Do you like higher taxes? Too bad, they are coming like it or not...

[Reburn]

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

 

[Justinjs]

This isn't new, it's a clarification, due to people skirting paying taxes for goods or services. The $600 has been in place for a while, it's only requiring PayPal,Venmo, cash app, ect. to issue a 1099-k when it's hit.
Not news worthy.

 

[BigDog00]

Just gonna have to get creative. Maybe send an old fashioned check or sell local and meet in person with cash.

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[MuleyFever]

This isn't new, it's a clarification, due to people skirting paying taxes for goods or services. The $600 has been in place for a while, it's only requiring PayPal,Venmo, cash app, ect. to issue a 1099-k when it's hit.
Not news worthy.

Does this mean we should put away our pitchforks and torches?

 

[Kimber7man]

Might be a bunch of people dumping their PayPal accounts this December….

 

[Justinjs]

Does this mean we should put away our pitchforks and torches?

Bigdog00 said it best, just sell local or pay with a check. It's just closing a loophole, similar to e-commerce avoiding charging tax to buyers. It's $-hit but...death and taxes, the IRS is really good at getting money.

 

[Bubblehide]

Except that when we sell used gear, it helps us establish the loss we take on it. You just need a good tax guy.

 

[peterk123]

@farmer14

To be fair.....
The intent of this (from what I've understood) is to prevent independent contractors from evading taxes:

You hired a consultant to help with your business planning and paid him $50,000 via PayPal. PayPal does not issue the consultant a 1099-K because it fails the more than 200 transactions in a calendar year requirement. In fact, this same consultant could have 10 clients, each paying $20,000 thru PayPal and would not receive a 1099-K.

Like always, It's the little guys who are getting the hose. Selling a $600 pair of binos will increase your gross annual income by $600, which is now reported to the IRS.

IE instead of earning $50,000 in 2022 you'll have earned $50,600, and have to pay (or get a refund of taxes paid) accordingly in April 2023

I hire a consultant for $50k, I am sending him a 1099 because I want the writeoff.

 

[Fartrell Cluggins]

There's a bill making its way through congress now that would require banks to report all transactions over $600, so about that check...

 

[Silveroddo]

Except that when we sell used gear, it helps us establish the loss we take on it. You just need a good tax guy.

Unless you're an outfitter/guide/content creator, etc. Is there a scenario where you guys are able to write your gear off?
The Scenario I see is like this:
I get my paycheck after taxes and go buy a camera on line with after tax money, I'm not in a scenario that I'm able to write this off as a piece of equipment because I'm not generating revenue with it. After a few years I sell it on ebay for $601.00 . Ebay Charges the buyer their state sales tax, I get 1099ed for it. I didn't write it off, I paid for it with after tax money, now I need to establish that I didn't make a profit on this sale, if I don't I pay whatever tax at whatever income bracket I am in, again. The buyers state already collected sales tax on it, and now its up to me to provide the burden of proof that I didn't make money on the sale, or I get double taxed.

I get that they'll catch a few guys and collect a little more legitimate revenue, but the additional work that's being created in a system that's not enforcing tax laws on brick and mortar business's that are right out in the open........ Brings me to the George Carlin reaction

Back to the main question, are you guys legitimately writing your gear off? I'm totally missing something if that's a thing

 

[DComer_55]

Except that when we sell used gear, it helps us establish the loss we take on it. You just need a good tax guy.

The below is not tax advice and should be discussed with your personal tax advisor.

Losses on personal assets are non-deductible. So you won't see any benefit from the loss, but you should have to pay tax on the income. Deducting personal losses is a violation of the tax law.

For most people they income from these sales would be considered hobby income. You would be allowed to deduct the cost of the item, so for 99% of these sales you will be selling for less than you paid, meaning there will be no taxable income. Deductions for hobbies are limited to hobby income, so again you derive a tax benefit from the loss other than offsetting the income earned directly from the sales.

If you could demonstrate your gear sales were a business and not a hobby ‐ this would be quite difficult for most ‐ the losses may then be deductible.

The link below discusses this in depth and most of the info comes from the AICPA.

It's going to become harder to avoid telling the IRS about income from selling stuff online. Here's what to know

The recently enacted American Rescue Plan Act significantly lowers the threshold for when online sellers will receive a tax form.

www.google.com

One last time just to make sure no one sues me ‐ this post is not tax advice and should not be relied upon as tax advice. You should discuss this issue with your personal tax advisor.

 

[mtblackdog]

Gotta pay for a fake pandemic somehow.

 

[260madman]

C’mon man! We have to pay for all the free stuff. How else is it free? Fugees and invaders need their fair share. It’s your duty to pay for it Comrade.

Just wait until the artsy fartsy liberal type get hammered for their craft and arts show income. They’ll have to sit on any cash and not earn interest while the dollar depreciates more and more as the money printer goes Brrrrrrr.

 

[Bubblehide]

The below is not tax advice and should be discussed with your personal tax advisor.

Losses on personal assets are non-deductible. So you won't see any benefit from the loss, but you should have to pay tax on the income. Deducting personal losses is a violation of the tax law.

For most people they income from these sales would be considered hobby income. You would be allowed to deduct the cost of the item, so for 99% of these sales you will be selling for less than you paid, meaning there will be no taxable income. Deductions for hobbies are limited to hobby income, so again you derive a tax benefit from the loss other than offsetting the income earned directly from the sales.

If you could demonstrate your gear sales were a business and not a hobby ‐ this would be quite difficult for most ‐ the losses may then be deductible.

The link below discusses this in depth and most of the info comes from the AICPA.

It's going to become harder to avoid telling the IRS about income from selling stuff online. Here's what to know

The recently enacted American Rescue Plan Act significantly lowers the threshold for when online sellers will receive a tax form.

www.google.com

One last time just to make sure no one sues me ‐ this post is not tax advice and should not be relied upon as tax advice. You should discuss this issue with your personal tax advisor.

I was not referring to personal assets

 

[Bubblehide]

Unless you're an outfitter/guide/content creator, etc. Is there a scenario where you guys are able to write your gear off?
The Scenario I see is like this:
I get my paycheck after taxes and go buy a camera on line with after tax money, I'm not in a scenario that I'm able to write this off as a piece of equipment because I'm not generating revenue with it. After a few years I sell it on ebay for $601.00 . Ebay Charges the buyer their state sales tax, I get 1099ed for it. I didn't write it off, I paid for it with after tax money, now I need to establish that I didn't make a profit on this sale, if I don't I pay whatever tax at whatever income bracket I am in, again. The buyers state already collected sales tax on it, and now its up to me to provide the burden of proof that I didn't make money on the sale, or I get double taxed.

I get that they'll catch a few guys and collect a little more legitimate revenue, but the additional work that's being created in a system that's not enforcing tax laws on brick and mortar business's that are right out in the open........ Brings me to the George Carlin reaction

Back to the main question, are you guys legitimately writing your gear off? I'm totally missing something if that's a thing

There are plenty of other categories that you do not include

 

[DComer_55]

I was not referring to personal assets

Sorry if I miss understood what you were referencing.

For most of us, hunting gear is personal use.

 

[Bubblehide]

Sorry if I miss understood what you were referencing.

For most of us, hunting gear is personal use.

I agree, but with some creativity a legal write-off can be legally established; you all just need a tax person that will work with you.

 

[cmahoney]

Us rich guys need to pay our fair share.


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[Bubblehide]

Us rich guys need to pay our fair share.


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Have at it. I am far from rich

 

[Silveroddo]

I agree, but with some creativity a legal write-off can be legally established; you all just need a tax person that will work with you.

lol, First just tell me whether you're a farmer or not. If that's not the case then just lay out one hypothetical scenario to satisfy my curiosity. You don't even have to spell it out all the way.