Reply to So people will be taxed on venmo and zelle transactions?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]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?[/quote]

No. Nothing has changed regarding what's taxable income.[/quote]

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.[/quote]

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. [/quote]

[b]Where is this line where I offset the 1099 income or claim it is exempt?  [/b]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.[/quote]

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. [/quote]

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

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. [/quote]

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.[/quote]

You can use Line Z on your Schedule 1 under Additional Income for "other adjustments". But really, you shouldn't be listing the number as income if it isn't income. That doesn't make any sense. If it gets reported incorrectly, you get a corrected form. [/quote]

Not listing it all is a really bad idea because the IRS will catch it in form matching and then adjust your tax for you.  Putting it on Line Z, Schedule 1 is also going to get in trouble because now you are claiming it as income when it never was.  Have fun getting out of that mess.[/quote]

Putting it on Line Z makes it an adjustment, NOT income.

If it's not income, you don't report it. Bottom line. The IRS MIGHT send you a letter saying you forgot to report XYZ and owe $100 in taxes. You send back a letter saying, it wasn't income, it was from Johnny's soccer team. You send them a receipt. You never hear from them again. [/quote]

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