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Do you know how many cash businesses there are in NYC alone that wouldn't exist if they had to pay taxes on ALL of their income....
Please let's drop the fantasy that every good little business owner is 100% honest on their on the books revenue
The only fantasy is everyone paying their “fair share”. Normally that statement, as ridiculous as it is, is directed at the “wealthy and big corporations”. Reality is that the vast majority of the tax gap comes from those cash businesses.
The only fantasy is everyone paying their “fair share”. Normally that statement, as ridiculous as it is, is directed at the “wealthy and big corporations”. Reality is that the vast majority of the tax gap comes from those cash businesses.
Let them fail if they can’t operate legally.
Ok, then where will you get your morning cup of Joe, breakfast sandwich as you schlep your way into the office...
This combined with the Delta variant spells the death of most small convenience stores as well as boutique shops that employ millions of low wage Americans.
Really think this through and question is this good for the little guy or the economy.
Warren Buffett has an army of CPAs and Compliance officers on the dole and can even write them off as a tax deductible expense. Joe corner store or the grandmother on etsy? Not so much.
If you voted for this you shouldn't be upset. You were warned this could happen.
It's a stupid rule to begin with, and the lowered amount makes it even dumber. The fed doesn't deserve moar of our money. Meanwhile the 1% continues to get off scott free.
This is going to f*** many of my friend's consulting and drop shipping businesses.
Why? Doesn't he keep records of the costs of the goods he sells? You do realize that the drop shippers get to offset the revenue with the cost of the goods they sold, right? If they are consulting, they need to be paying taxes on the income in any case.
Quote:
Originally Posted by Tencent
Here's the problem and why it's not all good...
All it takes is a couple of horror stories over tax bills from minor menial sales to kill entire business models in unincorporated SMBs to severely impact activities.
Even worse some people may resort to illegal activities to avoid reporting requirements. Most people will mess this up like you said your husband has no cost basis records.
So 90% of people will just say "OK I'm not going to do this where there's a paper trail".
This is the dumbest tax bill in the 21st century to date. Get ready for knock on effects, SMBs are going to get wrecked.
No they are not. Unless they are lazy people who don't keep good business records.
Quote:
Originally Posted by Tencent
Ok, then where will you get your morning cup of Joe, breakfast sandwich as you schlep your way into the office...
This combined with the Delta variant spells the death of most small convenience stores as well as boutique shops that employ millions of low wage Americans.
Really think this through and question is this good for the little guy or the economy.
Warren Buffett has an army of CPAs and Compliance officers on the dole and can even write them off as a tax deductible expense. Joe corner store or the grandmother on etsy? Not so much.
The small businesses and others cna deduct the cost of the CPA's and other folks too. You always get to deduct the costs of doing business from the revenue to calculate taxes. The coffee and breakfast places know their income and their expenses, and, presumably, are also collecting sales taxes as well.
The people who aren't paying their taxes here are stealing from the rest of us.
Do you know how many cash businesses there are in NYC alone that wouldn't exist if they had to pay taxes on ALL of their income....
Please let's drop the fantasy that every good little business owner is 100% honest on their on the books revenue
Do you realize how easy it is to get caught?
I have a small business and do 32 tax forms a year. I've been involved in 3 audits of my suppliers over the 30+ years and had to provide documentation of what I purchased and who I sold it to. That's one way they find those who are non-compliant.
I had to go through the IRS Research audit 5 years ago where the agent comes to your place of business and goes through your computers and accounts and verifies every transaction. If you intentionally don't report income you're in trouble. Guess what, your 1099-K's mean nothing. The IRS is looking at all your accounts, including PayPal, to see if you reported every dollar coming in.
Actually became friendly with the IRS agent since we spent so much time with him. He says they laugh at folks like the OP that think they can get away with tax evasion, especially online sales because the numbers are right there in the accounts.
Why is the rule "stupid"? Because it makes it easier for the IRS to catch tax cheats? Are you one of those "law and order" types who only wants "law and order" applied to everybody but yourself and your family/pals? Resentment and jealousy of the wealthy doesn't justify tax fraud.
I'm not even going to entertain this anymore frankly....
Many of you are likely Boomers raised to be Theodore Cleaver honest and by the book...And perhaps you were privileged and could live your life that way on an easy path to success.
But newsflash problems started happening after the 60s and everything including Bretton Woods was turned on it's head multiple times and this government (and the taxpayer themselves) are up to our eyeballs in unnecessary debt.
If you think for one second that this bill is good, positively impacts the little guy and you are actually for this it already tells me you've got a nest egg and haven't had to struggle at all, or at least not in decades.
As far as impacts to me, this is zero directly, but my non incorporated consulting clients are going to sh** bricks, which means until they get their books straight they can't afford me.
I suppose many of you live in Flyover states as well with this perspective because as I already mentioned tax evasion is a basic survival skill for NY businesses who are screwed in part by SALT deduction limitations plus inability to qualify for business lines of credit, (forcing them to use personal credit). It's not what I advocate but I'm not paying their bills so I don't have any right to judge. My books are always in order but that's me.
The sheer lack of practicality and the simplistic B&W, "You are either Good or Evil" parroted tropes indicates to me you're not well traveled or have not socialized or interacted with anyone out of your privileged bubbles.
5 out of 10 businesses in NYC do their own taxes and only consult with a CPA after they've been audited to negotiate the bill. I've been told that it's actually cheaper for them to do it this way and just keep paying penalties (mostly from NY DFS) than retain a quality CPA.
You can like it or not but this is REALITY... We should not be concerned as tax payers with shaking down grandmothers, Bodega owners and other thin margin businesses and increasing reporting costs and complexity for them.
But I guess just like COVID we'll all learn the hard way...
If you voted for this you shouldn't be upset. You were warned this could happen.
It's a stupid rule to begin with, and the lowered amount makes it even dumber. The fed doesn't deserve moar of our money. Meanwhile the 1% continues to get off scott free.
{sigh} the top 1% of earners pay 40% of all income taxes. The bottom half (is that you?) pay 3%.
If you voted for this you shouldn't be upset. You were warned this could happen.
It's a stupid rule to begin with, and the lowered amount makes it even dumber. The fed doesn't deserve moar of our money. Meanwhile the 1% continues to get off scott free.
this would be totally false.
plus there is a big difference between using the laws and tools on the books so your fair share of taxes is the lowest you can get them down to vs tax fraud and tax avoidance.
i had a few hundred thousand dollars in costs for buying in to a real estate business which now that we closed it i got to take as a write off .
the carry over is so large that for the next few years i will pay little in capital gain tax on our portfolio ..... the fact i may pay so little tax is fully justified by what i spent up front . so just because someone pays little in tax does not mean there is fraud or anything else going on . it is just legal carry overs that cant be taken at once since it is capped once it wipes away any other gains
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