The minimum transaction requirement is gone, which means that just one sale, property rental, or service performed for $600 will generate Form 1099-K for tax year 2022 and thereafter.
As far as I know the reporting threshold for ANY deposit is changing to $600 to catch tax cheats. If they can monitor it then they can make it stick. It doesn’t hurt my feelings as most ball python breeders are skipping out on taxes on anyway. Everyone wants a ‘breeding business’ no one wants a tax bill.
No offence, but I am glad that does not apply to the UK. Not cool it applies to USA.
Is that profit or just one sale?
Though it sucks, I am actually fine with this because I want to say I have a business and this is part of having a business.
I totally get that and respect it lumpy. I have a business in health care and have no issues with tax for that, its my living.
But someone like me with a few snakes as a hobby could easily sell a snake or two and hit that threshold.
There would be no profit if I listed my expenses. In fact a loss overall.
That’s why I asked if its profit or just sales.
Also may people make more than that selling a few old stuff on ebay.
Considering that my first litter with have a value of $1000 - ? because of the production of worlds first with 2 recessives and +2 inc dom, I will definitely hit that threshold. I don’t know if I will more then 15 boas ever.
Also I think it is on profit not sales. Hopefully someone can provide more insight. Yes the climb will be harder (maybe impossible) because of this though.
WoW. that’s a significant amount.
But as a person with my own company, even if you have to fill out a form, tax owed is usually calculated on profit not sales. at least in the UK. It must be the same in the USA.
Hopefully others can advise about the USA. But we are much the same usually.
I guess this is where records of costs and expenses are important.
If it is profit, think about all the investment you have made over the years. In the UK, I could claim costs against sales for profit for mileage, electricity, house space and a percentage of other utilities, infection control products, housing and heating equipment and so on.
That is a good thing, right?
Good for me, hope its the same for you where you are. I would be shocked if it was not.
Edit, we both live in civilised societies,
Then I am hoping for that!
I would put money on it being similar in the USA.
Bottom line, if you agree with the politics or not we are both societies’ that promote business.
Worst scenario is you will have to list income minus expenses on this new form.
Please someone with USA tax experience clarify if this is true.
The tax law itself has not changed with this new form – meaning that you only pay in taxes on profit, when your income is greater than your expenses (which has always been the case). The additional form is the IRS making it clear that you need to report ALL income over $600. If your expenses are equal to or more than your income, you will still not pay in for taxes as it will negate itself to $0.00. Hope this clears things up!
Clears it up for me thank you!
It’s $600 in gross income. The deductions come after. So if you pay $100 for something and sell it for $600 it’s getting reported. If you buy it for $1000 and sell it for $600, it’s getting reported.
Revenue (gross) minus expenses = taxable amount (profit or loss(net)) in US.
Track expenses - lots of things can legitimately account for expenses. Also, IMO you or a CPA should set up an inventory if you’re going to be reporting sales. That’s a wholly different (related) conversation.
Thank you !
So are you saying that even if my business makes less then my expenses, I would still have to pay tax?
That’s my understanding Lumpy. so if you make a loss, not tax. Tax is on profit, At least in the UK.
Like I said, I would put money on it being the same for you, we have very similar systems that promote business. Otherwise whats the point in business? Not to be political but we are both capitalist societies.
Tax is calculated on profit, which is Income - expenses. anything else would destroy business and entrepreneurism
But maybe your USA people can confirm.
thank you all for the input on this.
Honestly, this thread shows how much this forum is not like Facebook and other sites. Without the frustration and preconceived notions of politics, we are equals that can digest information and discuss things that normally would be nearly impossible to converse over. Thanks for the topic @hhpythons.