I'm glad they're getting a bill passed but it will make things worse for me

[Tribetime]

If they tracking bank accounts with $600 total income for the year

[Wounded Bear]

1. Why? You doing something illegal?

Just kidding.

[madville]

2. Why would it make things worse?

I report all my income and pay my taxes, my transactions shouldn’t raise any red flags.

[jimfields33]

6. It may up the vast majority of fees banks charge

These additional accounting tasks won’t get done for free.

[pnwmom]

34. The banks already keep track of their transactions. And it's all computerized.

So why should changing the amount at which they report cost so much money?

[jimfields33]

36. Any excuse to raise fees, banks will do it

Yes banks keep account of transactions. But will the IRS want a different format? Different computer program? Lots to consider.

[jcgoldie]

3. I thought I read a week ago that proposal had been dropped

Has it been resurrected in the new bill?

[lagomorph777]

4. It will certainly make things worse for Dem candidates in the mid-terms.

This is insanity.

[Ace Rothstein]

7. Yeah, not sure what they were thinking with that one.

[Kaleva]

9. In what way? It's already been dropped.

[Johnny2X2X]

5. That was already removed

And it was going to be for transactions to be analyzed. It will remain at $10K for now.

[JohnSJ]

11. That is correct, it was changed to ten thousand dollars

[MineralMan]

8. That got dropped.

You can't depend on Facebook information shared by "friends."

Besides, it wouldn't make things worse, unless you're laundering money through your bank accounts. Banks have been reporting large transactions for a very long time. They still will be, especially large cash transactions.

Unless you're doing something illegal through your bank, the government doesn't care.

[JohnSJ]

12. There is a lot people do not understand about it because of the right wing propaganda propagating

the airwaves

[MineralMan]

14. Yes.

There is a constant stream of misinformation coming from the right. Unless you can confirm things, ignore them.

[Bev54]

21. As a previous banker, for years we had to report on deposits over $10k

for businesses or personal accounts, unless, in the case of a business it was normal course for them to make regular deposits over that amount and in that case we would fill out a waiver. All deposits over $10,000, we had to have a source of funds, including lawyers trust if the money was coming from out of the country. I think the government wanted to go lower because most criminals know the $10,000 limit so they keep their deposits under that amount. If it was $600. they would have a problems with their deposits.

[Kaleva]

10. Other then making it harder to evade taxes, I don't see how.

[MineralMan]

15. Well, there are many people who are doing side businesses

these days and not reporting all of their income in their tax filings.

Vendors and others who send you more than $600 in a year are supposed to file 1099s on those payments. Of course, if you are being paid in cash, you won't get a 1099. So, people just deposit the money in their bank accounts.

So, when this $600 thing got reported, it alarmed people who are not reporting all of their income. That got dropped from the bill, though, so it's not really a matter for concern, even for those who are hiding small amounts of income from the IRS.

Of course, a guy can always keep track of income and report it accurately on tax filings, even if they don't get 1099s. That's what I've always done when I've worked side jobs for cash payments. But some folks don't like doing that, for some reason.

[TexasBushwhacker]

23. Yeah, I work for a CPA

We had a client, a home stager, who was adamant that she didn't have to pay taxes on her cash sales and that she didn't have to give 1099s to her "friends" she pays over $10K a year as helpers. Of course, she still expects to deduct what she pays them. She ripped me a new one and said she was going to find an accountant who was more "creative". I let my boss know and he said "Cut her loose". He'd rather lose a client who wants to cheat on their taxes than to help them cheat.

I'm kind of disappointed that they set the limit back to $10K. There are folks who buy pallets of returned goods from Target, Walmart, etc, then resell them, at a profit obviously, on Facebook Marketplace, Craigslist, etc. There are people who buy big houses and rent out the rooms, getting paid rent by Zelle and other payment apps. If a business accepts credit cards, it gets a 1099K to show all it's credit card income. Why aren't we doing the same thing with people paid by Zelle and other payment apps?

[MineralMan]

25. Yup. I decided long, long ago, when I started working for myself,

to declare everything accurately and pay whatever taxes I owed. Typically, I didn't owe that much, because my net income was relatively low. Except for the Self-Employment Tax. Now that one matters a lot when it comes time to sign up for Social Security. If you've hidden income for years, you will end up getting a smaller benefit for as long as you are on SS.

I did the math, and consulted my conscience. Both of those things led me to be honest with my tax filings. I'm glad I did that.

But, plenty of people are not doing that. In the end, they'll pay for it. Yes, they will.

[TexasBushwhacker]

26. Yeah, and these folks that are purchasing goods wholesale

and then selling them at a mark up are supposed to be collecting sales tax as well, so they're stealing from state and local governments when they don't. Especially ones that went to the trouble of getting a resale certificate from the state so they don't have to pay sales tax up front.

I mentioned this elsewhere and someone said Biden was killing "small businesses". The thing is, I'm not talking about someone cleaning out their garage and making a few hundred $$$. I'm talking about people who are reselling thousands of $$$ worth of merchandise a month. Yes, those profits are taxable!

[MineralMan]

29. Selling your personal property never results in a profit.

What you describe, though, is a business. You need to declare all of that income, assuming you actually made any money buying and selling stuff like that.

I did get audited by my state's sales tax authorities once. But, I kept meticulous records of what I bought and sold. The auditor came. I had my spreadsheets and reports for in-state and out-of-state sales ready for him. I showed him my box of individual sales invoices and receipts for wholesale purchases. He said, "Thanks." Looks like your reported sales are accurate, but you didn't charge customers in California for sales taxes. Instead, you paid the taxes yourself on all of those sales. You could recalculate and get a refund. I said, "It's not enough money to worry about, so I don't charge any of my customers sales tax to simplify my bookkeeping. I just pay the sales tax myself. It's easer to manage.

The auditor said, "OK. It's your business. Now, is there a good Mexican restaurant nearby where I can go for lunch?" There was, just up the street from my offices.

And that was that.

[TexasBushwhacker]

32. Exactly

But the stager that was doing everything in cash wasn't keeping meticulous records, and was deducting expenses for buying a sofa, for example, but not declaring the income when she sold it to the home buyer at a profit. Between her staging fees and her profits from reselling, her gross income was over $300K a year!

[MineralMan]

33. Then she'll get caught, I suspect, at some point.

I knew a guy who owned a jewelry store. He was proud to tell me that he never showed a profit on it, as far as the IRS knew.

Then, he turned 65 and was not in good health. Guess what? His social security payment was going to be the bare minimum. He had to keep working and keep his store open. After a while, it truly did stop being profitable.

His tax avoidance strategy failed over the long term.

[Sympthsical]

27. I shuffle money on Zelle constantly. Why would I report it?

If my partner and I had to report every single time we flicked money at each other for this or that, it'd get real annoying, real fast.

Zelle/Venmo, etc. are moves towards a cashless society. I'm rather fond of it. I haven't actually been inside a bank in over two years.

I'm sure people are getting paid for things without reporting with it, but that's very little difference from just tossing around cash. Just because I'd rather do things electronically, the government needs to leap in and monitor it all?

Hard pass.

[TexasBushwhacker]

28. I believe the move was for Zelle/Venmo to report it

You aren't making profits by moving cash between you and your partner. Someone who buys something for $10 and sells it for $20 is. Now multiply that by hundreds of transactions a year. A 1099K from a credit card processor shows your sales per month. I think the suggestion was that if Our CPA firm has to send a 1099NEC to any individual or partnership that we pay over $600 in a calendar year, why is the limit $10K a year for cash apps? That's how some folks do business.

[haele]

39. Also, gangs are reselling stolen goods through online markets and swap meets.

Typically lots of smaller value items between $10 and $100 using cash, electronic wallets and apps like Venmo.
While the average small business re-seller/service provider scammer will typically cheat the IRS out of a yearly income under six figures, the smaller shoplifting gangs who are not yet affiliated with the big gangs can easily clear half a million a year on fencing alone.
If affiliated with larger criminal organizations, they can funnel several million away from sales taxes and fees just due to the economy of scale on these small value sales.
I can see why originally the IRS wanted to see any A to B transaction over $600 a year, but affecting several million average people just to build up a long paper trail that maybe catches a couple hundred petty criminals is not an effective way to regulate.

Monitoring $10k transactions will more accurately catch real criminals. JMO.

Haele

[ForgedCrank]

16. Imagine an IRS that can monitor all of your bank transactions.

Now imagine a time when the wingers take control of government and in turn, the IRS again.
There is no world where they would't abuse this for political gain in some way. It's what they do.

[MineralMan]

31. Imagine if you kept detailed records of your transactions

and declared your income after costs and expenses on your tax filings and paid the applicable taxes. Imagine that.

That's what I did for over 60 years of self-employment and operating my small businesses. Imagine that...

[ForgedCrank]

44. My post wasn't a passive-aggressive accusation.

I'm not a law-breaker and I don't like being called one.
If you are just peachy with GOP operatives sifting through your bank records, then good for you.
I'm not. I don't like it at all.

[MineralMan]

46. Nor was mine.

My point is that whoever is looking at your banking transactions, it's important that they be in good order and make sense. While you might consider them to be private, they're really not. Plus, all it takes is a court order, and all sorts of agencies can look at them.

The best protection is to make sure everything is documented. Then, no matter who looks, they aren't going to find anything of interest to them.

[Kaleva]

38. As I follow the law, I don't know what they'd do with that info.

To supplement my SSDI and a small Vet's pension, I babysit for $4 an hour and get paid cash for it. I keep track of my hours and what I got paid and declare it on my tax return. About 3 years ago, I made about $4k babysitting and ended up sending the IRS a check for a little over $400.

but I'd agree with others that the optics on reporting on $600 or more isn't good and I'm glad they dropped it for that reason.

[jeffreyi]

13. Seems as if rules like this would make crypto very attractive.

[TexasBushwhacker]

30. Crypto transactions have to be reported if they total more than $10K a year n/t

[maxsolomon]

17. Hit and Run OP complete with poor grammar.

Drop disinformation, say it going to hurt you (how?), and then don't stick around to debate.

You should come back and self-delete.

[rso]

18. Tax

The $ 600.00 threshold has been dropped from the legislation.

[question everything]

19. It will be $10,000

And regular income and Social Security benefits will no count. $600 was crazy. We got an iPhone and attachments for about $1,000 and later I send a check to the VISA card for that amount. So is this a red flag?

I am thinking, though, that if the IRS will hire more people to handle these reports, they should hire more people to answer tax questions from individual taxpayers. Many of these positions were eliminated in the past years.

[karynnj]

20. I get that it could find a lot of under the table income

Because my husband and I did the taxes for our young adult daughters through many years, I realize that there is income that the government learns of only when you tell them -- and then you pay not just income taxes on it but both sides of the FICA taxes. Out of honesty, we included those payments. Because their incomes were so low, there was little or no income tax increase - especially as they recovered most through education credits. The cost was for the most part just the FICA taxes. (It did annoy us that this income we disclosed did not count as wages toward the earned income credit.)

[PoindexterOglethorpe]

22. I have known several people who were proud of themselves,

and thought they were very smart by working "under the table" and not paying any taxes.

Surprise, surprise, they were unable to collect any Social Security when the time came.

[Kaleva]

40. MY FIL did a lot of work for cash and now is struggling to make it on the little SS he gets.

[PoindexterOglethorpe]

47. If he'd have at least saved and invested the money he didn't pay

in taxes, he'd probably be quite well off at this point.

I don't have a lot of patience or sympathy for people who never saved a penny. Yeah, I understand that a lot of people are relatively poor and living on the edge. I've been there myself. But when I started doing better i started saving.

[Kaleva]

49. My savings is my home

My wife and I bought our current home 12 years ago for $35k. It's now valued at $250k. We have no plans on selling and it's out intent to live here as long as we are physically able to and pass it on to one of the kids.

[marie999]

24. I received a notice from Bank of America which is really going to cause me problems.

I can no longer make a transaction even between my own accounts for more than $9,999,999.99 a day.

[Kaleva]

41. I dream of having such problems!

[marie999]

45. So do I.

[Polybius]

35. Question: What if somebody has a job off the books?

Last edited Mon Oct 25, 2021, 02:23 PM - Edit history (2)

So you can't put $600 into your account, and if you do the government will ask how it got there? Can you out $500 in and $100 the following day?

[Steelrolled]

42. Generally, that is illegal as well

if you are doing to hide the $600 transaction. If you do work for cash, it is best to spend it as cash as well.

[PSPS]

37. What are you talking about. The $600 figure has never been mentioned anywhere.

[Steelrolled]

43. It would be interesting to know the details behind the original $600 proposal.

I wonder whether the IRS believes that the "real" money in evaded taxes is millions of lower income people, each evading maybe 10 thousand dollars a year.

The mega-rich are more visible, but in many cases they are probably not technically breaking the law, and there just are not enough of them.

And I suspect that lower income people are more likely to comply out of fear, or will immediately pay-up if threatened. The ultra-rich are accustomed to fight the IRS.

Edit: slight change in choice of word.

[Kaleva]

48. This is a hot topic in the Selling Meth for Fun & Profit Group here at DU

https://www.democraticunderground.com/?com=forum&id=1182