# New 1099 reporting requirements that will effect renters



## bweltsch (Oct 6, 2021)

This might also might upset some of the renters.

"Over the years, questions have arisen about whether Form 1099-K reporting for third party networks involve transactions other than goods or services.  Although the definition of third party payment network has always been limited to an agreement or arrangement to settle transactions for the provisions of goods and services, the definition of a third party network transaction included “any transaction which is settled through a third party payment network.”  This raised some question regarding whether payments for royalties or rents for other type of transactions that were settled through a third party payment network were nonetheless reportable under section 6050W.  The law makes clear that such payments remain reportable on Form 1099-MISC (Miscellaneous Information), and only transactions for goods and services settled through a third party network transaction are reportable on Form 1099-K."

This include Pay Pal, Venmo, eBay. Etse, or any electronic payment processing platform.

The new law replaces the previous requirement to report transactions over $20,000 with a single $600 reporting threshold effective for 2022.  Accordingly, a single transaction for more than $600 settled through a TPSO will now be reportable as will multiple transactions that total more than $600.


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## CPNY (Oct 6, 2021)

bweltsch said:


> This include Pay Pal, Venmo, eBay. Etse, or any electronic payment processing platform.
> 
> The new law replaces the previous requirement to report transactions over $20,000 with a single $600 reporting threshold effective for 2022.  Accordingly, a single transaction for more than $600 settled through a TPSO will now be reportable as will multiple transactions that total more than $600.


Help me understand. So if I book a trip for 2 friends including myself totaling $3,000 and they each “venmo” me $1000, I have to report that?


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## troy12n (Oct 7, 2021)

CPNY said:


> Help me understand. So if I book a trip for 2 friends including myself totaling $3,000 and they each “venmo” me $1000, I have to report that?



"Help me find a loophole in this new law so I don't have to pay taxes"


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## bogey21 (Oct 7, 2021)

CPNY said:


> Help me understand. So if I book a trip for 2 friends including myself totaling $3,000 and they each “venmo” me $1000, I have to report that?


Maybe you should use Bitcoin or another crypto...

George


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## troy12n (Oct 7, 2021)

bogey21 said:


> Maybe you should use Bitcoin or another crypto...
> 
> George



Maybe they should just comply with the law instead of trying to hide income?


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## bogey21 (Oct 7, 2021)

troy12n said:


> Maybe they should just comply with the law instead of trying to hide income?


To each his own...

George

PS All I have personally  is Pension and Social Security Income which are correctly reported....


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## Eric B (Oct 7, 2021)

CPNY said:


> Help me understand. So if I book a trip for 2 friends including myself totaling $3,000 and they each “venmo” me $1000, I have to report that?



The issue OP suggests is that Venmo would report it.  Whether you would have to report it would likely depend on the circumstances.  If it were a rental arrangement, and the money were rents being paid to you, that would have always been considered income and reportable with some exceptions under normal tax regulations/laws.  In the circumstances you describe, I'm not sure that you would need to report receiving the $1,000 payment of their share for a joint trip because it sure doesn't sound like a rental to me and you don't seem to be acting as a third-party network.  The result might be that the IRS has a 1099-misc indicating you received a payment or payments from someone for something without any indication of what that payment was for - you might get asked about it if you're audited, but eventually they would probably be best off figuring out that they don't need to know about every person that gets >$600 in a year from one other individual since they don't have the resources too link those payments to underlying transactions.


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## dioxide45 (Oct 7, 2021)

troy12n said:


> "Help me find a loophole in this new law so I don't have to pay taxes"


I think it may be more an issue of a reporting burden for something where no income was made at all. A trip costs $3000 for three people. One person pays the entire cost and the other two Venmo $1000 to the person that paid the upfront cost. That person now has to somehow report the $2000 as income and explain it in some way that it isn't really income?


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## dioxide45 (Oct 7, 2021)

Eric B said:


> The issue OP suggests is that Venmo would report it.  *Whether you would have to report it would likely depend on the circumstances.*  If it were a rental arrangement, and the money were rents being paid to you, that would have always been considered income and reportable with some exceptions under normal tax regulations/laws.  In the circumstances you describe, I'm not sure that you would need to report receiving the $1,000 payment of their share for a joint trip because it sure doesn't sound like a rental to me and you don't seem to be acting as a third-party network.  The result might be that the IRS has a 1099-misc indicating you received a payment or payments from someone for something without any indication of what that payment was for - you might get asked about it if you're audited, but eventually they would probably be best off figuring out that they don't need to know about every person that gets >$600 in a year from one other individual since they don't have the resources too link those payments to underlying transactions.


I suspect if it is getting reported to the IRS on a 1099-MISC, it has to be accounted for somewhere on your tax return or it could trigger an audit.


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## Eric B (Oct 7, 2021)

dioxide45 said:


> I think it may be more an issue of a reporting burden for something where no income was made at all. A trip costs $3000 for three people. One person pays the entire cost and the other two Venmo $1000 to the person that paid the upfront cost. That person now has to somehow report the $2000 as income and explain it in some way that it isn't really income?
> 
> Is this change part of the reconciliation bill that has yet to find its way through the Congress?



OP didn't provide a source for the quote posted.  A quick search of the first sentence shows that it was here:









						American Rescue Plan Act Clarifies Scope of Form 1099-K Reporting and Reduces De Minimis Threshold
					

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (the “ARPA”) into law.  The ARPA includes clarifying language regarding the




					www.twrblog.com
				






dioxide45 said:


> I suspect if it is getting reported to the IRS on a 1099-MISC, it has to be accounted for somewhere on your tax return or it could trigger an audit.



That's a possibility, or course.  Lately, the IRS hasn't been funded to conduct audits of everything that could trigger one, though.

This seems to me like another example where a law was passed attempting to clarify something that didn't have a good chance to clarify it because the authors didn't take into account the potential unintended consequences.  A superficial read of the discussion of the requirements on the blog that was quoted seems to me to indicate that a third party network has to choose between issuing a 1099-K or a 1099-misc based on the reason for a transfer taking place, but third party networks typically don't have that information, particularly for people getting together to go on a trip as suggested by @CPNY and pooling the money to pay for it using Venmo.

I don't do a lot of timeshare renting, though I have done some, but on the receiving end of a fund transfer I have never been asked what the money was for.  I do understand my reporting obligations and will do so, but would hate to be in the position of Venmo, et al., trying to pick the right form to file without the background information needed (according to the Covington post); my bet is that they would file 1099-Ks unless someone directly told them voluntarily that it was for royalties or rents - I've rarely sent money myself as opposed to receiving it and don't recall even having that as an option.  Maybe someone with more experience doing that sort of transaction could chime in on what the third party networks ask for transactions.  In any case, I kind of feel like the IRS is going to start being flooded with 1099-Ks and won't really know what to do with them proactively.  They're more likely to continue using other audit triggers and using them as a source of things to ask questions about if an audit is triggered elsewhere rather than doing one for every unmatched funds transfer.


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## bogey21 (Oct 7, 2021)

I'm not sure we understand what is being proposed.  I don't see it as 1099s being issued but rather Banks and other Money Transfer operations being required to transmit all dollar transactions over $600 to the IRS.  What the hundreds of new IRS Agents being proposed would do with this information is pure speculation.  My guess is that if this moves forward, the amount will end up being higher than $600...

George


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## Eric B (Oct 7, 2021)

bogey21 said:


> I'm not sure we understand what is being proposed.  I don't see it as 1099s being issued but rather Banks and other Money Transfer operations being required to transmit all dollar transactions over $600 to the IRS.  What the hundreds of new IRS Agents being proposed would do with this information is pure speculation.  My guess is that if this moves forward, the amount will end up being higher than $600...
> 
> George



The issue OP posted a discussion about isn't something being proposed, it's something that was enacted already.  It does involve 1099 filings, either as 1099-Ks or 1099-miscs, specifically by third party networks, which could be the Banks and Money Transfer operations - those are the forms they use to transmit the information on the transactions to the IRS.  The amount is $600 already; it's been that amount for the 1099-misc for a while and apparently was changed to that amount for the 1099-K.


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## dioxide45 (Oct 7, 2021)

bogey21 said:


> I'm not sure we understand what is being proposed.  I don't see it as 1099s being issued but rather Banks and other Money Transfer operations being required to transmit all dollar transactions over $600 to the IRS.  What the hundreds of new IRS Agents being proposed would do with this information is pure speculation.  My guess is that if this moves forward, the amount will end up being higher than $600...
> 
> George


Companies don't file paper 1099's. They send all the information on the 1099 electronically to the IRS. But this is indeed 1099s being issued for any transaction over $600. Seemed to be buried in 600+ pages of legislation from March 2021.


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## bogey21 (Oct 7, 2021)

I looks like I am confusing this with what I believe is  a provision  in Biden's Build Back Better (or whatever it is called) $3.5 trillion proposal.  My understanding is that what is proposed is for Financial Institutions  to report all financial transactions over $600 to the IRS...

George


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## troy12n (Oct 7, 2021)

Also the banks have reporting requirements for deposits and such, I think the limit is $5000 or $10,000. 

Someone already suggested creating multiple payment for the same amount. For instance, several $4,999 deposits. 

In the banking world, that's called "stacking", and actually is a crime, or at least a finable offense. They are well aware of people trying to do this, banks look out for it, and report it because THEY can be fined as well.

Since these are electronic transactions they would be even easier to detect, and trigger audits. 

How about we just don't do shady stuff? It's income, don't try to skirt your responsibility


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## CPNY (Oct 7, 2021)

troy12n said:


> Maybe they should just comply with the law instead of trying to hide income?


Maybe you should understand the definition of income


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## paxsarah (Oct 7, 2021)

dioxide45 said:


> But this is indeed 1099s being issued for any transaction over $600.


Or a combination of transactions that total over $600 for the year. Like, I'm sure the cookie mom for my child's girl scout troop is going to get one.


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## dioxide45 (Oct 7, 2021)

bogey21 said:


> I looks like I am confusing this with what I believe is  a provision  in Biden's Build Back Better (or whatever it is called) $3.5 trillion proposal.  My understanding is that what is proposed is for Financial Institutions  to report all financial transactions over $600 to the IRS...
> 
> George


This is a separate from the proposed reporting requirements that banks would be required to perform for accounts with more than a $600 balance which was proposed as part of the reconciliation bill.


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## Sandi Bo (Oct 7, 2021)

paxsarah said:


> Or a combination of transactions that total over $600 for the year. Like, I'm sure the cookie mom for my child's girl scout troop is going to get one.


Only if she's a mega cookie Mom!


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## dioxide45 (Oct 7, 2021)

Sandi Bo said:


> Only if she's a mega cookie Mom!


With the price of the cookies these days, it doesn't take many sales to hit $600.


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## kanerf (Oct 7, 2021)

This will not pass.  Banks and credit card companies cannot handle it.


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## dioxide45 (Oct 7, 2021)

kanerf said:


> This will not pass.  Banks and credit card companies cannot handle it.


It already passed in March 2021.


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## Eric B (Oct 7, 2021)

kanerf said:


> This will not pass.  Banks and credit card companies cannot handle it.



... too late....


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## CPNY (Oct 7, 2021)

dioxide45 said:


> With the price of the cookies these days, it doesn't take many sales to hit $600.


I ordered chocolate chip cookies from a small baker called bakers recovery and they were expensive but so worth it. They had these chocolate cookies with chocolate chips, peanut butter, marshmallows, and a pretzel. The regular chocolate chip cookies were so thin but so addicting. I ended up using two of them to make an ice cream sandwich. Ahh I need to put another order in haha


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## emeryjre (Oct 7, 2021)

Have any of these proposals been implemented and made binding yet?


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## Eric B (Oct 7, 2021)

CPNY said:


> I ordered chocolate chip cookies from a small baker called bakers recovery and they were expensive but so worth it. They had these chocolate cookies with chocolate chips, peanut butter, marshmallows, and a pretzel. The regular chocolate chip cookies were so thin but so addicting. I ended up using two of them to make an ice cream sandwich. Ahh I need to put another order in haha



Don't forget to include the 1099-K!


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## troy12n (Oct 7, 2021)

kanerf said:


> This will not pass.  Banks and credit card companies cannot handle it.



Sure they can, this is trivially easy to report. A simple database query which dumps a report. 

Reporting is the easy part, what the IRS has the ability to do with it is another story, but since it's all electronic and just some tables in a database, this is easy stuff


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## Sandi Bo (Oct 7, 2021)

We cosigned for my son's car.  He pays us, we pay the car payment (just because we aren't willing to risk our credit for any reason).  So many crazy scenarios.  This is going to be fun.


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## Sandi Bo (Oct 7, 2021)

Eric B said:


> Don't forget to include the 1099-K!


Or pay cash...


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## CPNY (Oct 7, 2021)

Sandi Bo said:


> Or pay cash...


I’m sure there will be a cash shortage soon.


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## Sandy VDH (Oct 7, 2021)

I am constantly traveling with a group of friends.  We are forever sending money back and forth on Zelle to split costs on items, like lodging, transportation, venue tickets etc.  Usually one person picks up the tab and we get a copy and settle everything up by the end of the weekend.  I've not sent out more than I have gotten in as I am usually handling more of the arranging than everyone else.  But that would be insane to figure out those transactions.  Now most are well under 600 but collectively, between me and another person it could be over that. 


I had one case recently were my friend's CC would not work on a site, she needed to pay the AI fee.  So I paid her AI fee with my CC and then she Zelle me the $1200.  That is not income, it is just transfering who made the payment.


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## CPNY (Oct 7, 2021)

Sandi Bo said:


> We cosigned for my son's car.  He pays us, we pay the car payment (just because we aren't willing to risk our credit for any reason).  So many crazy scenarios.  This is going to be fun.


Well you better report your income. as someone else would say…..”maybe you should comply with the law and pay your taxes”


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## CPNY (Oct 7, 2021)

Sandy VDH said:


> I am constantly traveling with a group of friends.  We are forever sending money back and forth on Zelle to split costs on items, like lodging, transportation, venue tickets etc.  Usually one person picks up the tab and we get a copy and settle everything up by the end of the weekend.  I've not sent out more than I have gotten in as I am usually handling more of the arranging than everyone else.  But that would be insane to figure out those transactions.  Now most are well under 600 but collectively, between me and another person it could be over that.
> 
> 
> I had one case recently were my friend's CC would not work on a site, she needed to pay the AI fee.  So I paid her AI fee with my CC and then she Zelle me the $1200.  That is not income, it is just transfering who made the payment.


According to some, you should just comply and pay your taxes


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## dioxide45 (Oct 7, 2021)

emeryjre said:


> Have any of these proposals been implemented and made binding yet?


Yes, it was part of the March 11, 2021 American Rescue Plan.


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## CPNY (Oct 7, 2021)

troy12n said:


> Let me put it to you like this, in case you haven't figured it out yet...
> 
> ________ shortages, are cause by ignorance and stupidity. Specifically, strangely enough, mostly perpetuated by a single demographic
> 
> ...


Follow and Comply

You should join TUG, you’ve been around a while. But I get it, having others pay for something in order for you to use it for free is absolutely a better option.


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## b2bailey (Oct 7, 2021)

troy12n said:


> "Help me find a loophole in this new law so I don't have to pay taxes"


Why should any person pay tax on this type of transaction?


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## b2bailey (Oct 7, 2021)

bogey21 said:


> I'm not sure we understand what is being proposed.  I don't see it as 1099s being issued but rather Banks and other Money Transfer operations being required to transmit all dollar transactions over $600 to the IRS.  What the hundreds of new IRS Agents being proposed would do with this information is pure speculation.  My guess is that if this moves forward, the amount will end up being higher than $600...
> 
> George


I'm pretty sure that most 'tracking' would be done by a computer -- not an agent.


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## dioxide45 (Oct 7, 2021)

troy12n said:


> Sure they can, this is trivially easy to report. A simple database query which dumps a report.
> 
> Reporting is the easy part, what the IRS has the ability to do with it is another story, but since it's all electronic and just some tables in a database, this is easy stuff


Clearly you don't understand how much it takes for banks to report this information. We are talking databases with billions of transactions. It isn't a simple database query. Most often it requires daily batch processing to accumulate inflows, outflows and tally total transaction volume. For these companies, it will likely cost millions of dollars to implement and touch many facets of the operation. It isn't as simple as writing up a SQL query and clicking run and firing a spreadsheet off to the IRS.


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## rapmarks (Oct 7, 2021)

so the talk is go after billionaires to pay taxes, and the reality is go after the small stuff and add to the complexity of filing a tax return.


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## emeryjre (Oct 7, 2021)

Just think of how many people will be employed to make this all work.  Think of it as an employment plan for the IT departments.

Personally I know too many people that do not pay their fair share of taxes and I am not bothered by these new requirements.  My Quicken Software will have new categories for split bill repayments and the like


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## Eric B (Oct 7, 2021)

rapmarks said:


> so the talk is go after billionaires to pay taxes, and the reality is go after the small stuff and add to the complexity of filing a tax return.



That is the grim reality of poorly thought out requirements.  I had a house burn down 15 years ago, fortunately I had good insurance for the replacement cost of everything in it and the home itself.  My income tax filing that year wound up being about 2 1/2 inches thick because I had to account for the value of every single thing individually with its fair market value and the amount the insurance company gave me for it.  In the end, the hundreds of pages of attachments to my 1040 did not change my taxes in the slightest but it cost my about $20 to mail the darn thing in since I couldn't file it electronically.  Oh, it didn't trigger an audit, either.

I suspect the $600 1099-K requirement will wind up being the same - no real changes to taxes actually paid, but an awful lot of information in boxes in some warehouse next to the Ark of the Covenant.  The $600 1099-misc requirement for royalties and rents has been in place for quite a while already, by the way.


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## Eric B (Oct 7, 2021)

emeryjre said:


> Just think of how many people will be employed to make this all work.  Think of it as an employment plan for the IT departments.



Maybe Wyndham can loan them some....


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## emeryjre (Oct 7, 2021)

Eric B

Or any one of multiple sites like Vistana, Marriott, Walmart, Sam's, Costco that run at about 90% effectively.  Personally I do not blame the coders as much as the management for not reviewing all facets of a website and agonizing over the final details.  Agonizing over the "small stuff" is what made Amazon the company it is today.  IMHO


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## Eric B (Oct 7, 2021)

emeryjre said:


> Eric B
> 
> Or any one of multiple sites like Vistana, Marriott, Walmart, Sam's, Costco that run at about 90% effectively.  Personally I do not blame the coders as much as the management for not reviewing all facets of a website and agonizing over the final details.  Agonizing over the "small stuff" is what made Amazon the company it is today.  IMHO



I can't disagree with you at all.  Never worked in IT, but I have the impression that coders need good requirements/specifications in order to produce good systems.


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## KimmieM (Oct 7, 2021)

bweltsch said:


> This might also might upset some of the renters.
> 
> "Over the years, questions have arisen about whether Form 1099-K reporting for third party networks involve transactions other than goods or services.  Although the definition of third party payment network has always been limited to an agreement or arrangement to settle transactions for the provisions of goods and services, the definition of a third party network transaction included “any transaction which is settled through a third party payment network.”  This raised some question regarding whether payments for royalties or rents for other type of transactions that were settled through a third party payment network were nonetheless reportable under section 6050W.  The law makes clear that such payments remain reportable on Form 1099-MISC (Miscellaneous Information), and only transactions for goods and services settled through a third party network transaction are reportable on Form 1099-K."
> 
> ...


All income should be reported. Taxes are a small price to pay for the freedoms we have in the USA.


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## dioxide45 (Oct 7, 2021)

Eric B said:


> I suspect the $600 1099-K requirement will wind up being the same - no real changes to taxes actually paid, but an awful lot of information in boxes in some warehouse next to the Ark of the Covenant. The $600 1099-misc requirement for royalties and rents has been in place for quite a while already, by the way.


Pretty much, they are relying on the honest person who gets a 1099-K that simply not bothers figuring it out how to write off additional expenses to off set the amount to cover what I thought I read was an additional $8.5 billion in tax revenue they think this will bring them over the next 10 years.


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## Eric B (Oct 7, 2021)

KimmieM said:


> All income should be reported. Taxes are a small price to pay for the freedoms we have in the USA.



Well, reporting of income has been required for quite a long time in the USA, but it's never been all income.  There is a portion of the population that isn't even required to file a tax return because their total income was below a certain threshold set every year.  Aside from that, the subject matter that is covered by the new reporting requirements discussed in this thread goes well beyond income reporting to include all transactions via a third party payment networks whether they actually fall into what is considered income or not.


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## dioxide45 (Oct 7, 2021)

Imagine how you will report a garage sale where you perhaps bring in more than $600 via a Square account. I doubt anyone kept their receipts from all the stuff they sold so they can show a loss.


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## Eric B (Oct 7, 2021)

dioxide45 said:


> Pretty much, they are relying on the honest person who gets a 1099-K that simply not bothers figuring it out how to write off additional expenses to off set the amount to cover what I thought I read was an additional $8.5 billion in tax revenue they think this will bring them over the next 10 years.



Yep, you're probably right.  I don't think I've ever received a 1099-K; I'll have to figure out how they get included in tax filings next year if I get any.


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## Eric B (Oct 7, 2021)

dioxide45 said:


> Imagine how you will report a garage sale where you perhaps bring in more than $600 via a Square account. I doubt anyone kept their receipts from all the stuff they sold so they can show a loss.



Well, most stuff I've ever sold at a garage sale was below fair market value just to get rid of it, so even if I got more than $600 via a Square account it should be a loss, right?  Unless there are loss limitations for garage sales.


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## dioxide45 (Oct 7, 2021)

Eric B said:


> Well, most stuff I've ever sold at a garage sale was below fair market value just to get rid of it, so even if I got more than $600 via a Square account it should be a loss, right?  Unless there are loss limitations for garage sales.


The question is, how do you prove the loss? I suspect, the IRS just hopes you claim the $600 and pay the small amount of tax and be done with it.


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## KimmieM (Oct 7, 2021)

CPNY said:


> Follow and Comply
> 
> You should join TUG, you’ve been around a while. But I get it, having others pay for something in order for you to use it for free is absolutely a better option.


Tax evasion or being a dues dodger are two different situations. Taxes are required to be paid by law where joining and paying  dues to support a group are not.


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## emeryjre (Oct 7, 2021)

I see lots of new tax pubs coming this year.  Good bathroom reading, or maybe other bathroom use.


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## Ralph Sir Edward (Oct 7, 2021)

KimmieM said:


> All income should be reported. Taxes are a small price to pay for the freedoms we have in the USA.



Like the freedom to have privacy?


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## rapmarks (Oct 7, 2021)

Eric B said:


> Well, most stuff I've ever sold at a garage sale was below fair market value just to get rid of it, so even if I got more than $600 via a Square account it should be a loss, right?  Unless there are loss limitations for garage sales.


Probably same rule as timeshares sale. Pay tax on gains. No deductions for losses


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## Cyrus24 (Oct 7, 2021)

These new reporting requirements are merely a way of finding a new group of people to audit.  It won't be the billionaires, it will be the low to middle income working/retired stiff who happens to affiliate him/her self with the wrong political party.  Unless you deal strictly with cash, most everyone will go over the $600 threshold, regardless of it being income or a simple reimbursement.  Annoying nuisance audits.  Hold on, it's going to get wild after the 2022 1099-M's and 1099-K's start going out.


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## CPNY (Oct 7, 2021)

KimmieM said:


> Tax evasion or being a dues dodger are two different situations. Taxes are required to be paid by law where joining and paying  dues to support a group are not.


The two people here who want everyone to PAY taxes on money transferred between friends, are here for free. Kinda comical when you think about it.


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## emeryjre (Oct 7, 2021)

A timeshare can be sold for GAIN!!  Who would have thought.....


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## bogey21 (Oct 7, 2021)

dioxide45 said:


> Clearly you don't understand how much it takes for banks to report this information. We are talking databases with billions of transactions. It isn't a simple database query. Most often it requires daily batch processing to accumulate inflows, outflows and tally total transaction volume. For these companies, it will likely cost millions of dollars to implement and touch many facets of the operation. It isn't as simple as writing up a SQL query and clicking run and firing a spreadsheet off to the IRS.


You are right but he politicians and the IRS could care less...

George


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## Ralph Sir Edward (Oct 7, 2021)

emeryjre said:


> A timeshare can be sold for GAIN!!  Who would have thought.....



I actually did so in 2014. Bought a Marriott Royal Palms for $997 and sold it back for $2500. And I declared the profit as a long term capital gain. . .


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## Ralph Sir Edward (Oct 7, 2021)

bogey21 said:


> You are right but he politicians and the IRS could care less...
> 
> George


 Until the politicians find out they have to declare their bribes. . . .


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## emeryjre (Oct 7, 2021)

Will SuperPacs and PACs be exempt from reporting payments to recipients.


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## auntiepen (Oct 7, 2021)

I’m not sure if my situation is the same for 1099 issue.   I was warned by my cpa that I should issue 1099 to an individual  people ( gardener, housekeepers but not to corporate companies)whom I paid for work that was $600 or more. So this would make sure they will pay income tax. I told my CPA it’s ok for me not to issue them 1099.because  I don’t report these expenes. I guess if I don’t report it the IRS will never find out about it.  Just guessing. So if your renters don’t report as it is an income ( note such as RENT  via money transfer) then it’s your choice to report it or not.  I booked many timeshare for my friends and family in the past and I only asked for exchange fee , and guest certificate (RCI) from them. In my case I don’t make profit from this. So I don’t report it. I hope I am right about this


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## troy12n (Oct 7, 2021)

I guess it only truly matters if you get audited... and if you do, look out. I hear IRS auditors don't really care about soverign citizen excuses


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## HitchHiker71 (Oct 7, 2021)

*Folks - just a friendly reminder - please remember the forum rules with regard to political content.  *


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## rapmarks (Oct 7, 2021)

I pay individuals to be a companion for my husband.  When am I supposed to start issuingv1099s?


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## dioxide45 (Oct 7, 2021)

rapmarks said:


> I pay individuals to be a companion for my husband.  When am I supposed to start issuingv1099s?


If you are paying them electronically, you don't need to. If you are paying cash or check, then you should issue one if you paid them more than $600 in a calendar year.


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## chapjim (Oct 8, 2021)

CPNY said:


> Help me understand. So if I book a trip for 2 friends including myself totaling $3,000 and they each “venmo” me $1000, I have to report that?



No.  That's a reimbursement of a shared expense.  You ended up only paying for your share.  Everything else nets to zero.


----------



## rapmarks (Oct 8, 2021)

dioxide45 said:


> If you are paying them electronically, you don't need to. If you are paying cash or check, then you should issue one if you paid them more than $600 in a calendar year.


can you clarify difference between paying by check, paying through Venmo or PayPal, and paying electronically. How would I pay a cleaning lady electronically?


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## dioxide45 (Oct 8, 2021)

rapmarks said:


> can you clarify difference between paying by check, paying through Venmo or PayPal, and paying electronically. How would I pay a cleaning lady electronically?


Paying electronicall would be you paying them through Venmo, PayPal, Zelle, Square. When you do that, it is up to those companies to file a 1099-K form if they meet the threshold limits.


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## Cyrus24 (Oct 8, 2021)

CPNY said:


> Help me understand. So if I book a trip for 2 friends including myself totaling $3,000 and they each “venmo” me $1000, I have to report that?


As I understand it from my research on this matter, you will receive a 1099 from Venmo for the 2000 plus any/all other Venmo receipts during the year.  The IRS will also receive the 1099.  Since you know that all the money received were reimbursements of some sort, you will ignore the 1099.  But, to the IRS, it's income, and it will not be ignored.  If the IRS chooses to audit you, it will be on you to prove that none of the receipts were related to income of any type.  Now, we all know that the IRS will make it hard on you and force you to bring all documentation with you to meetings (days off from work).  If you fail to prove one receipt to their satisfaction, you'll be hit with penalties and taxes.

Bottom line,
-  while the concept of 1099's for receipts is good, the $600 reporting threshold is just too low for non-business entities (individul accounts).
- this new law is overreach and the IRS will abuse the new powers that they have been given.  That's what the IRS does, abuse.


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## bnoble (Oct 8, 2021)

bweltsch said:


> This might also might upset some of the renters.


I'm not sure why renters should be upset, unless they were not declaring rental income. In that case, I suppose they might be upset that they are now required to follow the law, but my sympathy for tax scofflaws is modest.

As for the rest of us: I don't see this as _that_ big of a deal. I will get a 1099-K, because we use venmo to reimburse the kids/have them reimburse us for various things at various times. Most years, that easily exceeds $600. But the app itself makes record-keeping easy, because it stores transactions, the identities of other parties, and the memo describing what it is for. It would be easy to show that these transfers were all within our family, and it would also be easy to show what they were for. An audit would be a hassle, but not much of one, and as mentioned not very likely for a whole host of reasons.


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## paxsarah (Oct 8, 2021)

Cyrus24 said:


> But, to the IRS, it's income, and it will not be ignored.


Is it “income”? Or is it simply transactions that could be income? I’m not a tax professional, but as far as I can tell “income” has a very specific definition with the IRS and I’m not convinced that anything reported on a 1099-K is automatically “income” by IRS definitions. It’s transactions.


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## bogey21 (Oct 8, 2021)

Ralph Sir Edward said:


> I actually did so in 2014. Bought a Marriott Royal Palms for $997 and sold it back for $2500. And I declared the profit as a long term capital gain. . .


Similar deal here.  In 2002 we sold our Monarch Crown Suite purchased resale about 6-7 years earlier for about a 35% profit.  Can't remember if we paid taxes or not but probably did as we received a 1099 from Marriott who sold it for us...

George


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## bogey21 (Oct 8, 2021)

This can become interesting.  Essentially all I own are 3 bank accounts JTWROS with my kids as the co-owners of the accounts.  For practical purposes the accounts are mine.  Legally they are jointly owned.  The accounts have been this way for many years.  I often transfer money (usually more than $600) from these accounts to the personal accounts of my kids.   Technically I guess this is a transfer from one account they jointly own with me to another account they jointly own with their spouses. Truthfully these transfers are usually loans or gifts from me to them.  Is the IRS going to try to ask me to explain these transfers 3 or 4 years from now...

George


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## paxsarah (Oct 8, 2021)

bogey21 said:


> Is the IRS going to try to ask me to explain these transfers 3 or 4 years from now...


Not as far as I can tell, because
(A) These don't fall under the third-party processing platforms that are the subject of the change described in the OP of this thread, and
(B) Because essentially these are simply bank transfers between two accounts owned by the same person (in this case, your kid). Unless they're happening in astronomical amounts or with shady-looking patterns, the IRS or any other regulator wouldn't bat an eye. These are mundane, run-of-the-mill transactions that happen by the millions.

Edit: However, if they are gifts and approach the gift tax limit, you may want to talk to your tax professional about whether you're handling them correctly.


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## JeffC (Oct 8, 2021)

Can't speak for Venmo but Zelle is adding a step in the payment process to classify the transaction as a payment for goods/services or not. If the sender designates it as for "goods/services" it will be included in the calculations for a 1099-K. If not it won't. This makes it imperative that if you're on the receiving end of the transaction you inform the sender of this. Using the OP as an example, he's receiving $2000 in reimbursements. If the senders classify the transaction wrong, he's liable for the taxes on that amount. Assuming he's in the 22-24% range, that's $440-480 in Federal taxes. AFAIK ther's no process for fixing erroneous 1099-K's.


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## KimmieM (Oct 8, 2021)

Ralph Sir Edward said:


> Like the freedom to have privacy?





troy12n said:


> I guess it only truly matters if you get audited... and if you do, look out. I hear IRS auditors don't really care about soverign citizen excuses


I heard this piece of advice from a very wealth man.If you have never been audited your paying to much in taxes. @Ralph Sir Edward  I feel not paying dues is a freedom of choice.  Privacy to some extent was lost along time ago to cell phone videos, recordings and security cameras.


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## chapjim (Oct 8, 2021)

paxsarah said:


> Is it “income”? Or is it simply *transactions that could be income*? I’m not a tax professional, but as far as I can tell “income” has a very specific definition with the IRS and I’m not convinced that anything reported on a 1099-K is automatically “income” by IRS definitions. It’s transactions.



*This.*  It is not a payment for services.

A short IRS story.  I worked for a pitiful company for almost five years, doing work I liked (and had been doing since 2007 and continued doing until I retired last week).  In 2016, I received a letter from the IRS saying I owed the government over $34,000 from tax year 2014.  The amount was $32,640 plus interest.  Letters like this get your attention!

When I got home, I pulled my tax file for that year and the amount in Block 2 (Federal Income Tax Withheld) of the W-2 was $32,640.  I sent a letter to the IRS suggesting their issue was with my employer, not me.  A couple of weeks later, I received another letter from the IRS saying the amount owed was $0.

My only question was why did the IRS contact me when it was obvious that my employer had not forwarded funds that were withheld.


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## dioxide45 (Oct 8, 2021)

paxsarah said:


> (B) Because essentially these are simply bank transfers between two accounts owned by the same person (in this case, your kid). Unless they're happening in astronomical amounts or with shady-looking patterns, the IRS or any other regulator wouldn't bat an eye. These are mundane, run-of-the-mill transactions that happen by the millions.


If they are so mundane, why does the IRS want to know about them?


----------



## Eric B (Oct 8, 2021)

dioxide45 said:


> If they are so mundane, why does the IRS want to know about them?



My thought is the development of big data sets that can be mined for insights to trigger audits/enforcement.  But I'm just being paranoid.


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## rapmarks (Oct 8, 2021)

dioxide45 said:


> Paying electronicall would be you paying them through Venmo, PayPal, Zelle, Square. When you do that, it is up to those companies to file a 1099-K form if they meet the threshold limits.


Oh I see. Thanks


----------



## paxsarah (Oct 8, 2021)

dioxide45 said:


> If they are so mundane, why does the IRS want to know about them?


I don't think the IRS does want to know about them. The scenario posed by @bogey21 isn't subject to the new IRS reporting requirements as explained in the OP. They are mundane, small-dollar, normal bank transfers between accounts owned by the same person. I'm pretty sure they're not being reported to the IRS at all for any reason.


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## bogey21 (Oct 8, 2021)

paxsarah said:


> They are mundane, small-dollar, normal bank transfers between accounts owned by the same person. I'm pretty sure they're not being reported to the IRS at all for any reason.



Transfers are not small.  Agree they are not being reported to the IRS now.  But if/when the IRS hires thousands of new agents, who knows...

George


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## bnoble (Oct 8, 2021)

JeffC said:


> If the senders classify the transaction wrong, he's liable for the taxes on that amount.


Not if he can demonstrate that the sender was in error.



KimmieM said:


> I feel not paying dues is a freedom of choice.


Do you mean not paying taxes, or are you referring to something else when you say "dues"?


----------



## dioxide45 (Oct 8, 2021)

paxsarah said:


> I don't think the IRS does want to know about them. The scenario posed by @bogey21 isn't subject to the new IRS reporting requirements as explained in the OP. They are mundane, small-dollar, normal bank transfers between accounts owned by the same person. I'm pretty sure they're not being reported to the IRS at all for any reason.


I get it. The new changes don't impact bank transfers. But if those funds were sent via services like Venmo or Zelle, they would be reported.


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## paxsarah (Oct 8, 2021)

bogey21 said:


> Transfers are not small.  Agree they are not being reported to the IRS now.  But if/when the IRS hires thousands of new agents, who knows...


If they're not small, then as I mentioned in an earlier post you may want to check with your tax preparer on any implications with regard to the gift tax. (There may be none, as the accounts technically share a common owner, but it's always better to be safe than sorry.) However, my point still stands that they are bank transfers and not subject to the 1099-K reporting requirements as explained in the OP. Even if the IRS gets thousands of new agents, your bank transfers don't appear to be subject to this reporting, so they still won't care.


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## paxsarah (Oct 8, 2021)

dioxide45 said:


> I get it. The new changes don't impact bank transfers. But if those funds were sent via services like Venmo or Zelle, they would be reported.


They might be. I'm still not clear (and googling hasn't helped) on whether transactions marked as "friends and family" rather than "goods and services" are subject to this reporting. If friends and family transfers aren't subject to reporting, than many of the scenarios here (paying back someone who paid for a group vacation, sending some cash to family members) wouldn't trigger the issuing of a 1099-K. But I haven't been able to really figure that out. Regardless, even if they're reported it doesn't necessarily mean that they're subject to tax, if they aren't actually income.


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## KimmieM (Oct 8, 2021)

bnoble said:


> Not if he can demonstrate that the sender was in error.
> 
> 
> Do you mean not paying taxes, or are you referring to something else when you say "dues"?


Membership dues


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## Ralph Sir Edward (Oct 8, 2021)

KimmieM said:


> I heard this piece of advice from a very wealth man.If you have never been audited your paying to much in taxes. @Ralph Sir Edward  I feel not paying dues is a freedom of choice.  Privacy to some extent was lost along time ago to cell phone videos, recordings and security cameras.



You may not care about personal privacy, but I do.

By the way, when are you going to install a 24/7 camera in your bedroom?


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## paxsarah (Oct 8, 2021)

paxsarah said:


> They might be. I'm still not clear (and googling hasn't helped) on whether transactions marked as "friends and family" rather than "goods and services" are subject to this reporting. If friends and family transfers aren't subject to reporting, than many of the scenarios here (paying back someone who paid for a group vacation, sending some cash to family members) wouldn't trigger the issuing of a 1099-K. But I haven't been able to really figure that out. Regardless, even if they're reported it doesn't necessarily mean that they're subject to tax, if they aren't actually income.


Okay, so googling more has helped after all. The provision in the law specifically states that the reporting is for transactions regarding goods and services, not transfers for personal reasons.* I don't know if every electronic payment platform has a goods and services vs. friends and family designation (I know PayPal does, for example, as I've used it most often). So most of the scenarios speculated about here that involve personal transfers and not goods and services shouldn't be subject to the new reporting if the service allows the sender to make that designation of friends/family/personal. Even if your payment service doesn't make that distinction, it doesn't change your (lack of) tax liability for a personal transfer.

And back to the OP's original point of this being an issue for renters - it only would be an issue for someone who wasn't properly reporting rental income anyway. The issuance of a 1099 doesn't change your tax liability, it only reports your transactions to the IRS.



*Here's the publication I found that's as close to the source material as I could find: https://www.jct.gov/publications/2021/technical-explanation-of-section-9674-of-hr-1319/ (it's a PDF and you have to click "Download now"). The relevant section is on the last page:



> Third party network transactions include any commercial transactions settled through a third party payment network. The provision also clarifies that third party network transactions only include transactions for the provision of goods or services (*e.g., personal gifts, charitable contributions, and reimbursements are not included*). *For example, an individual who has registered for a mobile payment service and uses such a service to reimburse friends or relatives for expenses, or on occasion sells a used item to another person, would not be engaging in transactions that are subject to reporting requirements.* However, if that individual were to register with such mobile payment service for the purposes of engaging in commercial transactions, such as regularly carrying on a trade or business through use of that service, the mobile payment service would be required to report under the provision.


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## CPNY (Oct 8, 2021)

Cyrus24 said:


> These new reporting requirements are merely a way of finding a new group of people to audit.  It won't be the billionaires, it will be the low to middle income working/retired stiff who happens to affiliate him/her self with the wrong political party.  Unless you deal strictly with cash, most everyone will go over the $600 threshold, regardless of it being income or a simple reimbursement.  Annoying nuisance audits.  Hold on, it's going to get wild after the 2022 1099-M's and 1099-K's start going out.


Right, this is a much bigger issue than


Cyrus24 said:


> As I understand it from my research on this matter, you will receive a 1099 from Venmo for the 2000 plus any/all other Venmo receipts during the year.  The IRS will also receive the 1099.  Since you know that all the money received were reimbursements of some sort, you will ignore the 1099.  But, to the IRS, it's income, and it will not be ignored.  If the IRS chooses to audit you, it will be on you to prove that none of the receipts were related to income of any type.  Now, we all know that the IRS will make it hard on you and force you to bring all documentation with you to meetings (days off from work).  If you fail to prove one receipt to their satisfaction, you'll be hit with penalties and taxes.
> 
> Bottom line,
> -  while the concept of 1099's for receipts is good, the $600 reporting threshold is just too low for non-business entities (individul accounts).
> - this new law is overreach and the IRS will abuse the new powers that they have been given.  That's what the IRS does, abuse.


This is why I asked the question I did. It’s time to start saving every receipt. I already receive plenty of 1099-Misc forms as an independent contractor. I get paid by PayPal from one client I work for, that will be double 1099 forms to file. Well, time to write off even more than I do now. Or I can use Venmo as payment for everything and show that I’ve spent more through venmo than I’ve received and claim it as a business loss


----------



## troy12n (Oct 8, 2021)

Or you can just explain your shenanigans to the IRS Auditor, i'm sure they are very understanding.


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## chapjim (Oct 8, 2021)

troy12n said:


> Or you can just explain your shenanigans to the IRS Auditor, i'm sure they are very understanding.



OP involved no shenanigans.  No one provided any goods or services.  No one has income to report or expenses to claim.


----------



## spackler (Oct 8, 2021)

This new surveillance system sounds like a mess, honestly.  

Bitcoin/Monero payments will definitely become more popular if this passes.


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## Cyrus24 (Oct 8, 2021)

paxsarah said:


> Or is it simply transactions that could be income?


I'm not a tax professional, either, but, what is the difference between income or could be income to the IRS?  Since it could be income, the IRS would have reason to audit you if you don't report it.  If the IRS calls your number, you'd have to prove that it was not income.  Best thing to do would be to stop receiving funds via Venmo and Paypal.  Take cash or take checks in amounts under $600.  The IRS will be looking under every rock for revenue and these 1099K's will provide the IRS with a whole bunch of rocks.


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## Cyrus24 (Oct 8, 2021)

paxsarah said:


> Regardless, even if they're reported it doesn't necessarily mean that they're subject to tax, if they aren't actually income.


But, the fact that they're reported means that they could become cause for an audit if not accounted for on your tax return.


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## Cyrus24 (Oct 8, 2021)

spackler said:


> This new surveillance system sounds like a mess, honestly.


A mess for the everyday smuck.  A field day for the IRS and the auditors we are paying for.


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## dioxide45 (Oct 8, 2021)

Unreported 1099 and W2 income pretty much generates an automatic letter from the IRS. If the sum of what you claim on your return is less than the sum of all those 1099s and W2s, expect to hear from the IRS. It may not be an audit, but you will need to provide an explanation or file an amended return.


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## HitchHiker71 (Oct 11, 2021)

paxsarah said:


> They might be. I'm still not clear (and googling hasn't helped) on whether transactions marked as "friends and family" rather than "goods and services" are subject to this reporting. If friends and family transfers aren't subject to reporting, than many of the scenarios here (paying back someone who paid for a group vacation, sending some cash to family members) wouldn't trigger the issuing of a 1099-K. But I haven't been able to really figure that out. Regardless, even if they're reported it doesn't necessarily mean that they're subject to tax, if they aren't actually income.



Curious.  Paypal has had the "Goods & Services" vs "Friends & Family" option for a while now.  Sounds like other payment services are catching up.  If the "Goods & Services" type payments are effectively becoming taxable events that will be vendor reported to the IRS - one feature I don't believe exists that should exist is for the recipient to have the ability to validate via an "accept/deny" option whether an incoming payment is categorized correctly.  It's not acceptable to me to allow the sender of the payment to unilaterally categorize the money being sent without allowing the recipient the ability to deny acceptance - especially if/when a taxable event that will be reported by the payment vendor to the IRS is concerned.  Perhaps I'm behind the times and this type of option already exists, but I don't recall seeing it in the past.


----------



## rapmarks (Oct 11, 2021)

HitchHiker71 said:


> Curious.  Paypal has had the "Goods & Services" vs "Friends & Family" option for a while now.  Sounds like other payment services are catching up.  If the "Goods & Services" type payments are effectively becoming taxable events that will be vendor reported to the IRS - one feature I don't believe exists that should exist is for the recipient to have the ability to validate via an "accept/deny" option whether an incoming payment is categorized correctly.  It's not acceptable to me to allow the sender of the payment to unilaterally categorize the money being sent without allowing the recipient the ability to deny acceptance - especially if/when a taxable event that will be reported by the payment vendor to the IRS is concerned.  Perhaps I'm behind the times and this type of option already exists, but I don't recall seeing it in the past.


There is a charge for goods and services by PayPal, they do not charge for friends and family.  I don’t see why the irs would get involved with friends or family, but a renter might be adverse to sending money as friends and family


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## CPNY (Oct 11, 2021)

Eric B said:


> My thought is the development of big data sets that can be mined for insights to trigger audits/enforcement.  But I'm just being paranoid.


Maybe that’s what is wanted, everyone to be paranoid.


----------



## Eric B (Oct 11, 2021)

CPNY said:


> Maybe that’s what is wanted, everyone to be paranoid.



Just because I'm paranoid doesn't mean they aren't out to get me....


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## bnoble (Oct 11, 2021)

HitchHiker71 said:


> It's not acceptable to me to allow the sender of the payment to unilaterally categorize the money being sent without allowing the recipient the ability to deny acceptance



I presume you can reject/refund a mis-categorized payment.


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## jebloomquist (Oct 12, 2021)

So let me understand, If one of my kids loses a job and I send $5,000 to help until a new job is gotten, somebody will have to pay taxes on that $5,000? How does the government or any financial institution know if I sold something or was just giving the money? Who creates the 1099 type form?

This situation happened to me My son bought a bit coin for $7,500 and gave it to me. I wanted to give it back, but I couldn't figure out how to do it, so I sold it for $7,500 and sent him the money. Some here say, "just follow the law." There was no profit here. Will somebody have to pay tax on the $7,500? Will there be a 1099 form created? This is crazy.

I think that we are living in "build bullsh!t better."


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## Cyrus24 (Oct 12, 2021)

jebloomquist said:


> So let me understand, If one of my kids loses a job and I send $5,000 to help until a new job is gotten, somebody will have to pay taxes on that $5,000? How does the government or any financial institution know if I sold something or was just giving the money? Who creates the 1099 type form?
> 
> This situation happened to me My son bought a bit coin for $7,500 and gave it to me. I wanted to give it back, but I couldn't figure out how to do it, so I sold it for $7,500 and sent him the money. Some here say, "just follow the law." There was no profit here. Will somebody have to pay tax on the $7,500? Will there be a 1099 form created? This is crazy.
> 
> I think that we are living in "build bullsh!t better."


Send him a check, or cash.  Starting in 2022, money received via an app (Venmo/PayPal) may trigger a 1099.  In your scenario it would most likely not be taxable but the IRS could still ask your son to prove that it’s was a reimbursement or a gift versus income.

Agree, this is a bunch of crap.


----------



## CPNY (Oct 12, 2021)

jebloomquist said:


> So let me understand, If one of my kids loses a job and I send $5,000 to help until a new job is gotten, somebody will have to pay taxes on that $5,000? How does the government or any financial institution know if I sold something or was just giving the money? Who creates the 1099 type form?
> 
> This situation happened to me My son bought a bit coin for $7,500 and gave it to me. I wanted to give it back, but I couldn't figure out how to do it, so I sold it for $7,500 and sent him the money. Some here say, "just follow the law." There was no profit here. Will somebody have to pay tax on the $7,500? Will there be a 1099 form created? This is crazy.
> 
> I think that we are living in "build bullsh!t better."


Yea, some here do say “just follow the law”. Better yet, they’ve gone as far as calling anyone who pushes back a tax evading criminal. Some people.


----------



## needhelp (Oct 12, 2021)

paxsarah said:


> Okay, so googling more has helped after all. The provision in the law specifically states that the reporting is for transactions regarding goods and services, not transfers for personal reasons.* I don't know if every electronic payment platform has a goods and services vs. friends and family designation (I know PayPal does, for example, as I've used it most often). So most of the scenarios speculated about here that involve personal transfers and not goods and services shouldn't be subject to the new reporting if the service allows the sender to make that designation of friends/family/personal. Even if your payment service doesn't make that distinction, it doesn't change your (lack of) tax liability for a personal transfer.
> 
> And back to the OP's original point of this being an issue for renters - it only would be an issue for someone who wasn't properly reporting rental income anyway. The issuance of a 1099 doesn't change your tax liability, it only reports your transactions to the IRS.
> 
> ...


Thanks for adding the information about transactions regarding goods and services. So this change will not affect most people.
The new law will also still not "catch" alot of people that under report income. If someone rents from a stranger, they will probably mark the payment as goods and services. If they are paying their hairdresser or house cleaning person, they will mark as personal - if the person asks them to.


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## troy12n (Oct 12, 2021)

jebloomquist said:


> So let me understand, If one of my kids loses a job and I send $5,000 to help until a new job is gotten, somebody will have to pay taxes on that $5,000? How does the government or any financial institution know if I sold something or was just giving the money? Who creates the 1099 type form?
> 
> This situation happened to me My son bought a bit coin for $7,500 and gave it to me. I wanted to give it back, but I couldn't figure out how to do it, so I sold it for $7,500 and sent him the money. Some here say, "just follow the law." There was no profit here. Will somebody have to pay tax on the $7,500? Will there be a 1099 form created? This is crazy.
> 
> I think that we are living in "build bullsh!t better."



There are yearly and lifetime limits to the amount of money someone can send someone who is a family member. Those tax laws aren't changing and have existed for decades. If a form may be required or not may be the only difference. The intent of this law seems to be (rightly so) people running businesses (yes, i'm looking at you mega renters) who aren't paying taxes...


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## bnoble (Oct 12, 2021)

jebloomquist said:


> If one of my kids loses a job and I send $5,000 to help until a new job is gotten, somebody will have to pay taxes on that $5,000?


No. The rules on gifting haven't changed.








						The Lifetime Exemption for Federal Gift Taxes
					

The lifetime exemption from gift taxes lets you give away millions of dollars in your lifetime free of the gift tax. Learn how it works and how it impacts estate taxes.




					www.thebalance.com


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## paxsarah (Oct 12, 2021)

CPNY said:


> Yea, some here do say “just follow the law”. Better yet, they’ve gone as far as calling anyone who pushes back a tax evading criminal. Some people.


In this case, following the law would mean not needing to pay taxes on a personal reimbursement such as that. I've posted in this thread the official federal explanation of the law, which specifically states that personal reimbursements are not subject to the new reporting requirement, let alone qualify as income. If it wasn't taxable before, it's not taxable now (at least as far as the reporting requirements that were the basis for the OP are concerned - there may be new tax laws that aren't related to the reporting requirements in the OP, but I'm not a tax professional and I'm not talking about the entire tax code).


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## emeryjre (Oct 19, 2021)

New proposals, back to the drawing board!

Democrats to scale back Treasury’s IRS bank reporting plan amid GOP uproar (msn.com)


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## bogey21 (Oct 19, 2021)

My guess is that if this get implemented the Government will require more categories than just Goods and Services or Friends an Family.  My guess, just a wild ass guess, is that there could be between 5 an 10.   One of the real downsides to this is it would give the IRS to ability to nail you for choosing the wrong category for a transaction...

George


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## Eric B (Oct 19, 2021)

emeryjre said:


> New proposals, back to the drawing board!
> 
> Democrats to scale back Treasury’s IRS bank reporting plan amid GOP uproar (msn.com)



That article reads as though the proposal is unrelated to the 1099 requirement that was included in the law discussed in the article originally posted.  The 1099 requirement (which is already in the Tax Code as a result of a law that was passed and signed) is for provision of information by third-party financial networks transmitting funds.  The new proposal discussed in the article linked is about changes to a "proposed requir[ement] for financial institutions to provide the Internal Revenue Service with additional information on bank accounts with more than $600 in annual deposits or withdrawals."

It's a bit tough getting up the energy to head back to the drawing board for everything someone proposes in the House, so I'll just wait until it actually becomes a law if that ever happens.


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## dioxide45 (Oct 19, 2021)

bogey21 said:


> My guess is that if this get implemented the Government will require more categories than just Goods and Services or Friends an Family.  My guess, just a wild ass guess, is that there could be between 5 an 10.   One of the real downsides to this is it would give the IRS to ability to nail you for choosing the wrong category for a transaction...
> 
> George


This is already implemented.


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## dioxide45 (Oct 19, 2021)

bogey21 said:


> My guess is that if this get implemented the Government will require more categories than just Goods and Services or Friends an Family.  My guess, just a wild ass guess, is that there could be between 5 an 10.   One of the real downsides to this is it would give the IRS to ability to nail you for choosing the wrong category for a transaction...
> 
> George


This is unrelated to this thread. The article you linked is discussing the previous requirement to report inflow and outflow of all bank accounts that had over a $600 balance during the year. This thread is based on 1099 reporting of third party payment processors like Zelle, Venmo and Paypal.


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## rapmarks (Oct 19, 2021)

Airbnb sent me form to fill out for withholding on all payouts


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## emeryjre (Oct 19, 2021)

OK, my bad


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