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re: Explain this $600 tax thing to me like I am 12 please...
Posted on 4/3/23 at 9:52 am to beauchristopher
Posted on 4/3/23 at 9:52 am to beauchristopher
I’m was gonna say lots of transfers go around for $600 or more seems this would be very timely accounting for all this.
0
Posted on 4/3/23 at 9:57 am to deathvalleytiger10
quote:
Biden's America.
A lot of baws learning about Reagan era tax laws (still on the books).
Posted on 4/3/23 at 10:14 am to Trevaylin
quote:
Hope you have the original receipt for that 600 dollar watch.
Be nice to your auditor ;)
(But seriously, IRS auditors are for the most part normal reasonable people. If you sold a $600 watch they aren’t going to waste their time challenging you asserting you had a $600 basis in it - not worth their time anyway.
If you sold 1,000 $600 watches, then yes, you need to be able to support your inventory valuation)
Posted on 4/3/23 at 10:29 am to Cocotheape
quote:
If you sold 1,000 $600 watches, then yes, you need to be able to support your inventory valuation)
And what if you only sold...say, 500 $350 dollar watches?
Or stuff you bought a long time ago?
Posted on 4/3/23 at 10:45 am to fr33manator
quote:
And what if you only sold...say, 500 $350 dollar watches? Or stuff you bought a long time ago?
If you are running a business (and selling 500 watches in a year is a business) you should have support for the cost of inventory. That has always been true. Nothing has changed.
I’m sympathetic to the stuff you bought a long time ago argument, but we are talking about scenarios that are extremely rare (actually getting selected for audit + sell some item that you have no record of purchase on for an amount that is large enough for the IRS to go after). Don’t be an arse to the auditor, work with them to come up with a reasonable way to establish your initial cost basis (many collectibles have market values tracked in collector’s books/magazines for instance).
This stuff happens with securities as well: buy stock decades ago, brokerage stock is held through changes ownership/ you transfer stuff around. Cost basis is never tracked or lost in the process. Solution: figure out about when you bought it, look up the price for that day, or average for the year of you can’t narrow it down to a day.
ETA: I’m not defending these reporting requirements in the IRA either, they are onerous to taxpayers. I understand what the concern is with tracking smaller payments but this is way too wide a net.
This post was edited on 4/3/23 at 10:49 am
Posted on 4/3/23 at 11:18 am to jbgleason
You get to deduct the cost of the watch, but you can't end up with a net loss.
It was supposed to take effect for 2022 but the IRS suspended it for a year because the reporting needs to be dealt with.
It was supposed to take effect for 2022 but the IRS suspended it for a year because the reporting needs to be dealt with.
Posted on 4/3/23 at 11:22 am to OceanMan
quote:
I don’t understand the point of the threshold being so low. Juice is just not worth the squeeze.
This may surprise you, but it's because Congress is lazy. THey simply took the $600 threshhold that applies to 1099-NEC and used it here. That's it. Absolutely zero thought went into this.
Because no one in Congress actually understands the tax system, nor self-prepares, they think nothing of it.
Posted on 4/3/23 at 11:25 am to jbgleason
I'm sure Zelenskyyyyyyyyy will buy himself a new drab green sweatshirt with your contribution to his war effort.
Posted on 4/3/23 at 11:53 am to armsdealer
quote:
You have to prove it wasn't income... don't you love the IRS!
With the IRS you are guilty until you prove your innocence.
Posted on 4/3/23 at 12:04 pm to jbgleason
It’s all about taxing every transaction, whether for sales tax or income tax.
Uncle Sugar and John Bel need your money for all the great things they do.
That’s sarcasm for those wondering.
Uncle Sugar and John Bel need your money for all the great things they do.
That’s sarcasm for those wondering.
This post was edited on 4/3/23 at 12:08 pm
Posted on 4/3/23 at 12:46 pm to alphaandomega
quote:
With the IRS you are guilty until you prove your innocence.
Joke's on them, now when we sell crap I'm going to do all the accounting and factor the cost of that time into each sale while I harvest those net losses to lower my overall AGI. They just lost money.
Posted on 4/3/23 at 1:20 pm to alphaandomega
quote:
With the IRS you are guilty until you prove your innocence.
I've actually had to pay penalties for *their* mistakes (not misinterpretations, but something they straight up admitted was their error.)
quote:LINK
minimum threshold of $600 in aggregate payments, regardless of the number of transactions.
If you take Venmo payments for $20 worth of Girl Scout cookies that your kid sold to 30 people, guess what. Y'all hit the reporting window.
Posted on 4/3/23 at 1:23 pm to fr33manator
quote:
How the hell would I have receipts for things I bought a decade ago?
Hell, I don't have receipts for things I bought last week much less last year.
You are not alone. Most people don't keep them. What they are hoping is that because most people didn't keep the receipts, they will pay the tax (again) out of fear of being audited. And the fear isn't entirely irrational because Biden says he is going to double the size of the IRS by hiring 87,000 new employees.
This post was edited on 4/3/23 at 1:23 pm
Posted on 4/3/23 at 2:46 pm to Dire Wolf
quote:Yep
sports betting and weed start to get legalized across the country. All of a sudden the IRS is concerned about relatively small transfers of money
quote:They'll go back to cash.
its over for the small time bookie
Posted on 4/3/23 at 3:43 pm to Tiger Prawn
quote:
When you file your taxes, you deduct the original cost basis of the item you sold. So in the end, if you sold the watch for equal or less than you originally paid for it, then it has no bearing on your taxes. But if you made a profit on the watch, the profit is now taxable income.
Why isn’t it a loss if you sold for less than original cost basis then?
Posted on 4/3/23 at 5:37 pm to jbgleason
Don't vote for Democrats
Posted on 4/3/23 at 6:24 pm to jbgleason
It’s straight up theft.
I’m ready for the day, but I need y’all all to do it with me. Stop paying your taxes. They can’t arrest us all.
And guess what? Only 42% of households need not to pay since that’s all that pays anyway.
I’m ready for the day, but I need y’all all to do it with me. Stop paying your taxes. They can’t arrest us all.
And guess what? Only 42% of households need not to pay since that’s all that pays anyway.
This post was edited on 4/3/23 at 6:25 pm
Posted on 4/3/23 at 6:29 pm to Cocotheape
quote:
A lot of baws learning about Reagan era tax laws (still on the books).
Lol there are tax laws from even before that, like just the simple fact we have income tax.
Posted on 4/3/23 at 6:34 pm to jbgleason
Think about it...everything you ever buy in life, most things will lose value.
If any one of those things happens to gain value and you sell it, then you owe capital gains tax to Uncle Sam.
Sounds fair right? (sarcasm)
If any one of those things happens to gain value and you sell it, then you owe capital gains tax to Uncle Sam.
Sounds fair right? (sarcasm)
Posted on 4/3/23 at 7:19 pm to jbgleason
quote:
I sold something that I was taxed on at time of purchase and now I am being taxed again when I sell it? How is that right?
That’s the wrong question. Very little about the taxation system in the USA is “right”. Why do some people have to pay taxes on their social security income?
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