IRS has stalled a new tax rule - ANOTHER DELAY!! Hello AMAZON!
As part of the American Rescue Plan of 2021, e-commerce giants, credit card companies and payment apps will eventually be required to report payments for goods and services if they exceed $600 per year from any number of transactions — a major change from the current reporting threshold of $20,000 over 200 transactions.
The requirement had been set to come into effect for tax returns filed in early 2024, but following complaints from taxpayers, tax professionals and payment processors — who slammed the change as “unwarranted and unfair” — the IRS announced a compromise: an interim threshold of $5,000 for the 2024 tax year, applicable to tax returns filed in 2025.
The $600 threshold will then take effect for 2025, and affected taxpayers can expect to receive their 1099-Ks in time to file their returns in early 2026.
IRS has stalled a new tax rule - ANOTHER DELAY!! Hello AMAZON!
As part of the American Rescue Plan of 2021, e-commerce giants, credit card companies and payment apps will eventually be required to report payments for goods and services if they exceed $600 per year from any number of transactions — a major change from the current reporting threshold of $20,000 over 200 transactions.
The requirement had been set to come into effect for tax returns filed in early 2024, but following complaints from taxpayers, tax professionals and payment processors — who slammed the change as “unwarranted and unfair” — the IRS announced a compromise: an interim threshold of $5,000 for the 2024 tax year, applicable to tax returns filed in 2025.
The $600 threshold will then take effect for 2025, and affected taxpayers can expect to receive their 1099-Ks in time to file their returns in early 2026.
0 replies
Seller_nRFmxiQg4EGrw
Any changes to this affect only dishonest sellers. If you make money, you are required to report it on taxes, regardless of any 1099 or other document issued.
So unless you are a tax cheat ripping off the American public, this change is a non-issue.
Seller_y7K2usRrDUAe8
This only changes the minimum threshold to trigger additional paperwork that Amazon will be sending to you and report to the IRS. It has nothing to do with how you file taxes.
Let's say you sold $100 worth of goods, and someone paid you in cash. You "technically" still need to report that transaction in your tax filing and pay something like $20 of income taxes. This is detailed on the IRS website here:
No matter the amount, if you receive payments for selling goods or services or renting property you must report your income.
However, under the above scenario, the amount of tax you will be paying is so small and at that point IRS doesn't really care. Hence they have a minimum $ amount set to trigger the additional paperwork process.
Seller_nRFmxiQg4EGrw
If you want to argue that the amount is too low, I can probably agree on that.
But if you think that there are not sellers out trying to cheat the system, just look back a few years (if you still can) at all of the posters trying to figure out the best way to limit their sales to $19K so that they wouldn't get a 1099, and to their thinking, not have to pay taxes.
Seller_24FzucbyGtgZS
Good news for small earners - but count on Amazon to "F" it up anyway.
Seller_5QspwJBroEwXb
The gov has always considered someone selling $600 or more as a business and not a "Hobby"
Seller_nRFmxiQg4EGrw
I agree 100%. There is no reason that you should have to pay any taxes on it IMO, although there are certainly some states and/or municipalities that disagree with us, and feel that a sales tax is due.
You paid SALES TAX. That goes only to your state or local government, and has nothing to do with INCOME TAX. Any income tax would have been paid by the party from whom you purchased your sofa.
Good for you. I also had tips constitute a significant portion of my income for years, and tracked them (to the best of my ability) to pay appropriate taxes. And I'm sure that, just as I did, you encountered many people who felt that there was no need to report that income.
And guess what? YOU DON'T! Even if you sell it for $700 on Venmo and trigger a 1099. If you are not making any profit, there are not taxes due! The 1099K changes NOTHING, at least for those who are honest. It's not even that difficult. Deducting expenses for items sold is no more difficult than deducting expenses like mortgage interest, mileage deductions, or local taxes. In fact, since the previous administration decided to tax some of us for money that was paid already as local taxes, IT'S EASIER.
But note, the people complaining are complaining not because of selling a sofa from their driveway, but by AMAZON reporting their income. Why would anyone running a business object to their income being reported unless they were going to cheat on their taxes???
Seems to me that YOU are the one getting "carried away".
Seller_nRFmxiQg4EGrw
You may or may not have paid any state or federal income tax on that money. That's not relevant.
There was no INCOME tax paid by you as part of the transaction.
Correct. Which is why you don't.
Yes, that is the correct amount for which any taxes should be due (as you noted, if there had been deductions taken previously as expenses or depreciation, that would change the formula)
Which is why I stated the same thing.
So you are repeating everything I stated as fact, but then claiming that I'm "wrong". Sorry, now you've lost me.
You admit that you should owe taxes on the profit you made from selling your furniture. So if you are honest, and pay those taxes as you stated is proper, what difference does it make if there is a form showing that transaction? If anything, the form makes it EASIER on you, as you have the information there.
Um, you are aware this is an AMAZON forum, right? And that the title of the original post directly addresses AMAZON. So no, I didn't just "throw that in". It was the original context of the original post.
I have yet to understand how an honest person such as yourself, who clearly states that there you have no problem paying the tax on the profit of something you sell, is adversely affected by this. As I see it, the only party adversely affected is Amazon and the other companies that have more paperwork to do.
Seller_nRFmxiQg4EGrw
Odd; I don't see anything about "temporary" in the Constitution regarding income tax"
"ARTICLE XVI. The Congress shall have the power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."
Except, of course, this is not done. Hasn't been done for years.
Still has nothing to do with the issue.
Seller_Z6xPEdYa7XZxm
I think you elect people so this should be a problem that could be corrected right? Seems your taxes are very high there.
Seller_DBzTQPDCouH9d
The problem is.... does our government pay attention to how much money Amazon is taking from the sellers? Maybe they should do something about that, otherwise honest American sellers are being robbed blind plus having to pay taxes on the meager amount that's left for them. We barely make anything now.
