Anyone else see what was hidden in the housing bill?...
polksda
Posts: 716
Didn't see anyone posting about it, but as of 2011, anyone who receives (1) over $10,000 in PayPal payments or (2) 200 PayPal payments, in a year will have the gross amount of their payments reported to the IRS as income.
This also applies to credit card companies, Amazon Payments, Google Checkout, or any other third-party processing system.
Speculation is that state governments will want this information as well for collecting state sales tax.
The free ride of internet commerce is over.
While I'm all in favor of people paying their fair share, what I don't like is that the IRS will only be receiving half of the picture (i.e., IRS might get a report that I received $20,000 of PayPal payments in 2011, thus appearing that I owe $7,000 in income tax, but they never see the $21,000 of outgoing PayPal payments... it's up to the taxpayer to prove that not the entire amount is taxable income).
Loan someone money and they pay you back via PayPal? The whole amount is income. Pay your taxes.
I see both PayPal and eBay shrinking massively in about 2.5 years. We'll be back to checks and money orders for a lot of e-commerce...
This also applies to credit card companies, Amazon Payments, Google Checkout, or any other third-party processing system.
Speculation is that state governments will want this information as well for collecting state sales tax.
The free ride of internet commerce is over.
While I'm all in favor of people paying their fair share, what I don't like is that the IRS will only be receiving half of the picture (i.e., IRS might get a report that I received $20,000 of PayPal payments in 2011, thus appearing that I owe $7,000 in income tax, but they never see the $21,000 of outgoing PayPal payments... it's up to the taxpayer to prove that not the entire amount is taxable income).
Loan someone money and they pay you back via PayPal? The whole amount is income. Pay your taxes.
I see both PayPal and eBay shrinking massively in about 2.5 years. We'll be back to checks and money orders for a lot of e-commerce...
Post edited by polksda on
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"SOME PEOPLE CALL ME MAURICE,
CAUSE I SPEAK OF THE POMPITIOUS OF LOVE" -
This will lead to increased transactional fees.
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Speculation is that state governments will want this information as well for collecting state sales tax....
more for income tax stuff. 10000g cash transactions are tracked for a reason, lots of them, plus a return that doesnt hold water compared to it = @ss raping audit by the IRS.
that said, IRS and states share info, so sales tax might also be in the picture down the road. States might come up with there own ways too. for the states, its not as much as the people who get the money, but who pay it. lots of online purchases = no sales tax paid. If you buy something not paying sales tax, usually the state requires you to pay the use tax on it....of course few do.The free ride of internet commerce is over....
Long time comin, since there doing it slowly and methodically, there thinking long term hereWhile I'm all in favor of people paying their fair share, what I don't like is that the IRS will only be receiving half of the picture (i.e., IRS might get a report that I received $20,000 of PayPal payments in 2011, thus appearing that I owe $7,000 in income tax, but they never see the $21,000 of outgoing PayPal payments... it's up to the taxpayer to prove that not the entire amount is taxable income)....
dude, if you got that much coming in and out through paypal, you might want to look into itemizing hobby profits/loss on your return. I dont remember the particulars but i know there is a way to do it.I see both PayPal and eBay shrinking massively in about 2.5 years. We'll be back to checks and money orders for a lot of e-commerce...
It will shrink, but not by alot. Lots of businesses reporting there income for the most part use it anyway. the over 10g thing falls right in line with what they do for cash transactions, I'm actually surprised it took them this long to do it. It being reported isnt instantly a problem, but it becomes part of an overall picture......if that picture dont look right, they might want to find out whyLiving Room 2 Channel -
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... it's up to the taxpayer to prove that not the entire amount is taxable income).
Isn't that generally true for filing tax returns...? -
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I guess it was bound to happen eventually. 200 paypal transaction in a year isn't crazy, but it does suggest that the owner has a business and thus should be reported. I don't think it will change too many things functionally, just add more paperwork.
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I don't use paypal."Just because youre offended doesnt mean youre right." - Ricky Gervais
"For those who believe, no proof is necessary. For those who don't believe, no proof is possible." - Stuart Chase
"Consistency requires you to be as ignorant today as you were a year ago." - Bernard Berenson -
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Here's how I read it.
Housing bill meant to help ease the fallout of effects of declining employment/economy. Goverment adds on legislation that takes more money from the people in said declining employment/economy. Brilliant. -
I will be here to meet your vinyl needs accepting cash, checks AND money orders should this occur.
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gotta love a policy change that has little to no effect on the way you roll. George = sleeping like a baby...LOLLiving Room 2 Channel -
Schiit SYS Passive Pre. Jolida CD player. Songbird streamer. California Audio Labs Sigma II DAC, DIY 300as1/a1 Ice modules Class D amp. LSi15 with MM842 woofer upgrade, Nordost Blue Heaven and Unity interconnects.
Upstairs 2 Channel Rig -
Prometheus Ref. TVC passive pre, SAE A-205 Amp, Wiim pro streamer and Topping E50 DAC, California Audio Labs DX1 CD player, Von Schweikert VR3.5 speakers.
Studio Rig - Scarlett 18i20(Gen3) DAW, Mac Mini, Aiyma A07 Max (BridgedX2), Totem Mites -
Here's how I read it.
Housing bill meant to help ease the fallout of effects of declining employment/economy. Goverment adds on legislation that takes more money from the people in said declining employment/economy. Brilliant.
BING BING BING!!! We have a winner.
When was the last time some country taxed themselves into prosperity? Think about how many decently stable African nations taxed themselves into civil war? Can you say Rhodesia?
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you mean Zimbabwe?
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You know internet taxes are coming. Same with internet phone.
Up till now, internet telephony skated past all those 911 and
school internet access fees and taxes. The big shift in that direction
follows the big shift in buying. Normal and expected.
Do I like it? No. But somebody's got to pay for all that government."The legitimate powers of government extend to such acts only as are injurious to others. But it does me no injury for my neighbour to say there are twenty gods, or no god. It neither picks my pocket nor breaks my leg." --Thomas Jefferson -
This is a little ridiculous, especially given the current conditions. People should be allowed to make a little $crilla at home without monitoring. But I guess it won't start until 2011, so that's a relief. Kind of. But I could easily see someone buying 200 pieces of audio gear in a year and using Paypal while at the same time selling 199 other pieces of gear. And now the IRS is going to make them prove that it's not income.
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I'd have less of an issue of throwing more money at the government if I had any confidence that the money was being managed in any sane manner.
Pork, bailouts, and social engineering. Feh. -
Big Brother is watching all of you. Everything you do or say..........
Yep, as the regulars know , I just gotta say it, Paypal sucks.
RT1 -
I wonder if you keep the original reciept (for those trying different gear and reselling it as an example) and you post a lose, would you be able to right off the depriciation. It is not income then. If they would be treating individual sales as independent buisnesses that would open up lots of room for buisness deductions. For instance that trip to Polkfest coud become tax deductable. Its a stretch but potentially legal.
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daniel_paul_ wrote: »I wonder if you keep the original reciept (for those trying different gear and reselling it as an example) and you post a lose, would you be able to right off the depriciation. It is not income then. If they would be treating individual sales as independent buisnesses that would open up lots of room for buisness deductions. For instance that trip to Polkfest coud become tax deductable. Its a stretch but potentially legal.
Read the WSJ article linked to earlier. Yes, as long as you're willing to file as self-employed, you can in principle do all that stuff. And pay self-employment tax, as well.
Also, bear in mind that the taxable status of gains that anyone makes buying and then reselling stuff isn't being changed. Right now, declaring those gains is on the honor system, and a lot of people don't declare their gains/profits on (e.g.) "flipping" that yard sale "score". It is the lack of taxes paid on ill-gotten criminal gains that often leads to the charges filed against organized crime figures.
