Huge Tax Reporting Change Part Of Last Stimulus Bill (small business, status, company)
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Long story short democrats needed to find money to offset all their big liberal progressive spending, so their going after little guys by trawling with a huge net.
You mean find money by making it harder for people to cheat on their taxes by not reporting income?
We run in to things like this all the time in photography..higher end Nikon lenses tend to go up in value over time and many times they are sold for more than they cost .
There isn’t amateur photographer ever that declared a profit on selling a used lens ,you can bet on that
Because it only impacts low wage earners. With that being said, I don't condone anyone cheating on their taxes.
Where is your data on "only impacts low wage earners"? It is likely to add to the tax bill of a middle income taxpayer more, low wage earners normally pay little to no tax.
So Joe the Plumber sells his dead granny's silver on Ebay for $ 601.00 and then has to file taxes on it, but millionaires can continue to evade taxes. Does he also need to file as an independent contractor thus paying social security and medicare taxes on it, too? I don't know how that works...just thinking out loud.
Joe the Plumber was not doing anything illegal if his Ebay sales were before this law was passed.
Not correct, first off Joe would owe nothing - it is not taxable income, it is inheritance which is at stepped up value. Even if it was his own, would only owe capital gains which likely to be zero also.
Don't confuse wealth with earnings but Millionaires pay the majority of taxes in the US - the top 10% pay over 70% of all taxes, the top 5% pay 60%, the top 1% pays more than the bottom 90% of all tax payers in the US so they don't "evade taxes". But also you can't give a tax break to someone paying no tax which is true for almost 50% of the US.
I also don't see a problem here.
Anything above $600 is more than "yard sale" money, fair enough.
And my husband is going to be impacted because he sells collectibles on Ebay quite a lot, but we discussed it, looked into the different ways to report it, and figured out a plan.
The only thing that sucks in our case is that he really doesn't have much of anything for records of his purchases to establish a basis for the long term capital gains, and I tend to operate under the principle that if you have no proof, then you don't get the benefit, when it comes to taxes. So he'll be paying tax on the full sale price, rather than adjusting to get the gain, because we don't know exactly WHEN he bought whatever, so we don't know what the FMV was, and we don't know what he paid. But it's all good.
However, I'm one who doesn't actually object to paying taxes as much as I object to what they sometimes get used for. I want to see a clear gain for society in general, in where my tax dollars are spent by the government. Almost the entirety of my aggravation with taxes has always been a matter of "trust issues" with where the money goes.
If our government can make up revenues by going after people who thought they were entitled to cheat on their taxes, rather than by raising taxes on most Americans, I'm definitely fine with it.
Where is your data on "only impacts low wage earners"? It is likely to add to the tax bill of a middle income taxpayer more, low wage earners normally pay little to no tax.
Precisely.
This is going to f*** many of my friend's consulting and drop shipping businesses.
The only thing that sucks in our case is that he really doesn't have much of anything for records of his purchases to establish a basis for the long term capital gains, and I tend to operate under the principle that if you have no proof, then you don't get the benefit, when it comes to taxes. So he'll be paying tax on the full sale price, rather than adjusting to get the gain, because we don't know exactly WHEN he bought whatever, so we don't know what the FMV was, and we don't know what he paid. But it's all good.
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.
AirBnb didn't sent end of year statements to those earning less than $20K a year. I reported it anyway. To do otherwise is cheating.
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