I have read and re-read about the new rule that went into effect in 2022, that PayPal, Venmo, Zelle are now required to report transactions exceeding $600 to IRS. These effects goods & services only, and not friends and family transactions.correct?
Here are a few scenarios / questions that I am trying to figure out regarding the above:
1) As I understand it, if I sell $2,000 dollars of various (used) goods to various different people on eBay, I will be sent a 1099-K now from eBay, as it received the funds from the buyers on my behalf and then forwarded them to me electronically. Am I
2) If I send my child $100 every month via Venmo (for a total of $1,200 for the year), how do I specify in Venmo that this is for Personal / Family – and not for goods. How does Venmo (or Zelle) make the differential in each? Is it based that thesending party has a business account, or this doesn’t matter?
3) Does the new rule mean that if I receive a total of $600+ for all individuals combined per calendar year, or is it $600+ total for each and separate individual that would trigger it? Example: Mary sends me $200 + $200 for a total of $400, John sendsme $100 five times time for a total of $500 and Larry sends me $900 as a one-time payment. Does Venmo / Zelle interpret that I have only $900, that requires the 1099-K or is it $400 + $500 + $900 for a total of $1,800? Again, the above example question
Thank you everyone for your input on these questions.
--
On Thursday, January 20, 2022 at 12:34:13 PM UTC-5, quil...@gmail.com wrote:I correct?
I have read and re-read about the new rule that went into effect in 2022, that PayPal, Venmo, Zelle are now required to report transactions exceeding $600 to IRS. These effects goods & services only, and not friends and family transactions.
Here are a few scenarios / questions that I am trying to figure out regarding the above:
1) As I understand it, if I sell $2,000 dollars of various (used) goods to various different people on eBay, I will be sent a 1099-K now from eBay, as it received the funds from the buyers on my behalf and then forwarded them to me electronically. Am
sending party has a business account, or this doesn’t matter?2) If I send my child $100 every month via Venmo (for a total of $1,200 for the year), how do I specify in Venmo that this is for Personal / Family – and not for goods. How does Venmo (or Zelle) make the differential in each? Is it based that the
sends me $100 five times time for a total of $500 and Larry sends me $900 as a one-time payment. Does Venmo / Zelle interpret that I have only $900, that requires the 1099-K or is it $400 + $500 + $900 for a total of $1,800? Again, the above example3) Does the new rule mean that if I receive a total of $600+ for all individuals combined per calendar year, or is it $600+ total for each and separate individual that would trigger it? Example: Mary sends me $200 + $200 for a total of $400, John
businesses. This is a point that has been raised by the tax professional community. At best, the IRS may have an indication that something is amiss if the 1099-K is grossly different from the tax return. (I'm thinking orders of magnitude different, not aThank you everyone for your input on these questions.
--Before getting too concerned about this, you should understand that receiving a 1009-K doesn't mean that you have to do anything with it. The information reported on the 1099-K doesn't match any amount shown on tha tax return, even for "true"
1) Possibly. If ebay processes the credit card transactions for you, then yes. If you have your own merchant banking agreement with a credit card company, that company will issue the 1099-K.has. The reporting is based on your receiving more than $600 through the transaction processor.
2) Unknown. It's possible that specifying that it's a personal/family transaction might be sufficient, but it might not. I expect that the companies will err on the side of overreporting transactions. It doesn't matter what kind of account the sender
3) It's the total of all transactions that triggers the reporting requirement. It doesn't matter if it's one transaction for >$600 or 600+ transactions for $1.
BTW, the 2022 form and the instructions for preparing the 1099-K are already available at the IRS website. irs.gov/pub/irs-pdf/f1099k.pdf and irs.gov/pub/irs-pdf/i1099k.pdf. The recipient's instructions are included in the form file.
Ira Smilovitz, EA
Leonia, NJ
I have read and re-read about the new rule that went into effect in
2022, that PayPal, Venmo, Zelle are now required to report transactions >exceeding $600 to IRS. These effects goods & services only, and not
friends and family transactions.
Here are a few scenarios / questions that I am trying to figure out
regarding the above:
1) As I understand it, if I sell $2,000 dollars of various (used) goods
to various different people on eBay, I will be sent a 1099-K now from
eBay, as it received the funds from the buyers on my behalf and then >forwarded them to me electronically. Am I correct?
2) If I send my child $100 every month via Venmo (for a total of $1,200
for the year), how do I specify in Venmo that this is for Personal /
Family - and not for goods. How does Venmo (or Zelle) make the
differential in each? Is it based that the sending party has a business >account, or this doesn't matter?
3) Does the new rule mean that if I receive a total of $600+ for all >individuals combined per calendar year, or is it $600+ total for each
and separate individual that would trigger it? Example: Mary sends me
$200 + $200 for a total of $400, John sends me $100 five times time for
a total of $500 and Larry sends me $900 as a one-time payment. Does
Venmo / Zelle interpret that I have only $900, that requires the 1099-K
or is it $400 + $500 + $900 for a total of $1,800? Again, the above
example question is for goods or services, rather than friends and
family.
I have read and re-read about the new rule that went into effect in 2022, >that PayPal, Venmo, Zelle are now required to report transactions exceeding >$600 to IRS. These effects goods & services only, and not friends and
family transactions.
Here are a few scenarios / questions that I am trying to figure out
regarding the above:
1) As I understand it, if I sell $2,000 dollars of various (used) goods to >various different people on eBay, I will be sent a 1099-K now from eBay, as >it received the funds from the buyers on my behalf and then forwarded them
to me electronically. Am I correct?
2) If I send my child $100 every month via Venmo (for a total of $1,200 for >the year), how do I specify in Venmo that this is for Personal / Family – >and not for goods. How does Venmo (or Zelle) make the differential in each? >Is it based that the sending party has a business account, or this doesn’t >matter?
3) Does the new rule mean that if I receive a total of $600+ for all >individuals combined per calendar year, or is it $600+ total for each and >separate individual that would trigger it? Example: Mary sends me $200 + >$200 for a total of $400, John sends me $100 five times time for a total of >$500 and Larry sends me $900 as a one-time payment. Does Venmo / Zelle >interpret that I have only $900, that requires the 1099-K or is it $400 + >$500 + $900 for a total of $1,800? Again, the above example question is for >goods or services, rather than friends and family.
Thank you everyone for your input on these questions.
"quil...@gmail.com" wrote in message news:87cfd95f-1819-49e3...@googlegroups.com...
Bottom line is if you are receiving actual income you should report it whether or not you receive a 1099-K. And if you are not receiving income
and you happen to get a 1099-K, I wouldn't worry about it.
--
With respect to the eBay question, I believe you are correct that you
will receive a 1099-K for receiving more than $600 through the eBay
payment system. But if, like many people, you are primarily selling
used goods which you originally purchased new, there is a good chance
you are selling these items at a net loss. In that case, I think you
can just ignore the document and not worry about it.
On 1/20/22 16:33, Rick wrote:
With respect to the eBay question, I believe you are correct that you
will receive a 1099-K for receiving more than $600 through the eBay
payment system. But if, like many people, you are primarily selling
used goods which you originally purchased new, there is a good chance you
are selling these items at a net loss. In that case, I think you can
just ignore the document and not worry about it.
Right up until you're asked to prove the net loss.
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