Let's talk about the $600 IRS provision....

[Yo_Mama_Been_Loggin]

[rgbecker]

1. Let's hear the otherside of the story....

I love this bearded guy but in this case he is raising my eyebrows as he doth protest too much...could he be hiding income? This reporting by banks is nothing different from the reporting banks are doing all the time...just more of it. There is no additional burden on bank customers, just on the banks....and that is minimal as the information is all ready available to the banks and is reported on every bank statement to every customer. The only reason anyone would possibly be concerned about this, in my opinion, is because they are trying to hide income from the IRS and thus avoid taxes they owe.

Here is a good report about provision.

[link:https://www.cbsnews.com/news/treasury-proposal-to-report-bank-information-600/|

[pnwest]

2. I think he misunderstands the provision entirely.

This is about COMMERCIAL transactions totaling $600 or more for the year. For businesses that process payments through cash apps like Square or Paypal. The previous threshold for such reports was $20k, it's now dropped to $600.

The $600 is in line with other reporting requirements, such as business who pay outside contractors more than $600 in a year have to issue a 1099-NEC to the contractor. (don't know WHY $600)

A quick internet search gives more info:

The American Rescue Plan Act, which Congress passed in March, has a provision that will require cash apps like Venmo, PayPal and Zelle to file information reports on commercial transactions over $600. It goes into effect Jan. 1. Previously, cash apps were required to report only business transactions over $20,000 for accounts with at least 200 separate payments in a calendar year.

A separate Biden administration proposal concerns traditional bank accounts as well as cash apps. If implemented, it would require financial institutions to report the total amount of deposits and withdrawals from most bank accounts that exceed $600.

The proposal doesn’t track individual withdrawals, deposits or transactions in bank accounts, or transactions or payments made on cash apps such as Venmo or Paypal, the Treasury Department said.

[rgbecker]

3. I think the $600 comes from the 1099 requirement and this:

"You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 and 1040-SR instructions PDF."

Self-Employed Individuals Tax Center | Internal Revenue Service

I picture the IRS dumping the numbers into the computer and sorting out the accounts that are churning $100,000 and more and then working their way down as they identify non-payers, thus increasing collections for some of the millions owed. Harmless, unless you are a crook and foolish enough to use the banks rather than straight cash.

[Delmette2.0]

4. I agree with you about the 1099 reporting requirement.

I don't know about the Venom and other cash apps. I always thought that any transaction over $10,000 had to be reported or has that been changed?

My question is, are they going after just the larger bank accounts with multiple $600 1099's that were not included on the tax return?

Does someone who earns $12,000 a year and no dependants have to file a tax return?

[WHITT]

5. No

Last year the threshold was 12,400, but the inflation-adjusted number would be higher this year.

[Delmette2.0]

6. Thanks.