USA tax granularity getting smaller in 2022

[Brickjectivity]

No more honor system for taxes on side hustles.

In the USA payment systems such as paypal, amazonpay, zell, etc must issue 1099K to anyone who sells 600$ worth in a tax year. Previously this only happens if a person sells at least 20,000$ in a tax year and making at least 200 transactions, so it is a change.

I've no opinion, yet, about whether this is a good move or not.

The new regulations will cause a 1099K to be issued even if there is just one transaction of 600$ or more. Once the 1099K is issued, that means the IRS knows about any transaction amount over $600 through that payment service. The regulations go into effect in 2022 and will affect 2023 tax forms.

Digital currencies such as bitcoin are not in the same category, so accepting payment using these does not require a 1099K.

I heard about this in a youtube video where a presenter was complaining that it would affect yard sales. I think a yard sale is a pretty extreme case, I have have never been to a yard sale using a payment system. Some people have permanent yard sales, but I'd call these businesses.

 

[Revoltingest]

Surveillance will only increase.

Some advice....
Save & keep track of receipts for personal things you might later
sell when no longer needed. This way you can prove what your
basis is. ("Basis" is what it cost you.) Without that, the IRS might
claim that your net (sale price minus costs) is all profit.

 

[Brickjectivity]

Surveillance will only increase.

Some advice....
Save & keep track of receipts for personal things you might later
sell when no longer needed. This way you can prove what your
basis is. ("Basis" is what it cost you.) Without that, the IRS might
claim that your net (sale price minus costs) is all profit.

I wonder if big box retailers will begin to offer individual receipts for things purchased at the register? Currently they give you one long receipt, so its hard to get individual receipts. Also we don't get paper receipts for things purchased online. We can print out our own and can show a charge record.

 

[Revoltingest]

I wonder if big box retailers will begin to offer individual receipts for things purchased at the register? Currently they give you one long receipt, so its hard to get individual receipts. Also we don't get paper receipts for things purchased online. We can print out our own and can show a charge record.

I recall seeing systems that take pix of receipts.
There are ways to do it. I keep a database with
hard copy files.

 

[esmith]

I recall seeing systems that take pix of receipts.
There are ways to do it. I keep a database with
hard copy files.

Scan every recepit and file it on electronic device, even though I do not itemize on my taxes.

Edit:
only scan big ticket items....everday expenses not electronicly held, but wife keeps all receipts for 1 year (she believes in "hard copy")

 

[Revoltingest]

Scan every recepit and file it on electronic device, even though I do not itemize on my taxes.

Edit:
only scan big ticket items....everday expenses not electronicly held, but wife keeps all receipts for 1 year (she believes in "hard copy")

In a dispute with the IRS, there is no time limit
on keeping documentation. And for court purposes,
I've needed hard copies a decade old.

 

[icehorse]

No more honor system for taxes on side hustles.

In the USA payment systems such as paypal, amazonpay, zell, etc must issue 1099K to anyone who sells 600$ worth in a tax year. Previously this only happens if a person sells at least 20,000$ in a tax year and making at least 200 transactions, so it is a change.

I've no opinion, yet, about whether this is a good move or not.

The new regulations will cause a 1099K to be issued even if there is just one transaction of 600$ or more. Once the 1099K is issued, that means the IRS knows about any transaction amount over $600 through that payment service. The regulations go into effect in 2022 and will affect 2023 tax forms.

Digital currencies such as bitcoin are not in the same category, so accepting payment using these does not require a 1099K.

I heard about this in a youtube video where a presenter was complaining that it would affect yard sales. I think a yard sale is a pretty extreme case, I have have never been to a yard sale using a payment system. Some people have permanent yard sales, but I'd call these businesses.

As long as they don't ask the 1% to pay taxes we should be okay

 

[esmith]

As long as they don't ask the 1% to pay taxes we should be okay

please read and think about what you said above.
In 1 Chart, How Much the Rich Pay in Taxes

 

[icehorse]

please read and think about what you said above.
In 1 Chart, How Much the Rich Pay in Taxes

I think this chart is misleading. For example, I'd be curious to know how they're defining "income"? It also totally sidesteps wealth, which we know is closely tied to taxes and income.

 

[esmith]

I think this chart is misleading. For example, I'd be curious to know how they're defining "income"? It also totally sidesteps wealth, which we know is closely tied to taxes and income.

You don't know what income is? Do you not file taxes every year.
FYI You do know that wealth is not taxed
Just in case you need a reminder, here is a defintion of income from:
What Counts as Income?.
Income is money that a person or a business receives in return for working, providing a product or service, or investing capital. A person's income may also derive from a pension, a government benefit, or a gift.

 

[icehorse]

You don't know what income is? Do you not file taxes every year.
FYI You do know that wealth is not taxed
Just in case you need a reminder, here is a defintion of income from:
What Counts as Income?.
Income is money that a person or a business receives in return for working, providing a product or service, or investing capital. A person's income may also derive from a pension, a government benefit, or a gift.

It seems that you're either not debating in good faith, or you've bought into the lies the oligarchs and their minions in DC spin. If I'm wrong, tell me where you're coming from, and please dispense with the condescension.

 

[Revoltingest]

It seems that you're either not debating in good faith, or you've bought into the lies the oligarchs and their minions in DC spin. If I'm wrong, tell me where you're coming from, and please dispense with the condescension.

Having wealth is generally not taxed (some exceptions
being personal property taxes & real estate taxes).
What were you addressing regarding wealth & taxation?

 

[Kooky]

please read and think about what you said above.
In 1 Chart, How Much the Rich Pay in Taxes

When people talk about "the 1%", they generally mean the people controlling the most wealth. As you correctly explained, there are no taxes on wealth, only on income.

 

[icehorse]

@esmith, @Revoltingest, @Kooky,

I suspect most of us know that the US tax code is massive and complex and full of loopholes that let the rich LEGALLY minimize their tax burdens, correct so far?

One of these loopholes is to artificially keep income separate from wealth. So let's say the uber-rich like Bezos and Gates and Musk and so on are each worth 100 BILLION - just round numbers. Yes, as things stand that's their wealth, I get it. And their salaries are far smaller, on the order of millions a year.

My contention is that their wealth is - from an ethical perspective - something like "income on hold". Or "income that will happen later". None of these guys paid anything approaching 30 or 40% tax on this massive amount of wealth they've accrued. Again, is it legal? For the sake of discussion, I'll grant you that. But is it ethical? Clearly not.

 

[Revoltingest]

I suspect most of us know that the US tax code is massive and complex and full of loopholes that let the rich LEGALLY minimize their tax burdens, correct so far?

One of these loopholes is to artificially keep income separate from wealth.

It's a "loophole" if you presume that one owes taxes on wealth
one has. Should you & I pay the federal government a percentage
of my equity each year?

So let's say the uber-rich like Bezos and Gates and Musk and so on are each worth 100 BILLION - just round numbers. Yes, as things stand that's their wealth, I get it. And their salaries are far smaller, on the order of millions a year.

My contention is that their wealth is - from an ethical perspective - something like "income on hold". Or "income that will happen later". None of these guys paid anything approaching 30 or 40% tax on this massive amount of wealth they've accrued. Again, is it legal? For the sake of discussion, I'll grant you that. But is it ethical? Clearly not.

I think you should be addressing this as wealth gained,
which currently isn't treated as income under the tax code,
eg, stock portfolio growth that isn't realized as gain from
"a taxable event".
This is a different issue from the broad "taxing wealth".

Am I on the right track with what you're getting at?

 

[icehorse]

Should you & I pay the federal government a percentage of my equity each year?

Well I don't think I should help you pay any of your taxes

But to your point, I think a progressive equity tax might not be a bad idea. I would guess that you're an UMC sort of guy (as am I). I wouldn't think we ought to pay much (if any) wealth or equity tax. But as people get richer and richer I think wealth and/or equity taxes are appropriate.

I think you should be addressing this as wealth gained, which currently isn't treated as income under the tax code, eg, stock portfolio growth that isn't realized as gain from "a taxable event".
This is a different issue from the broad "taxing wealth".

Am I on the right track with what you're getting at?

At this point I don't have strong opinions about the implementation details. But I think a wealth tax is a very ethical idea. As I've said before, it's almost unheard of for wealth to accumulate without heavy use of "the commons", and so those accumulating the wealth ought to be contributing to maintenance of "the commons", or else I think it's fair to characterize those people and corporations as parasitic.

 

[Kooky]

@esmith, @Revoltingest, @Kooky,

I suspect most of us know that the US tax code is massive and complex and full of loopholes that let the rich LEGALLY minimize their tax burdens, correct so far?

One of these loopholes is to artificially keep income separate from wealth. So let's say the uber-rich like Bezos and Gates and Musk and so on are each worth 100 BILLION - just round numbers. Yes, as things stand that's their wealth, I get it. And their salaries are far smaller, on the order of millions a year.

My contention is that their wealth is - from an ethical perspective - something like "income on hold". Or "income that will happen later". None of these guys paid anything approaching 30 or 40% tax on this massive amount of wealth they've accrued. Again, is it legal? For the sake of discussion, I'll grant you that. But is it ethical? Clearly not.

Yes, but you're still conflating two issues here - the absence of a wealth tax, and the prevalence of loopholes on income taxes that tend to favor the wealthy and super wealthy.I agree with the general thrust of your idea here, but you're wording it so badly that I had genuine trouble parsing what it is you wanted to talk about on a first read.

Wealth and income are related, obviously, and so is the prevalence of the narrative that the super wealthy pay a majority of taxes when they have access to the very best vehicles of tax mitigation and outright tax avoidance.

 

[Revoltingest]

Well I don't think I should help you pay any of your taxes

Not the issue.

But to your point, I think a progressive equity tax might not be a bad idea. I would guess that you're an UMC sort of guy (as am I).

Upper Middle Class?
Whatever it is, I advocate for policy based upon
effects larger than myself. But personal experience
enlightens one regarding larger pictures.

I wouldn't think we ought to pay much (if any) wealth or equity tax. But as people get richer and richer I think wealth and/or equity taxes are appropriate.

OK.
I dislike wealth redistribution.

At this point I don't have strong opinions about the implementation details. But I think a wealth tax is a very ethical idea. As I've said before, it's almost unheard of for wealth to accumulate without heavy use of "the commons", and so those accumulating the wealth ought to be contributing to maintenance of "the commons", or else I think it's fair to characterize those people and corporations as parasitic.

Companies pay for common benefits by property
taxes, payroll taxes, & income taxes. Parasites
are those who consume rather than produce.
Would you apply the term to the poor who need
government largesse to survive?

 

[icehorse]

Not the issue.

i was making a joke about the wording of your earlier post

 

[icehorse]

Companies pay for common benefits by property
taxes, payroll taxes, & income taxes. Parasites
are those who consume rather than produce.
Would you apply the term to the poor who need
government largesse to survive?

Most companies do pay their taxes, but many of the largest and most profitable corporations and indivviduals do not. It's those that do not that I'm calling parasitic.

As for the poor, I like the old depression era CCC approach: if you're able bodied, grab a shovel and at the end of the day we'll hand you $150 (or whatever a decent wage would be for a good day's work.)