Venmo, PayPal and Zelle must report $600 in transactions to IRS
nbcnews.com
nbcnews.com
> A huge trove of secret government documents reveals for the first time how the giants of Western banking move trillions of dollars in suspicious transactions, enriching themselves and their shareholders while facilitating the work of terrorists, kleptocrats, and drug kingpins. And the US government, despite its vast powers, fails to stop it.
Even criminal convictions have had little effect beyond fines, https://wallstreetonparade.com/2020/09/3-count-felon-jpmorga...
> Every American should be horrified by this latest report from the ICIJ; every American should be outraged that the U.S. is now second only to the Cayman Islands for hiding dirty money for criminals.
That's gonna stop them criminals!
I recently rented a house and the landlord wants me to pay with Venmo. I logged into Venmo and tried to add my bank account — error. Then manually. Then debit card, all errors. I knew it wasn’t really an error, plaid showed my bank balance before erroring out.
I had to call their customer service 4x before I found someone who could see that it was a kyc block and put me through the process of verifying myself. Upload documents. Wait for them to review. Then put my account into partial freeze so I could add my bank and then verify transactions. Then talk to CS person and wait for them to manually unfreeze my account.
It took a week. Just so I can pay rent.
The US and Caymans are two very competent jurisdictions hosting financial centers. These countries were formed for liquidity and securitization of resources. Other countries did not prioritize those things, or were not co-opted by entrepreneurs seeking those things, and it shows.
I personally think the outrage should come from the compliance burdens necessary, as KYC should just be sold as a data collection that the government wants, instead of as a terrorist financing prevention method that it is incapable of doing. As the latter, the whole regime should be abolished, but as the former its just par for course. Government wants data, so what.
"Starting Jan. 1, the IRS said, if a person accrues more than $600 annually in commercial payments on an app like Venmo, then Venmo “must file and furnish a Form 1099-K” for them — reporting on all the commercial income they collected through the app.
"The tax-reporting change only applies to charges for commercial goods or services, not personal charges to friends and family, like splitting a dinner bill."
I don't know if you can even call it cynicism anymore. You just understand the news media business model. Outrageous headline -> more clicks -> more ad revenue. There would simply be less revenue if your friends only had to read one article to get the full picture.
Somehow people have become convinced that reading a stream of half-sentence headlines is the same thing as being informed about current events.
When you go to pay someone, there's a pretty big box on the screen that says "Are you paying for goods or services? Protect your purchase here" with a little toggle button, and an explanation that the seller will pay a fee in return for you being able to get a refund.
Even if you mark it as such in-app; as a business you still have a legal duty to correctly report the income your business made.
Not doing so is already illegal. This just helps the IRS catch this type of fruad easier.
There's no extra taxes or anything - the $600 or more is taxed when reported correctly (as it was before this change, and how amounts under $600 are taxed as well - business income).
Unpopular opinion, but I'm OK with eliminating this loophole.
I went to a record shop a couple of weeks ago and when I went to pay, the guy didn't take Apple Pay. Or any kind of credit card. All he took was Venmo and Facebook. Fortunately, I had cash. But if you can't even shell out $5 for a Square reader to take credit cards, you're not a business — you're a hobby.
And yes, I have owned small businesses before. Three times. Each time, I took credit cards as payment. It's known as "cost of doing business." No different than paying to put up a sign, or renting a storefront.
If you're doing a relatively low volume you might get away with it, but you are committing a crime.
However, it is definitely against the terms of use and will get their accounts suspended. As PayPal has shown, they might also confiscate any money left in the accounts.
For now. Once established it will be trivially easy to make this apply to all payments.
This is the government adding reporting requirements for transactions that are already taxable. It's just covering a gap where transactions weren't being reported.
Realistically, a few years from now Janet Yellen will testify before congress that people are laundering money by flagging transactions as personal rather than commercial and that the Treasury has the authority to require Venmo, PayPal, and Zelle to report all transactions in order to go after tax evaders and people not paying their fair share. To calm any outrage, maybe they'll raise the threshold to $1,000 as a conciliatory measure.
My point was the thing stopping Venmo from reporting on your personal transactions is not technical. As soon as the government tells them they need to report, they will comply.
Your second point is possible, but I don't see how this move really gets us closer to that, other than providing data that could be used to make the argument.
How is this different than the transition to requiring online transactions to charge sales tax?
The biggest difference is that we are dealing with a federal entity. When it comes to state sales taxes, that payment is handled by the merchant and I personally don't need to file a return with the City/State/County documenting my transactions and sending a payment or asking for a refund. The businesses themselves need to do this, and that is not unreasonable for a business.
The other difference is that the IRS' system of voluntary compliance is essentially a reconciliation of our own record book and the records that have been submitted to them. They usually match because the average person just pays income tax and that is handled by W-2's and employer withholding. When Venmo, Paypal, and Zelle report that you've done over $600 in transactions, they now have cause to ask you if you should have been paying any capital gains on those transactions. That also requires bookkeeping that you have probably never kept track of. As you probably never bothered to save the receipt on that couch you bought 10 years ago and just sold.
Here is one other scenario, let's say I loan a friend $600 through Venmo. The IRS will only know the amount of the transaction, not the context. If I get audited and tell them it was a loan with no contract, will the IRS accept that as proof it was a temporary loan and not a gift? Will they suspect I actually bought drugs? And so on. While the IRS has a record of all transactions, they will want to know what kind of transactions were occurring and will want to know why the numbers in your 1040 don't match what they are expecting from you.
Let's go back to the stone age--the 1980s.
IRS to my mother: You didn't report your income from XXXX on your tax return.
Mother to IRS: I've never even heard of XXXX let alone worked for them. I'm retired.
IRS to mother: If you believe the 1099 is wrong talk to the company to get them to fix it.
Mother to IRS: I have been unable to even locate XXXX, please provide me with contact info.
IRS to mother: We are not allowed to give out such information.
I was off at college at that point and don't know how the situation was finally resolved.
When I got a bad 1099 my former employer even sent out a letter explaining the problem (a bogus entry had made it onto all of our 1099s) and how to dispute it with the IRS but in that case they weren't going to be contesting it--the company had already gone under. I'm pretty sure my mother's case was an illegal with a forged SS card who used my mother's information--the company would contest a dispute over a 1099 because by their records it was correct.
Respond immediately if you are notified of an issue. If you are actively working to resolve the issue that will help avoid getting in a situation where wages are garnished or liens issued.
Do everything in writing, sent by registered postal mail. Nothing they tell you over the phone is official.
Keep copies of everything related to the issue forever.
The optimal strategy is to avoid interaction/scrutiny whenever possible because every interaction adds a non-zero chance that someone with a quota/chip on their shoulder/bad day is about to ruin you.
This is just to get their foot in the door. Once it's there, it's much easier to expand the surveillance activity.
However, most examples given of supposedly nefarious tax avoidance I see are simply businesses that plow a ton of money back into expanding the business, hence bringing their tax liability way down, exactly as the law intended. Amazon being the prototypical example.
Or even better, is the complaining of billionaire's having low income tax...when they have low incomes. The better use of time and energy would be to propose additional property (wealth) taxes.
Just because they take a $1 salary and get paid in stock or have tons of stock holdings that increase in value instead doesn’t mean they don’t have any money to play with to cover their own personal needs / desires, as I’m sure you’re aware. This is what people mean about avoiding the spirit of the tax while adhering to the letter of the law.
From what I understand, they way they do this is to get millions per year in personal loans from banks, secured with their stock. Then, instead of “income”, they have “debt”, but most reasonable people would still see that as “they can spend millions of dollars on whatever they’d like and they didn’t pay tax on it”. Most people would love to do this, the problem being they don’t have hundreds of millions+ in stock to secure those same types of loans.
I’m sure every politician working with tax law understands how they play the system (and how tax offshoring works for companies), yet they choose to do nothing about it as not enough lay folks complain hard enough to affect their next election. Combine that with “the car dealership” / “ISP” model, where “if we all agree to do the bad thing and hold the line, people will have no choice but to let us continue to do the bad thing”. There’s no political will to fix it among those in power, as they benefit from it too. This is why I have very little hope of ever seeing real tax reform in my lifetime in this country — the politicians willing to actually carry out the will of the people or engage in topics that would materially benefit the masses are few and far between. It’s much easier to keep everyone frothing at the mouth over tie pins and tan suits.
If you want to reduce illegal immigration, a good starting point is to look at laws and make sure they are not only fair, but easy for the would-be immigrant to follow. Most folks in the US 'illegally' started out being legal, after all, and you realistically want to close that gap.
And so we are clear, asylum seekers aren't "illegal".
Paying folks under the table is a sign of exploitation - and undocumented folks easily fall into exploitation. I would have thought a fair reading would have come to this conclusion. Of course it isn't always that way.
I suppose it depends on how you interpret the term "exploitation". Most frequently this is used implying some harm is being done to the exploited party. My comment is to argue this is not the case here, as they would be strictly worse off without this employment. The employer is certainly exploiting an opportunity to employ the undocumented worker, but (arguing about words here) that does not constitute them "being exploited". Arguably, both honest tax-paying employers and employees are "being exploited" by the government by way of it collecting income tax.
Depending on your point of view, the greatest harm here is either self-inflicted by the worker, by coming to the country and putting them self in this situation, or by the government, by inventing rules dictating that a person is not legally allowed to work, punitively disincentiving their becoming "documented" with the threat of deportation versus the convoluted immigration process, etc.
Giving it some thought, I can relate that there is some potential for exploitation in the sense that someone working under the table does not receive the same protections that a legal worker would under law, but it seems moot when the same government promising those protections says you're not entitled to work at all. Considering this, rather than outright condemning the employer, I defer to asking whether the employee is better or worse off in the end.
Many illegal immigrants pay taxes as they need an SSN (not theirs) to work.
https://www.theatlantic.com/business/archive/2016/09/undocum...
this really helps the IRS find non-compliance in the other long mandated 1099 filing
big penalties to collect
https://www.irs.gov/taxtopics/tc756
In addition, if they made less than their standard deduction, there would also be no income tax liability or filing requirement.
What probably happened was that the kid was incorrectly sent a 1099 form. This is wrong for two reasons. First, it's not needed for a personal residence or rental properties for investment, only for businesses. Second, a household employee is not a contractor, and should generally receive a W-2 (or nothing at all, in the kid's case).
If a small business wants to spend 99% of their revenue on expanding their business, they are welcome to do so and also not pay any taxes like Amazon.
amazon has revenue of $457B. 1% of that is $4.57B.
so, while amazon might be able to keep $4,570,000,000 in profit, not sure your small business owner making $1MM in revenue will be ok with $10,000 in profit.
The feds can print money to bail out the banksters and fund forever wars, so they can also relieve me of the burden of the personal tax compliance headaches and drop the personal income tax.
To write that you would be very surprised how non-partisan the reality is.
Now, many more such payments will be reported, encouraging more taxpayers under the U.S. system of "voluntary compliance" (self-reporting attested to under penalty of perjury) to be honest.
Not if the goods were for personal rather than business or investment use. Losses on sale of personal-use assets are non-deductible for income tax purposes.
1) Selling used goods at a loss is not deductible on your tax return unless you are in the business of selling used goods.
2) Unless you are selling a lot of tangible goods (i.e., you have a business selling things), you aren't even eligible to register for sales tax in most U.S. states.
3) If tax applies to the sale of a used good in this situation, it would be a use tax that is the responsibility of the buyer to report and pay.
In many areas of economic activity, there is a level of operation where the costs of complying with tax requirements far, far exceed the costs of the actual tax due.
A good example of this is trying to operate a small, wholly-owned foreign company while a US tax resident. The costs of filing a complete form 5471 can be many thousands of dollars at a minimum (and potentially much higher), even if the amount of tax due is negligible or even zero.
I don't know if there's a term for this, but it strikes me as a kind of deadweight loss, where tax authorities gain tiny amounts of additional revenue to but tax payers spend much larger amounts on compliance.
My concern with sending more and more information to tax authorities is increasing these kind of deadweight compliance losses for small operators who will owe little or no additional tax.
Another poster mentioned selling a used couch for $600 and having that be reported to the IRS. It would then be incumbent on the seller to prove it was a loss and not a capital gain. Now I assume the auditor would let the seller off the hook for something like this, but the key point is that a transaction that no one was reasonably expected to report is now reportable and must be documented.
If the transaction is marked as commercial in the app.
I also run a local youth baseball/softball lessons. I push all received funds into a paypal account. I don't profit from it, I just pay for field reservations. All money in goes out. But now, I'll have to jump through hoops. Now I ask myself if its worth it training other people's kids for free.
I'd like to see some modified rules for sufficiently small businesses--no inventory, no depreciation, you simply take expenses when they are incurred. This would especially apply to service type businesses where your expenses are consumables and tool replacement.
So for example, someone taking 100k over 50 transactions was previously unreported.
Old rules: https://www.irs.gov/businesses/understanding-your-form-1099-...
According to the treasury, the total gap is about $600B/year.
> To further ensure that everyone pays their fair share, the Administration also calls for using information that financial institutions already possess—without imposing any burden on taxpayers whatsoever—so the IRS can deploy these additional resources to audit more sophisticated tax evaders. These changes to the third-party information reports are estimated to generate $460 billion over a decade.
So about $46B/year from reporting changes.
However, contra your intuition that this will mostly impact marginal contractors, the treasury claims that the misreporting is progressive and higher earners misreport more income.
Do they actually expect us to believe this?
Ha, yes that is a funny fallacy they use. On the IRS side, they use a social graph and node based system to determine who to look into.
If one filer takes a tax deduction for a payment, the IRS then looks to the recipient to see if they paid taxes. When a mismatch occurs, typically of the recipient, they send out the "we determined that you owe us this much" letters.
From my experience just talking to people, a very large number of people really believe that only their employer or a their bank is "snitching" on them, and whenever they get a payment outside of those systems they think "they don't have to pay taxes" because "the IRS doesn't know". I really am at a loss of words of how deep tax ignorance goes.
The 1099 system and compliance behind the 1099s is also a helpful notice for the IRS' graph system, although not necessary as they can just look at the same filer's deductions, but they can coax more payments as they do have statutory penalties for not filing a 1099.
I really dislike the implication of dishonesty. For the average person the IRS is involved in your paycheck, not in your Venmo transactions and Facebook Marketplace postings. I sense this kind of reporting is only going to create resentment, and I hope it does.
Edit: I Venmo my sister money for groceries and pizza from time to time because she is in college. I'm well under the threshold for the gift-tax (as long as you are under ~$14,000 a year), but now the IRS has a record of all these transactions I have even more to worry about when it comes time to file. What happens if my "payments" are ~$700 and I don't put that amount in the gift column on my 1040? What about her? Does she need to report this as well? The IRS will know about it.
Sure, you could say I was supposed to be reporting this the whole time, but is this a reasonable expectation for transactions so minor and mundane? Were you reporting such things this whole time?
$600 reporting requirement has been $600 forever it seems. It used to be my annual lawncare expense was less than $600/year. Now I pay roughly 2x-3x and it's over $600 so I am shouldered with this burden due to inflation/COL/time and a fixed IRS dollar amount.
Just like how cash transactions >$10,000 need to be filed with IRS. That was set in the '80s I believe, when $10,000 in cash was much more substantial. It's not increased with time so the reporting burden just becomes more burdensome. Pretty soon a trip to the ATM will trigger an IRS report.
For PayPal/Venmo and similar services, they are only going to report transactions classified as "goods & services."
So it is not surprising to me that they probably lobbied somehow to be excluded since Zelle is a "cash replacement" sponsored by the banks.
Also, I would rather trust my bank than PayPal when it comes to giving out my ID or SSN. Zelle will probably become more popular in the future.
It's so the taxpayer is aware of what to report on their taxes and is aware of what is already being communicated.
Just like a W2 employee get's a W2 so they can do their taxes. It's already been communicated to the government.
As a taxpayer in our system, these documents basically serve to say "this is what the IRS knows already. When you file your taxes, you probably want to do so in a way that they can make sense of and sufficiently validates your tax payment as accurate"
I've switched to Zelle from Venmo for Craigslist sales, not because of this issue but because Venmo now charges a fee even when using my personal account.
A lot of people use these payment services to sell used personal goods for less than they paid (often, significantly less), which is not income. But now, they'll need to keep documentation of cost basis of their household goods, in case they sell them later.
Even if you're selling used goods for profit, only part of the sale is income.
I run a small resales business, and I do track COGS on sales. I often sell my personal items as well, and when I do, I just put the COGS as the sales price.
Payment kill switches or other negative incentives can constrain money velocity in selected geo-regions or industries, as a deflationary tool.
At the same time, I frequent a web forum for musicians, many of whom buy and sell instruments. I don't think most of them are thinking of it as a business, but simply enjoy trying different gear and flipping one piece to finance the next one. Many musicians also earn a certain amount of cash income.
"Never ascribe to malice that which can be adequately explained by ignorance." Discussions of tax reporting and the new PayPal rule seem to express as much confusion as annoyance. There is a widespread belief that cash income is not meant to be taxed. I think this might be due to a number of reasons, notably the fact that most people don't do their own taxes any more. Your obligations end with handing a sheaf of papers to an expert, who works on your return and (hopefully) hands a check back to you at the end. Also for this reason they don't see a difference between reportage and taxation -- a rise in reportage is equivalent to a tax increase. And they don't understand marginal taxation, so they assume $600 means they have to send $600 to the IRS.
On the other hand, those of us who really did run businesses qua businesses, and filled out our own Schedule C's (even through TurboTax), see exactly what goes into the calculation and what comes out the other end. There's a place for 1099 income but also for non-1099 income. We were already paying those taxes.
A minor disruption is that people will have to manage their personal affairs more like businesses, most notably maintaining records of their purchases so they're not on the hook for the entire sale. Buying a guitar for $600 and selling it for $601 gets you a 1099 for $601, but you only owe your marginal tax rate times one dollar. Still, knowing the cost basis so you can work it out correctly requires keeping records.
Turns out, the tax court didn't smile on depreciating an appreciating asset that demonstrably lasts 200 years.
I actually considered buying an instrument in salvage condition and paying to have it restored, since restoration is an expense. But in the final analysis, I was more interested in playing than screwing around for a few dollars in tax savings.
Besides, if it’s ever sold there is recaptured depreciation which counts as income.
Most Etsy sellers can write off some expenses for materials easily, and johnny mowing lawns can likely claim no need to file with total income below threshold, do those won't be worth much time. This is going to devastate some people with very large and unexpected it's bills.
We are owned by corporations and the rich. It's pathetic. And I'm a conservative!
If I remember correctly, the default option was "Personal gift" or something like that. Is it technically fraud to forget to flip that option now? The app didn't explain any of that to me...
Let's say I sell my old Mac on eBay, and the buyer sends me $750 using PayPal. Do I have to pay taxes on that?
If you sold it outside of eBay and the buyers used "Goods and Services" it would also be reported.
Only if a buyer used "Friends & Family" it would not be reported.
If we stop taxing businesses we could simplify the tax code and outright remove the entire capital gains category. We will never win this game of cat and mouse. The more we try, the more the burden will move down the economic ladder.
You already paying those taxes through whoever bought the beer etc, so you wouldn't owe anything. But what I think could be a headache is now increased record keeping around those transfer payments -- ie; your S/O received net $x in payments from you and may now need to report and justify them.
This is exactly the same distinction Paypal has made for over a decade; if you want purchase protection on a transaction then they collect a percentage and (now) they will also count it towards the seller's $600 reporting limit. If you are just paying a friend back you don't want to pay the transaction fee anyway and you don't need purchase protection either.
Could a hypothetical individual just charge 599, and then charge again for more? That even sounds like a stupid question, but I've heard this 600 usd number in the headlines yesterday and this morning, so I wonder the semantics.
This was buried in the same legislation supposedly drafted to help the poor. But of course, the fattest handouts were all to big banks and the rest of too big to fail corporate America.
Edit: There's a clear anti-government push in this comment section, which I don't think is representative of HN at large. I'm curious where it's coming from, if not organically, though I admit my lizard brain is more likely just pattern matching despite there not being any actual pattern at all.
a) Vietnam
b) Afghanistan
c) Iraq
That's what your tax money goes to, folks.
Is that what Etsy moms should be paying for?
I pay my US federal taxes, because it's illegal not to.
But, at a fundamental level, it's immoral to do so.
I don't think all taxes are immoral. Just US Federal taxes.
Remember that the Federal government now exists almost purely to serve lobbyists and interest groups - not the people and not the states.
There is no "them" in this false "us vs them" narrative you're constructing. It's just us. We do this to ourselves.
More detailed explanation: https://www.youtube.com/watch?v=s7tWHJfhiyo (this is the famous CCP Grey video with the animals, for those who have already seen it).
Also, even if it WERE the will of the people, it's still wrong, and immoral.
Democracy is only as good as the demos is moral. I judge the American demos to be insufficiently honest and thus insufficiently moral. Basically, each half of the country thinks that about the other half; I simply agree with both sides.
And while it's true that, on the margins, the will of the people can be nudged one way or another, you still have to find a whole lot of people to vote for you in order to get elected, and those are your fellow countrymen who do believe those wars you mentioned made sense at the time (for example). You may call those people as many names (e.g. "immoral") as you like, they're still entitled to their votes, exactly as you are.
There is no "them", it's just "us". The divisive rhetoric you're employing is, in my opinion, more problematic than the voters themselves.
I only still reside in the US because I don't want to pay the exit tax to expatriate. I'm being kept against my will. But I'll make it out eventually, when I can make it make sense tax-wise. Good riddance.
By the way, I live in a US territory, so I have no federal representation, even in theory, personally, even though I pay federal tax. Which is OK, since when I lived in the states proper, my "countrymen" never elected people I believed to be reasonable.
> Whatever happened to “Hey, I have some apples, would you like to buy them?” “Yes, thank you!” That’s as complicated as it should be to open a business in this country.
With sympathies to Ron Swanson though, I don't think it can really be that simple.
Now, if you're selling apples (and other foods), you may have to deal with health code regulations. If you open a dentist office, you'll probably fall under other regulations. You can argue if those regulations are too heavy or not.
But many products/services in do not have many (if any) regulations governing them in most states/municipalities in the US. Just say you're in business and voila, you are.
Do all these requirements protect people from their employers? Well… maybe kind of. But no, in most circumstances you can't simply start interacting with other people without a lot of red tape.
1099-K threshold in 2021: $20,000+ AND 200+ transactions
1099-K threshold in 2022: $600
For a person on the cusp, making a $600 a year may help. Now, erode that with the additional costs of filing (both financial and time) can make it no longer worthwhile.
The alternative is that the person that goes and gets a W-2 job for $600 has a mechanism which forces them to pay taxes, but the person that does odd jobs and gets paid here and there via an app has no mechanism to force them to pay taxes. How is that fair?
The requirement is for Etsy to provide the 1099 to report income that the Etsy seller already should have been reporting on their income tax return (hopefully along with corresponding expenses to offset that income).
In fact, the whole point of this requirement is to make it easier for small sellers to properly report their income to the I.R.S., because now they don't have to dig through a year's worth of receipts to figure out how much they made from what source.
Laws apply to everyone.
The idea is that it is a structure that effectively prefers larger scale businesses who have the means to mitigate both of those
A single member LLC defaults to a "disregarded entity" for income tax purposes, meaning it has no bearing on taxation or this discussion. And opting into being taxed as an S-corp (or partnership) creates even more paperwork.
Having said that, one of the great inequalities of our tax code is that individuals are not allowed to take most deductions that business take. It's patently ridiculous that a W-2 employee driving their car to work every day cannot deduct that necessary expense to have worked. But really the whole filing process needs to be simplified, the IRS needs to release tax forms as executable programs (eg python) rather than this archaic "add the lesser of line 25 or line 27 to line 3 from form 1138", and the formulas need to be set and published ahead of the tax year as to stop being ex post-facto laws.
Not a trivial amount especially for people making some money on side.
Now, to structure it properly with all the proper recordkeeping and documentation to ensure you really get the protection of an LLC when it matters, is another matter.
https://www.propublica.org/article/irs-now-audits-poor-ameri...
Though I was referring more generally to things like known pedophiles getting slaps on the wrist by the feds, the spouses of politicians making millions insider trading, politicians not facing consequences for deleting public records, ect
At least in my region, the ACLU has sued and won a ruling saying that cops can't ticket people sleeping rough if the shelters are full/not accepting people.
The sociology of this counter-narrative is super interesting though.
For whatever reason, we just don't want to take on power laws directly.
We live in this deluded world that power law distributions are something not "natural". Nature gives everything at a normal distribution. Obviously, that has nothing to do with nature. If anything it is the opposite.
Personally, I think this is the power of narrative and the way Francis Galton poisoned statistics that we haven't recovered from.
Riiiight. Which is why a corporation uses a team of well-paid lawyers, rather than the single less well-paid lawyer that the single mom would use.
This new thing is just the payment processors filing their own that just gives the IRS insight into which tax filings to match up.
A single mother selling arts and crafts already had to report earnings. Reporting doesn't mean there is a tax due. The single mother likely has many tax deductions possible just like the mega corps do.
Gusto Contractor plan does look good. Just the right price.
(Two party system is broken and neither does a good job of serving the interests of their voters. "Vote harder" isn't practically effective and displaces blame to the victims. Ineffective, selfish and corrupt leaders have captured the majority of political positions, and until we get rid of them change is impossible.)
[0] - https://www.oecd.org/development/stats/the07odagnitarget-ahi...
The US and nearly everybody else. The biggest exceptions most recently? Sweden, Luxembourg, Norway. Gee, I just can't figure out why the US doesn't match Norway (or other tiny hyper affluent European nations) on such a matter. The only real exceptional outcomes in that list are Britain and Germany, and France to a lesser degree - outside of that the entire world is largely failing badly at that supposed test.
Meanwhile during that time the US supplied nearly half the world's food aid, while only representing 4%-5% of its population. A tradition of food aid going back more than a century now.
For example:
"The U.S. contributed $3.4 billion to WFP [UN World Food Program] in 2019, which was 42% of all contributions last year." - from the UN WFP homepage. And that's just to one entity.
Globally at present the US is supplying around 40% of the world's food aid all by itself (the number used to be slightly higher in the past and I think the US should do more, however that's still astounding coming from one nation).
You know what the US should do? It should pull its military entirely out of Europe and Asia, and let Russia and China run wild (they'd promptly conquer and pillage like it was the 1930s all over again). North Korea would be in South Korea before the final US troops were out of Asia; South Korea would cease to exist as we know it today within a decade. Then we should cut that related defense spending, and redirect that former defense expenditure to meeting that 0.7% GNI target (and helping the people ravaged by the inevitable large wars, which is how we used to approach the problem circa the WW1 & WW2 eras).
I agree that the military budget is problematic, but it's short sighted to spend too much time worrying about foreign aid. It's a very cheap way to wield influence.
Entitlement costs already dwarf defense spending, and it's going to get a lot more dramatic over the next 20 years.
Entitlement costs aka the people getting money.
> Instead people take out loans and go into debt to keep up
Well that certainly depends on who you're talking about. US households at the median and above are in decent debt shape, including debt interest expenses in relation to household disposable income. The payday loan context trap for the working poor is still every bit as bad as it has ever been.
The biggest household financial threat right now are real consumer prices - including rent/housing, education, energy - rising considerably faster than wages.
~~https://media.nationalpriorities.org/uploads/presidents_fy_2...
the military budget is 50% of the US budget for FY22
https://datalab.usaspending.gov/americas-finance-guide/spend...
Sure, but this accepts the premise that a million small Etsy shops are worth the government's time, which protects the 0.1%, which is why this argument exists. To quote one of my favorite blog series:
> When they talk about raising taxes on the rich, why do they pick a "low" point and push it higher? Should the highest rates be at $250k/yr? $300k? Another way of doing it, which is precisely why they cannot do it, is start at the top and move down. "We need $1T. Ok, top five guys pay 90%. Not enough? How about top ten guys pay 90%. Not enough? Top...." I'm not advocating this or any other policy, not my place, I am pointing out that doing it the way it's done protects the 1% by letting [everyone else] act as human shields. They take the bullets, the unknown mega-rich take tinted window rides to the Hamptons. During those tumultuous 80 seconds of OWS [...] the majority of the personal attacks were against people who made <$300k, not >$50M. It's easy to hate, and so the media nudges you in the wrong direction.
https://thelastpsychiatrist.com/2012/11/hipsters_on_food_sta...
The difference here is that megacorps use legal loopholes (and pay accountants and lawyers plenty of money to find those loopholes and make sure they are allowed) to avoid paying tax while the single mother probably thinks she can get away with not doing it while she may be obligated to
You can't go after companies for follwing the law, you'd have to change the law first.. which I don't see happening personally
Edit: Don't get me wrong - I'm all for making things easier for small businesses to enable them to grow
This is what many of us politically homeless have been saying about the Dems for years. They're not here for us.
The young and idealistic see that they're not Trump and wha the bills are titled and slogans repeated on MSNBC.
But they're actively attacking working people's income. Are they giving a higher min wage? M4a? Tuition debt relief? No.
They get up at campaign time and try to put-progressive AOC but when push comes to shove, they're 90s Republicans
Under the current federal electoral system, Democrats have no power to go further. They barely got a compromised ACA passed in 2010, and the votes at the federal level have moved in Republicans' favor since then. As we just witnessed, they do not have the numbers to get paid parental leave passed.
The young and idealistic should be able to understand that AOC is not going to be able to accomplish anything on the federal level.
Why are you in favor of people cheating on their taxes?
https://www.bloomberg.com/news/articles/2021-08-18/u-s-house...
In other words, it's a one-off. Failing to mention that is highly misleading.
Source with both numbers: https://taxfoundation.org/us-households-paying-no-income-tax...
but liars can figure.
Then let them file and report it and pay no taxes like the current system intends
Yes. But when it was temporary there were also very little in terms of federal social programs that people have become quite fond of. Do you propose we get rid of those safety programs along with the income taxes that help pay for them?
There are tons of potentially productive members of society languishing because if they made any serious progress toward improving their lives they'd lose their benefits. The outcomes for children born into such households are... not great.
Have a little perspective and focus your ire on our ridiculous military budget (which is also a welfare program, mind you) instead.
I.e. close all tax loopholes, and make the tax code more sensible, so that you're not forced to cheat or end up uncompetitive.
Napkin math, I'd guess avg $5k from 100m people. Are we really collecting half a trillion dollars a year from people earning subsistence wages?
I’m not saying it come tax is oppressing lower socioeconomic classes or that they disproportionately pay into it.
My point is the opposite. The income tax system helps those classes by funding social programs and we would either need to pare back those programs or find alternative ways of funding them
If anything this is the problem. No one thinks they should pay any taxes. Everyone basically wants to free roll the structures built from taxes without paying anything.
I am hardly rich but I gladly pay taxes. I would prefer to pay less but that is the reason I vote.
If you want to blow it all up then I think the counter to that is Freud's Civilization and Its Discontents.
I even might gain personally in that world but overall it is a miserable world to live at the systems level. It is better to just pay taxes.
Or is another possibility that these institutions are positioning themselves to become actual banks with their own ATMs so that one could entirely bypass the reporting that banks do for the IRS? Can people extract money from these institutions without interfacing with a bank throughout the transaction?
Those same companies own your media, too, but they probably care far less about who you vote for.
What bothers me is cases where people are taxed when being paid back for things like dinner out, or splitting a vacation rental. That income was already taxed. Using e.g. venmo to split the bill should not result in that money being double taxed as it changes hands.
Unless you're splitting your bill using commercial transactions, you're fine.
If you want to lower the taxes on single moms, increase child credits and raise the 0% tax rate bracket to cover higher incomes. Simple. If there are tax reporting issues that make it hard for side-hustle self proprietors to claim real expenses, which could be the case, let us fix it.
But not reporting this income just because it was on a payment processor is just helping people cheating their taxes regardless of income level. That's not okay just because some of them are single moms.
Anyone that takes a tax deduction on what they feel is a business expense alerts the IRS to look for a tax payment from the recipient.
So it doesn't matter what medium the payment occurred in. You have no idea what the individual nodes in your professional graph reported for their benefit.
Get a CPA if you want to level up your understanding and advantages in society. A firm, not "your friend that does taxes" or the person with a cardboard e-filing sign on their window above the air conditioner.
This is going to confuse so many people.
On the backs of the peasants.