THE JOE BIDEN RULE: Cash App, PayPal and Venmo MUST NOW REPORT TRANSACTIONS TOTALING $600 TO THE IRS
Our current president Joe Biden may not be the average man or small business owner’s friend many believed he could have been in the last presidential election (or that he promised he would be). Joe Biden is the reason many people who desperately need to discharge their student loans in bankruptcy can’t (that’s a sore topic for me). Joe Biden may be more of a savior to the very people and businesses who don’t need his help than the people and businesses that do need his help.
I have always sensed that Joe Biden was going to benefit bigger businesses while hurting small business owners and I had a gut feeling his policies once he became President were going to have detrimental impact on small businesses and the average American. And as President, Joe Biden is not disappointing.
Joe Biden is now requiring that Venmo, CashApp, PayPal and other third-party transaction processors report transactions totaling $600 or more. Small businesses have always been required to self-report such transactions to the IRS, but prior to January 1, 2022, the IRS didn’t require these third-party payment processors to report such transactions. Joe Biden is now saying the old rules that applied to these transactions is benefiting small businesses to the detriment of other taxpayers. My question: the other taxpayers meaning “Big Business”?
Joe Biden calls this move his way to ramp up on financial enforcement and require small business owners (some of whom are barely staying afloat because of rising inflation and debasement of the dollar) to pay their fair share of taxes on these transactions. Some of these same small business owners are unable to even realize the American dream of owning a home because of the rising cost of houses in America.
Meanwhile the Federal Reserve is giving money almost interest free over to BIG BUSINESSES TO PAY CASH FOR HOUSES FOR DOUBLE, SOMETIMES TRIPLE WHAT THE MARKET MIGHT BE WILLING TO PAY. THIS HURTS THE AVERAGE AMERICAN TRYING TO BUY HOMES BECAUSE WE CAN’T COMPETE WITH THESE INSTITUTIONAL INVESTORS, BUT JOE BIDEN ISN’T CHANGING THIS RULE. Do your research on Primary Dealer Credit Facility. The Primary Dealer Credit Facility allows institutional investors to acquire credit at interest rates as low as .025% much lower than you or me can get credit. It’s these institutional investors that are SERIOUSLY inflating the housing prices and who will eventually crash the housing market. The average American can’t compete.
I digress. Let me get back to THE JOE BIDEN RULE.
Prior to January 1, 2022, the payment apps only had to send the user of the app a 1099-K form if their gross income exceeded $20,000 or more or had more than 200 transactions a year (I am almost willing to bet this was a Republican provision meant to benefit the small business owner).
Joe Biden’s new reporting law was embedded in the “March 2021 American Rescue Plan” that passed with no Republican votes. Maybe small businesses who support Democrats need to rethink some things.
THE LIGHT: The new reporting rule, however, only applies to transactions for “goods and services”, not for personal transactions like paying a friend back for buying you coffee or sending your husband half of the children’s daycare monthly payment. The new reporting rule also excludes transactions where you are selling a personal item at a loss. For example, if you bought a lamp for $100 at a store and then resold it for $50 and the buyer paid you via PayPal, this transaction will not have to be reported.
THE RECAP: for this 2022 tax year and forward, third party transactions apps will be required to send 1099-K forms to all businesses with electronic transactions greater than $600. Also, for the year 2022, tax year, make sure when reporting to IRS, your transactions are included in your gross receipts for your business. Understand that the third-party processors will have reported those transactions to the IRS already. PayPal on its site warns “the IRS will be able to cross-reference both our report and yours.”
THE RUB: Biden had originally wanted to have these third-party processors report transaction data on accounts with more than $600 aggregate inflow and outflow. This proposal was originally in Joe Biden’s “Build Back Better” plan but was raised to $10,000 after he got much pushback from the proposal. The Build Back Better plan has not been enacted yet.
Do small business owners want this “BUILD BACK BETTER PLAN” to become law?
SMALL BUSINESS OWNERS MIGHT WANT TO CONTACT THEIR CONGRESS PERSON AND SAY DON’T VOTE FOR THE BUILD BACK BETTER PLAN. THIS PLAN MAY NOT BE A FRIEND TO THE SMALL BUSINESS OWNER OR THE AVERAGE AMERICAN TRYING TO FEED THEIR FAMILIES.
Some republicans have said (and I actually must agree on this one) that Joe Biden’s proposals are basically the Biden’s administration way of “peering” into the average Americans everyday purchases.
THE “MAN” REALLY WILL BE WATCHING if Biden’s “Build Back Better Plan” passes.
CHECK OUT SHONSPEAKS DISCUSSION WITH THE GANG ON “ICE CUBE’S AUDACITY TO THINK: HAVE BLACK PEOPLE BCOME A TOOL OF VOTER SUPPRESSION AGAINST OURSELVES”
GET TO KNOW YOURSELF BETTER AND BREAK SUBCONSCIOUS PROGRAMMING, BUY JUSTIN CARSON’S