Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Indeed. This is a classic example of right-wing fearmongering and misinformation, using the IRS as a scapegoat and straw man. Hence the references to the IRS "army" of auditors and making people fearful they'll be aggressively audited for using Venmo.

These things aren't going to happen, except in the fantasy world spun by right-wingers and the heads of the gullible followers.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

As long as you list that transaction as "friends and family", you will not receive a 1099 for those reimbursements.

Also, while I can't prove this, I think both the services and the IRS are going to be pretty lenient about one time payments. I think what this shift is really designed to capture is regular payments that are CLEARLY income. So a one time payment, even a large one, is unlikely to get flagged (unless you are dumb and categorize it as "goods and services"). But any regular payments of the same amount between two parties are going to get scrutiny. So unless you are throwing a neighborhood BBQ every month and getting reimbursed in a single lump sum on the 15th of every month, no one is going to ask you to explain anything about that event. Ever. You can calm down now.

The problem is that it is the payer, not the payee, that tags the transaction. There are billions of payments each year over these platforms. Many payers will choose the wrong tag and then the payees will be stuck. I don't share your optimism that the IRS will be lenient for one-time payments, at least on the front end. The IRS's systems are set up to do form matching. That means they compare all the W-2s, 1099s, K-1s, etc. for your social with what's on your return. When they don't match, they adjust your tax and send you a letter. It's all automatic. The taxpayer is then going to have to send the IRS a letter explaining why the 1099 is wrong. Going through all those letters is going to be enormously burdensome for both the taxpayers an the IRS.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

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.

Anonymous wrote:It's only for payments tagged as "goods and services", so if you paid your dog walker as "friends and family" they will not get a 1099.

Yes, but Paypal is now flagging accounts that regularly do large dollar amount transfers, especially if between the same users. They will look for patterns and may remove the "friends and family" option. Our cub scout troop used to get dues paid by Paypal and had the option to use "friends and family" but recently, they were instructed that the troop account would no longer have that option for payments to it. So, now, all transactions have service charges attached when paying by Paypal. This has happened to a couple of other groups that my family is active with, so Paypal is definitely auditing such accounts and removing that option from some.

Not sure about Venmo. I get paid for work via Venmo (work that I have always paid taxes on), but I haven't seen any changes to the payment plans yet, there.

Anonymous wrote:It's only for payments tagged as "goods and services", so if you paid your dog walker as "friends and family" they will not get a 1099.

Yes that’s my impression too.
I have received several PayPal payments from market research people for user studies. I have a strong hunch they used friends and family but who knows.

Anonymous wrote:

Anonymous wrote:

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.

As long as you list that transaction as "friends and family", you will not receive a 1099 for those reimbursements.

Also, while I can't prove this, I think both the services and the IRS are going to be pretty lenient about one time payments. I think what this shift is really designed to capture is regular payments that are CLEARLY income. So a one time payment, even a large one, is unlikely to get flagged (unless you are dumb and categorize it as "goods and services"). But any regular payments of the same amount between two parties are going to get scrutiny. So unless you are throwing a neighborhood BBQ every month and getting reimbursed in a single lump sum on the 15th of every month, no one is going to ask you to explain anything about that event. Ever. You can calm down now.

Anonymous wrote:

Anonymous wrote:

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.

The $600 reporting threshold was added as part of Obamacare as a way to pay for the program. Then it was later removed, and added in again by.. I think it was Trump's tax cut and jobs act?

All it does is add reporting requirements. It doesn't change how much taxes you owe.

Anonymous wrote:

Anonymous wrote:Right, very little of the money I'm receiving via Venmo is income -- usually it's someone paying me back for an expense I covered all of and then we split after the fact. That isn't taxable. How am I supposed to report it to the IRS?

That isn't reportable. It's for people that do things like tutoring or dog-walking that are getting paid by Venmo. I'm not sure how Venmo and the IRS determine what the money is being transferred for though. How do they know if it's just reimbursing a friend versus paying for a service?

The IRS doesn't know these things and they aren't trying to analyze it. Whenever any documentation is submitted to the IRS, they record it with the SSN or EIN. When your tax filing coms in, they compare the number of documents submitted with the number they have on file. If the number is the same, great. They accept the return. Tax filing with the same number that are submitted automatically are usually processed very quickly. If you have a discrepency, then it may need to be submitted to a human being to look into and determine whether there is reason to audit the record or whether it can be accepted. The more money and the more unmatched documents (ones that are reported as payment transfers vs ones that are recorded as income), the more likely that it goes to a full audit.

If you get a 1099 for untaxable income, you should put a note on it as to what the money was transferred for from whom so that should you get a letter from the IRS about an unrecorded document, you can reply with the details. You are supposed to keep your tax documentation for 7 years. Anytime during that 7 years, your tax returns could be questioned. You can provide them the details and for many cases like the ones mentioned here (transfers between family and friends), the explanation will suffice. The question of the sports coach who is getting paid under the table is going to be a red flag, though. For that parent, you should be keeping records of all transactions with the coach in your tax records at home. At some point in the future, he may be audited and it may be questioned why you have hundreds of dollars of payments each year to this individual and what it was for. You should be able to provide information that you were paying $X per session for training for your child and that you paid $Y amount every month/session/quarter/whatever for that purpose. The usual limit is $600. If you pay another individual less than $600 per year, it is likely not to be questioned as the majority of those cases end up being transactions like mentioned above (transfers between family and friends). If you pay over $600 in a year, you definitely need to keep records in your personal files as that may come up in the future.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it became effective Jan 2022. So you can expect a 1099 from Venmo, PayPal, etc. in the next couple of months if you made over $600 on them this year.

I didn't, no small business here, but other people who have little side hustles will suffer. Although I see the point.

Doing by the book is not suffering. You pay tax because you are supposed to pay tax.

But the principal of the thing is that billionaires pay almost none of their fair share, yet people who are just trying to pay the rent are going to have a harder time doing so. You see how this sucks, right? People making 6 figures aren't getting paid through venmo and cheating uncle sam. It's people barely making ends meet.

Except that is less a tax enforcement phenomenon than it is a tax policy phenomenon. The IRS didn't invent carried interest, trusts, preferential capital gains rates, tax-free municipal bonds and the other tools billionaires use to reduce their taxable income. Congress did.

https://www.cnbc.com/2022/05/17/super-wealthy-irs-tax-audits-plunge-over-decade-government-report-says.html Why not both? Some of the tools used are probably a step too far, but the IRS doesn't have the resources to actually fight if there is a white shoe law firm sitting on the other side of an audit

That was tax policy, too. The policy of Republicans when they controlled governments.

It's no secret the IRS has been deprived of resources.

But it's also important to remember that many of the "loopholes" that the super wealthy use are not only perfectly legal but were deliberately created.

The IRS does catch a lot of flack for going after fraud associated with the Earned Income Tax Credit, but that's actually a pretty rationale thing to do given the billions at stake and the outright fraud that it attracts.

Every other year UBS or Credit Suisse is settling tax fraud cases with the IRS. There are never any real penalties. Illegal products are being offered, but the clients can pretend they relied on guidance from licenses professionals. The odds are that the majority will never be investigated or caught.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it became effective Jan 2022. So you can expect a 1099 from Venmo, PayPal, etc. in the next couple of months if you made over $600 on them this year.

I didn't, no small business here, but other people who have little side hustles will suffer. Although I see the point.

Doing by the book is not suffering. You pay tax because you are supposed to pay tax.

But the principal of the thing is that billionaires pay almost none of their fair share, yet people who are just trying to pay the rent are going to have a harder time doing so. You see how this sucks, right? People making 6 figures aren't getting paid through venmo and cheating uncle sam. It's people barely making ends meet.

Except that is less a tax enforcement phenomenon than it is a tax policy phenomenon. The IRS didn't invent carried interest, trusts, preferential capital gains rates, tax-free municipal bonds and the other tools billionaires use to reduce their taxable income. Congress did.

https://www.cnbc.com/2022/05/17/super-wealthy-irs-tax-audits-plunge-over-decade-government-report-says.html Why not both? Some of the tools used are probably a step too far, but the IRS doesn't have the resources to actually fight if there is a white shoe law firm sitting on the other side of an audit

That was tax policy, too. The policy of Republicans when they controlled governments.

It's no secret the IRS has been deprived of resources.

But it's also important to remember that many of the "loopholes" that the super wealthy use are not only perfectly legal but were deliberately created.

The IRS does catch a lot of flack for going after fraud associated with the Earned Income Tax Credit, but that's actually a pretty rationale thing to do given the billions at stake and the outright fraud that it attracts.

Also no one claiming it can afford a lawyer, so win win for the IRS.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it became effective Jan 2022. So you can expect a 1099 from Venmo, PayPal, etc. in the next couple of months if you made over $600 on them this year.

I didn't, no small business here, but other people who have little side hustles will suffer. Although I see the point.

Doing by the book is not suffering. You pay tax because you are supposed to pay tax.

But the principal of the thing is that billionaires pay almost none of their fair share, yet people who are just trying to pay the rent are going to have a harder time doing so. You see how this sucks, right? People making 6 figures aren't getting paid through venmo and cheating uncle sam. It's people barely making ends meet.

Except that is less a tax enforcement phenomenon than it is a tax policy phenomenon. The IRS didn't invent carried interest, trusts, preferential capital gains rates, tax-free municipal bonds and the other tools billionaires use to reduce their taxable income. Congress did.

https://www.cnbc.com/2022/05/17/super-wealthy-irs-tax-audits-plunge-over-decade-government-report-says.html Why not both? Some of the tools used are probably a step too far, but the IRS doesn't have the resources to actually fight if there is a white shoe law firm sitting on the other side of an audit

That was tax policy, too. The policy of Republicans when they controlled governments.

It's no secret the IRS has been deprived of resources.

But it's also important to remember that many of the "loopholes" that the super wealthy use are not only perfectly legal but were deliberately created.

The IRS does catch a lot of flack for going after fraud associated with the Earned Income Tax Credit, but that's actually a pretty rationale thing to do given the billions at stake and the outright fraud that it attracts.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I think it became effective Jan 2022. So you can expect a 1099 from Venmo, PayPal, etc. in the next couple of months if you made over $600 on them this year.

I didn't, no small business here, but other people who have little side hustles will suffer. Although I see the point.

Doing by the book is not suffering. You pay tax because you are supposed to pay tax.

But the principal of the thing is that billionaires pay almost none of their fair share, yet people who are just trying to pay the rent are going to have a harder time doing so. You see how this sucks, right? People making 6 figures aren't getting paid through venmo and cheating uncle sam. It's people barely making ends meet.

Except that is less a tax enforcement phenomenon than it is a tax policy phenomenon. The IRS didn't invent carried interest, trusts, preferential capital gains rates, tax-free municipal bonds and the other tools billionaires use to reduce their taxable income. Congress did.

https://www.cnbc.com/2022/05/17/super-wealthy-irs-tax-audits-plunge-over-decade-government-report-says.html Why not both? Some of the tools used are probably a step too far, but the IRS doesn't have the resources to actually fight if there is a white shoe law firm sitting on the other side of an audit