Home ECONOMY The IRS wants in on your Venmo

The IRS wants in on your Venmo

- Advertisement -

Side hustlers beware: Any income you make over $ 600 is now being reported to the Internal Revenue Service by payment apps including eBay, Venmo and Airbnb.

The new law – which is in effect for the 2022 tax year – means that payment processors must start keeping track of which users receive more than $ 600 for payments and services and give that information to the IRS.

It’s a dramatic increase in oversight from years past when annual payments had to exceed $ 20,000 to warrant gig workers getting slapped with a 1099-K – the tax form for transactions on payment platforms.

And the complication is already causing headaches. One nanny told The Post it could change her calculus when it comes to accepting work – especially on weekends.

“I love being freelance but a big part of why I love it is I can pocket extra money when I decide to work extra hours,” the childcare worker complained. “If you have to pay a bunch of tax on it, that’s wasted labor – it would make me reconsider working weekends.”

Alex Muresianu, a federal analyst at the Tax Foundation, told The Post: “The administrative burden of figuring out taxes for something like that is such a pain, some people may decide it is just not worth it. And I doubt the IRS is going to be making a lot of revenue on taxing people’s $ 10,000 side hustle. ”

The new regulation has gotten payment platforms up in arms. Etsy and eBay have joined with smaller retailers to form the Coalition for 1099-K Fairness to protect “casual online sellers and microbusinesses from unfair tax and privacy burdens.”

The group argues the new law means, “Americans who sell only used goods and owe no taxes will now get confusing IRS forms.”

They also note it creates an invasion of privacy since these companies will have to collect Social Security numbers from platform users.

The rule won’t apply to people paying back friends for a night on the town or reimbursing a concert ticket. However, its incumbent upon users to indicate whether a payment is for a personal expense like splitting the cost of a dinner or a business expense.

Another point of contention is whether individuals reselling used clothes or electronics should have to pay tax on it. If someone sells an item at a loss, they shouldn’t be forced to pay tax since they didn’t profit from the sale. However, most people don’t keep receipts for years on end to prove they sold it at a loss – a point which could create difficulty, tax experts add.

“There is a tradeoff between enforcing the law and imposing a ton of compliance burdens,” Muresianu adds. “If you’re earning a ton of income on furniture arbitrage, you should be paying taxes… but is chasing after that marginal side income worth the IRS’s time and energy?”

The IRS is already notoriously understaffed. Adding on another level of tax compliance could create even more burden for the agency.

Of course whether people will try and comply with the law remains to be seen.

Given there are still other forms of payment – like cash and Zelle – that are easy to hide from the IRS some workers may just stop using payment platforms for income.

“If I can make the description something obscure like paying back for dinner… how will they regulate it?” one gig worker told The Post. “The government should be incentivizing people to work, not the opposite,” this person noted.

.

- Advertisement -
- Advertisement -
Must Read

Texas man gets 45 years for killing neighbor amid feud over ex wife and child

NEWYou can now listen to Acesparks articles! A Houston-area man received a 45-year prison sentence Thursday for the broad daylight killing of...
- Advertisement -

Texas man arrested after making ‘terrorist threat’ toward Supreme Court

NEWYou can now listen to Acesparks articles! A man in Texas was arrested after he allegedly made a "terrorist threat" toward the...

Chick-fil-A is America’s favorite restaurant for the 8th year in a row

Chick-fil-A has maintained its position as America's favorite restaurant for eight years in a row, according to the American Customer Satisfaction Index (ACSI)....

Disneyland’s ‘Pirates of the Caribbean’ ride reopens — with a familiar face

Disneyland's "Pirates of the Caribbean" ride said "Ello, poppet" to eager parkgoers on Friday. The ride - which has been at the California...
Related News

Texas man gets 45 years for killing neighbor amid feud over ex wife and child

NEWYou can now listen to Acesparks articles! A Houston-area man received a 45-year prison sentence Thursday for the broad daylight killing of...

Texas man arrested after making ‘terrorist threat’ toward Supreme Court

NEWYou can now listen to Acesparks articles! A man in Texas was arrested after he allegedly made a "terrorist threat" toward the...

Chick-fil-A is America’s favorite restaurant for the 8th year in a row

Chick-fil-A has maintained its position as America's favorite restaurant for eight years in a row, according to the American Customer Satisfaction Index (ACSI)....

Disneyland’s ‘Pirates of the Caribbean’ ride reopens — with a familiar face

Disneyland's "Pirates of the Caribbean" ride said "Ello, poppet" to eager parkgoers on Friday. The ride - which has been at the California...

Bruce’s Beach, seized by LA in 1924, returned to black family’s descendants

Almost 100 years after the government took their land, it has been returned. This week, the Los Angeles Board of Supervisors unanimously approved...
- Advertisement -