Professor Deanna Newton Quoted in "Lawmakers Sound Alarm After IRS Lowers Threshold for Online Transaction Reporting" -- The National Desk
Professor Deanna S. Newton is quoted in the National Desk article, "Lawmakers Sound Alarm After IRS Lowers Threshold for Online Transaction Reporting." The article examines the consequences of the Internal Revenue Service significantly lowering the threshold for transaction reporting through payment apps to $600.
Excerpt from "Lawmakers Sound Alarm After IRS Lowers Threshold for Online Transaction Reporting"
Starting in 2023, you could get a 1099-K form, if you made more than $600 for the year online. Before this, you only got it if you had more than 200 transactions and made at least $20,000 from online platforms.
"I think the IRS is just trying to crack down on people receiving money through these digital platforms and not having to pay tax on it,” said Deanna Newton, a tax law professor at Pepperdine Caruso University.
Newton says things like personal gifts and your portion of rent should not be taxed but if you’re selling goods and services, you could be.
“So many, many people buy tickets for cheap and then they sell them,” Newton said. “For now, what I think people should do is one, if it’s for personal purposes, they should put that in the Venmo tagline or Cash App and say, this is for a gift. If not, you run the gamut of the IRS reaching out to you and saying, 'Hey, you need to pay taxes on this money.'”
Newton says it’s important to keep your records, consider getting an LLC to minimize your tax liability and remember that this is all very new, so if you get a form next year, you can dispute it if something looks off.
The complete article may be found at The National Desk