New Scheme From IRS: 30 Million Americans Will Be Targeted

today is Black Friday and because of that you have millions of Americans across the whole country who are spending the day sitting in front of their computers rubbing their hands like this looking for those sweet sweet deals however unbeknownst to them there are thousands of IRS agents who are likewise sitting in front of their government issue computers also rubbing their hands together thinking about all the new money they'll be able to shake down from the American taxpayer that's because starting this year a new IRS rule goes into effect requiring that quot third-party payment networks like PayPal venmo Amazon and square issue form 1099 K when a user receives more than $600 in gross sales from goods and services transacted in a single year earlier the threshold of gross sales was over $20,000 meaning that previously if you sold a few things on Amazon or on eBay it wouldn't really matter it would be treated the same as if you were running a small garage sale to sell off a few items and that would be it previously you would have had to sell $20,000 worth of goods before getting a $199 tax form however starting this year if you happen to be an American who made a little side income by selling things online or by doing some freelance work or by shoveling your neighbor snow if you made more than $600 well the IRS will now be putting you under the scope and forcing you to report that income as if it was an actual business venture in fact here is how the current republican-led house Ways and Means Committee over in Congress described the general situation quote thanks to Democrats more Americans who mow Lawns or sell concert tickets and used couches through venmo or PayPal will have those transactions scrutinized by the IRS starting in January of 2024 these additional tax forms are a New Year's nightmare for millions of Americans and a mess for the IRS now the reason that many people are not aware of this rule change is because it was by Design implemented essentially under the radar in fact this changing of the threshold from $20,000 down to $600 it was buried in the pages of the so-called American Rescue plan which was the $1.9 trillion economic stimulus bill that was signed into law by Joe Biden back in the year 2021 it was also 242 pages long and while at the time Joe Biden promised that his new tax regime would not Target anyone making over $400,000 it appears that in reality workingclass Americans will be the ones to feel the brunt of this new change quote the policy to reduce the gross sales threshold from $20,000 to just $600 was included in the American Rescue plan Act of 2021 according to the Joint Committee on taxation over 90% of this new tax burden will fall on middleclass families and gig workers who will be caught in the crosshairs of the Democrats tax scheme furthermore besides the added burden on working Americans the way that this new tax scheme is being rolled out is about to create massive confusion for millions of Americans that's because according to a new report from the US government accountability office you can see that report up on your screen this new tax it will result in tens of millions of additional 1099 forms being mailed out to tens of millions of Americans who are unaware of this new change many of whom don't even know how to calculate their profit loss situation in order to figure out their actual tax liability and all the while the IRS doesn't actually have the necessary staff in place to handle 30 million more 1099 forms being sent out to Americans here's in fact how the government Watchdog report here's how they describe the situation quote as a result of this rule change many taxpayers who never received form 1099 K in the past will receive them this year this could exacerbate confusion among some taxpayers such as gig workers who may not understand the taxability of their payments and taxes owed for example some of these taxpayers may not know how to calculate profit or loss and may therefore not understand the information reported on the form this puts them at risk of inaccurately reporting their incomes to the IRS or not meeting their tax obligations the IRS calculated that the new rule would result in 44 million form 1099 K being filed in the year 2024 which is an increase of roughly 30 million the tax agency does not have a plan to analyze this data to support its enforcement and Outreach activities the IRS lacks centralized leadership to make strategic decisions related to the use of information returns across the agency furthermore in terms of how this will all actually work in practice quote people who engage in such side income activities have to provide personal information including their social security number or their employer identif ification number to the third party app through which they conduct transactions such as venmo Amazon PayPal Etc once the transactions hit the $600 threshold limit the third party will send a$ 1099 K to the individual in case the person did not provide their personal information and the transaction hit the $600 limit the thirdparty app will withhold 24% of the payments collected via the app this amount will be sent to the IRS and will not be returned to the individual however the amount can be reported on the person's tax returns and then if you happen to be one of the millions of Americans who will now be receiving one of these new tax forms what you should know is that you don't necessarily owe money on whatever is written on the 1099 form instead quote a 1099 K form is what's known as an information return form submitted by Third parties like PayPal individual taxpayers can use these returns to complete their tax filings the IRS uses these 1099 K forms to verify income and taxes reported by taxpayers meaning in Practical terms that if you made $61 on Amazon this year well the $ 1099 form will inform the government of that fact and make it harder for you to not report it and if all this makes you feel disheartened it shouldn't because you should always remember that every single dollar that you spend on taxes will help to defend the dbass region over in Ukraine without you the dbass region might be in Russian hands forever so just keep that in mind when you're filling out your tax forms this upcoming year now that was just a general overview of this new change to the tax rules if this situation actually applies to you and you'd like to go deeper into this change of IRS rules how it works in practice and what the actual changes will be in your tax liability I'll throw several resources down into the description box below this video including a few other videos from actual tax experts who help to explain this rule in much greater detail than I can and all ask in return is that as you're making your way down there to those links take a small detour to smash those like And subscribe buttons so that this content can be shared out to ever more people via the YouTube algorithm hello 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