Finally some good news out of the IRS : 2023 1099-k update

[honyock]

https://www.irs.gov/newsroom/irs-announ ... ementation

Delaying implementation of the asinine $600 limit for 1099-k

Going to be posting a bunch of stuff on Reverb...

[tonebender]

I hope they never implement that policy.

[Buddha Pickups]

https://www.irs.gov/newsroom/irs-announ ... ementation

Delaying implementation of the asinine $600 limit for 1099-k

Going to be posting a bunch of stuff on Reverb...

Make sure your state hasn't implemented it separately from the federal government. My state started in 2020.

[honyock]

https://www.irs.gov/newsroom/irs-announ ... ementation

Delaying implementation of the asinine $600 limit for 1099-k

Going to be posting a bunch of stuff on Reverb...

Make sure your state hasn't implemented it separately from the federal government. My state started in 2020.

Luckily AZ is still smart...

[mickey]

My state does not have state income tax, that is one of the big reasons we chose to retire here.

[andrewsrea]

I hope they never implement that policy.

Agreed. I believe that in most personal income tax cases, it is just retaxing the same earnings twice. Here is how:

The rule assumes that 100% of the gross transaction price is gross earnings. It assumes that the standard deduction accounts for the error (IMHO, it doesn't). It also falsely assumes that everyone selling an item at auction, is running an underground business and trying to avoid taxes.

According to IRS's own definitions, once post-tax earnings are used in a purchase, in federal taxation that has now become an asset, not subject to earned income tax (duh, right?). The process should be that if you sell the item later for $10 more (after selling and shipping costs), then that $10 is earned income and subject to federal taxing. And to be fair in taxation, a seller should have the right in a tax year to discount their auctions sold at a loss from their total AGI. Way off from the intended $600 tax operates.

In relative news, I thought the IRS announced last October that not only are they deferring it, but they are increasing the amount to $5K (I am unsure of the exact amount) or more, per instance. So not cumulative sales values when you exceeded the $600 hurdle, but only instances which exceed $5K.

IMHO, the real motivation for this added rule, is US political virtue signaling coupled with the IRS trying to rebuilt itself to the pre-90's empire it once was. The IRS is inefficient and will spend more in administrative costs than they recover, making it a net LOSS to the US taxpayer. But, common citizens won't realize this trickery until years after it is institutionalized and hard to reverse.

[Buddha Pickups]

https://www.irs.gov/newsroom/irs-announ ... ementation

Delaying implementation of the asinine $600 limit for 1099-k

Going to be posting a bunch of stuff on Reverb...

Make sure your state hasn't implemented it separately from the federal government. My state started in 2020.

Luckily AZ is still smart...

It's mostly blue states that had enacted the policy prior to the federal government and AZ has been pretty red until this past year, so yes, you're lucky as your new governor couldn't enact this without legislature approval.

[Buddha Pickups]

I hope they never implement that policy.

Agreed. I believe that in most personal income tax cases, it is just retaxing the same earnings twice. Here is how:

The rule assumes that 100% of the gross transaction price is gross earnings. It assumes that the standard deduction accounts for the error (IMHO, it doesn't). It also falsely assumes that everyone selling an item at auction, is running an underground business and trying to avoid taxes.

According to IRS's own definitions, once post-tax earnings are used in a purchase, in federal taxation that has now become an asset, not subject to earned income tax (duh, right?). The process should be that if you sell the item later for $10 more (after selling and shipping costs), then that $10 is earned income and subject to federal taxing. And to be fair in taxation, a seller should have the right in a tax year to discount their auctions sold at a loss from their total AGI. Way off from the intended $600 tax operates.

In relative news, I thought the IRS announced last October that not only are they deferring it, but they are increasing the amount to $5K (I am unsure of the exact amount) or more, per instance. So not cumulative sales values when you exceeded the $600 hurdle, but only instances which exceed $5K.

IMHO, the real motivation for this added rule, is US political virtue signaling coupled with the IRS trying to rebuilt itself to the pre-90's empire it once was. The IRS is inefficient and will spend more in administrative costs than they recover, making it a net LOSS to the US taxpayer. But, common citizens won't realize this trickery until years after it is institutionalized and hard to reverse.

I read they're going to implement 5000 next year as a soft rollout prior to the 600. So 2024 will be 5000 requirement and 2025 will begin the 600...unless they scrap the idea which I hope they do but it doesn't matter here in VA as my state government enacted it back in 2019 to be effective in 2020. I don't remember the list but MA, IL, VA, and a few other states passed the 600 requirement prior to the federal government passing it as part of Bidens first stimulus package in 2021...the great American recovery act :p