your toilet & wiring problems yourself if this offends you so much.

[Anonymous]

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Anonymous wrote:I received about $1000 for a large Fourth of July party from several family members and put it all towards the food and drinks. Will this be taxed?

No. Nothing has changed regarding what's taxable income.

That doesn't mean anything. You think PayPal, Venmo, etc. are going to figure out why you received $1000+? No, they're just going to report it to the IRS, send you the 1099, anyway, no you'll be forced to prove you received $1000 to pay for a BBQ party. Pain.in.the.ass. we all know the govt will overzealous with their new army of IRS agents and try to argue and nauseum with people over proving that they received the money to pay for expenses. Ridiculous.

So much wrong with this reply.

1) It's not going to be a pain in the ass. There will be a line where you report whatever number is on the 1099 but then probably a line in which you offset or claim it's exempt or whatever. You only have to explain if you get audited. You probably won't get audited.

2) There's no "new army of IRS agents" with which you have to "argue." I suspect you are alluding to the hiring of new agents over the next decade to replace attrition of rank-and-file employees. It's not like they're all auditors, not even close, and all that's going to is staff the IRS at levels it should have been all along. So, stop with the inflammatory language.

Where is this line where I offset the 1099 income or claim it is exempt? Hint: it doesn't exist. If you get a 1099 that is wrong, and can't get the issuer to correct it, then your only option is to attach a statement to your return. Even if you do that, you will probably get an adjustment notice from the IRS and then you'll have to write them a bunch of letters trying to convince them that the 1099 is wrong.

NP. It's on your tax forms that you use to file. Not the 1099. You probably shouldn't be posting about things you know nothing about.

Guys, this is going to be similiar to 529s. All 529 distributions get reported as qualified distributions, whether you use the money for education or not. It is up to you to report it the correct way. If you don't, the only way the IRS finds out is if you are audited. This isn't hard.

I realize that. I have prepared my taxes for a long time. Please tell me what form number and line number this is. TYA.

Well, you will only receive the 1099-K from Venmo (or whoever) if you receive a payment for goods and services (NOT A PAYMENT FROM FAMILY & FRIENDS) therefore, you would be reporting that as income as you always have, either on your Schedule 1, Schedule C, or whatever form you use based on how your business has been established.

You're welcome.

You are deliberately avoiding the question. The issue is, what happens if you get a 1099 because someone incorrectly tagged a transaction as "goods or services." You claimed there was a line where you could just offset that. There is not.

One should report the 1099-K income on Line 1 of Schedule C and then back out the amount as an "Other Expense" on Line 27. We do this all of the time. You don't need to attach a statement. It would be helpful to be able to prove the 1099-K money was reimbursement, so anything you can do to document the original purchase would be helpful. But it isn't necessary unless you're audited. As long as your gross revenue on Line 1 matches the information on hand with the IRS, the computers should waive the return through the system.

Schedule C only applies if you are operating a business. We're talking about situations where the payee is not operating a business and gets a 1099 anyway because a payer incorrectly tagged the payment.

You can file Schedule C to report income from hobbies. You don't have to have a Section 162 business to file Schedule C. In fact, the instructions explicitly state we should file Schedule C to report "certain amounts shown" on Form 1099-K.