TAX CHANGES LEAD TO REPORTING ADDITION
October 19, 2022 - Douglas Myser
Tax changes lead to reporting addition. In 2021, Congress passed the American Rescue Plan, and as part of the tax law change that was made, required the reporting of online sellers of valuables, even small items that in the past most taxpayers simply ignored. In the future, those sellers may receive a tax form, a form new that most have not noticed before, the form 1099-K. This is a new reporting requirement of this newly passed American Rescue Plan. Apparently due to the need for Covid relief, Congress felt that they needed additional revenue to pay for the Trillions being spent, and this was one of the ways that they came up with to do it. It will eventually be seen as burdensome, but no one was arguing that when they received a stimulus check during the pandemic. Tax changes lead to reporting addition.
The law will impact people who might sell a desk, other furniture, old clothes, bicycles, and other goods, will have to report those transactions, as they are now taxable. And to make sure everyone is doing just that, companies like PayPal, Venmo, marketplaces like eBay and Postmark, are all being required to adhere to the new rules. That means that eventually everyone will be forced to report those transactions, or face severe fines and penalties for not doing just that. Apparently that is the price and tradeoff that Congress made, for the stimulus checks that they paid out to Americans. I wonder how many Americans would take the tradeoff, probably most, as the Covid checks helped propel the economy when it seemed to be stuck in neutral. But as this drags on, the complaints and prospect that the law will be changed will increase as more complain that its a burdensome requirement just to sell a piece of furniture.