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1099-K (1 Viewer)

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Footballguy
I hope this doesn't get to0 political but wanted everyone to be aware of this.  If you conduct transactions through Paypal, Venmo or selling stuff through Ebay or other 3rd party sites they will now be issuing you a 1099-K for payments in excess of $600.  It used to be $20,000.  Payments to friends and family are supposed to be excluded but we'll see on that.  I get it the government wants to crack down on tax cheats but $600 is ridiculously low.  A friend of mine resold concert tickets to a covid rescheduled concert she can no longer attend. Sold them at a small loss through Ticketmaster and they are asking for her social security number to complete the transaction.  Now she has to give someone who really has no business having her social and has extra tax forms for a small transaction.  Be weary I'm sure this will impact a bunch of people in here.

 
I hope this doesn't get to0 political but wanted everyone to be aware of this.  If you conduct transactions through Paypal, Venmo or selling stuff through Ebay or other 3rd party sites they will now be issuing you a 1099-K for payments in excess of $600.  It used to be $20,000.  Payments to friends and family are supposed to be excluded but we'll see on that.  I get it the government wants to crack down on tax cheats but $600 is ridiculously low.  A friend of mine resold concert tickets to a covid rescheduled concert she can no longer attend. Sold them at a small loss through Ticketmaster and they are asking for her social security number to complete the transaction.  Now she has to give someone who really has no business having her social and has extra tax forms for a small transaction.  Be weary I'm sure this will impact a bunch of people in here.
StubHub asked for mine, too.  So far I haven't given it to them.  We'll see how this plays out.

If they're going to report the proceeds to the IRS, then I should be able to report my cost and deduct any losses, too, right?  Like when I have to sell my $90 Bucks season tickets for $25 because they're playing Detroit and half the team is out with Covid?

 
StubHub asked for mine, too.  So far I haven't given it to them.  We'll see how this plays out.

If they're going to report the proceeds to the IRS, then I should be able to report my cost and deduct any losses, too, right?  Like when I have to sell my $90 Bucks season tickets for $25 because they're playing Detroit and half the team is out with Covid?
Yes I believe you'll fill out a schedule C.  Show the "business" income from the 1099-K and the cost of the tickets as a business expense to offset the income.  

 
Agreed. $600 is ridiculous. This will definitely impact the fantasy football industry as well. I would guess many leagues pay out winnings (and receive fees) via PayPal/VenMo.

 
The logic, I would say, is that $600 is the threshold for Form 1099-MISC, which is used for reporting of non-employee (independent contractor) compensation.  But applying that threshold here seems like it will cause more problems than it's worth.

 
I've read that those platforms should only be sending you a 1099 if you use it as a business platform.

The other question/point is you can receive up to $15k tax free as a gift.  What's stopping anyone from claiming these as gifts instead of sales?  I gave Joe a sofa.  A couple days latter Joe gifted me $600

 
$600 is the legal threshold for income reporting, so it makes sense. 

If you get sent one, just subtract the non-income. Splitting a restaurant bill, covering your half of the rent, and items sold for a loss can all be excluded. They're only looking for business income. 

It makes sense to add reporting. The data is there, report it. 

You are already reporting payments in excess of $600 for maids, babysitters, gardeners, etc., right? You should be after all. This is just another check on that kind of thing. 

 
$600 is the legal threshold for income reporting, so it makes sense. 

If you get sent one, just subtract the non-income. Splitting a restaurant bill, covering your half of the rent, and items sold for a loss can all be excluded. They're only looking for business income. 

It makes sense to add reporting. The data is there, report it. 

You are already reporting payments in excess of $600 for maids, babysitters, gardeners, etc., right? You should be after all. This is just another check on that kind of thing. 
This makes sense to a degree but not all the data is there.  Places like Stub Hub, TM, etc shouldn't need my social security number if I'm just reselling something I paid for.  I'm not in the business of making money on selling tickets to a particular event I can no longer attend.  That's the issue I have with this.  I get it there are people abusing the system and need to be tracked I just think $600 is way too low and catches too many of these 1 time payments.  

 
I've read that those platforms should only be sending you a 1099 if you use it as a business platform.
This.  Any other implementation will be ludicrous.  For example, my son pays his roommate via Venmo every month for his share of rent/utilities.  So now his roommate will be taxed on $9K?

 
Which tax forms can I expect to receive from Venmo?

For the 2021 tax year, Venmo will issue a Form 1099-K to business profile owners who have passed the IRS reporting threshold for their state of residence:

  • For most states, the threshold is $20,000 USD in gross payment volume from sales of goods or services in a single year, AND 200 payments for goods and services in the same year
  • For residents of Massachusetts, Maryland, Vermont, and Virginia, the threshold is $600 USD, irrespective of the number of transactions 
  • For Illinois residents, the threshold is $1,000 USD with 3 or more transactions 
Starting the 2022 tax year, the IRS will require reporting of payment transactions for goods and services sold that meets or exceeds $600 in a calendar year. Anyone who receives at least $600 in payments for goods and services through Venmo, or any other payment app, can expect to receive a Form 1099-K.
This requirement only pertains to payments received for sales of goods and services and DOES NOT apply to friends and family payments.

 
This.  Any other implementation will be ludicrous.  For example, my son pays his roommate via Venmo every month for his share of rent/utilities.  So now his roommate will be taxed on $9K?
No.  That's not taxable income and it's not a business. 

Even if he got a 1099-K and filled out a Schd-C it would zero out once you get to line 20, rent expenses.  Nothing would roll forward to 1040 line 3.  Unless you really wanted to nickel and dime it and add office supply expenses and take a loss.  But I wouldn't do that either since again, it's not a business.     

 
shouldn't need my social security number if I'm just reselling something I paid for.
For any amount? That's how selling for profit works, though: you buy a good then sell it to someone else and it's now income (and taxable if over thresholds.)

Since these apps and services are being used for those types of exchanges they are technically required to be reported above certain thresholds, only now the companies have to track and issue tax info on them instead of relying on taxpayers to self-report.

 
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The Noid said:
For any amount? That's how selling for profit works, though: you buy a good then sell it to someone else and it's now income (and taxable if over thresholds.)

Since these apps and services are being used for those types of exchanges they are technically required to be reported above certain thresholds, only now the companies have to track and issue tax info on them instead of relying on taxpayers to self-report.
If someone is 1 time selling tickets to a concert they purchased through the same app then yes TM shouldn't have to collect people's socials.  Especially when they aren't sold for a profit.  I get the IRS is cracking down on tax cheats but they are going about it wrong.  To drop from $20,000 to $600 is absurd.   I know I know the $600 1099 rule which by the way hasn't been adjusted since the 1950's.  

 

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