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IRS Wants a Cut of Sales On eBay and Craigslist
Ponca City, We love you writes "In 2009, $60 billion worth of items were sold on eBay, meaning 'extra' money for many sellers, whose activities may provide them with taxable income. Now the Washington Post reports that beginning next year, a new law will require 'the gross amount of payment card and third-party network transactions to be reported annually to participating merchants and the IRS.' Also, for 2011 tax returns, 'taxpayers who annually sell more than $20,000 worth of goods and have more than 200 electronic transactions' will receive a new IRS form, known as 1099-K, for reporting the proceeds. The new tax issues shouldn't be a concern for people who sell just a few small items online for less than they paid for them, because as the IRS points out, income from auctions that resemble a garage or yard sale 'generally' isn't required to be reported. But if an online garage sale turns into a business with recurring sales and purchases of items for resale, it may be considered an online auction business. 'Generally, transactions resulting in a gain are reportable, regardless of whether the taxpayer is conducting a business,' says Gil Charney, principal tax researcher at The Tax Institute at H&R Block. The real reason behind the law is simple: Research shows taxpayers do a much better job of reporting taxable income when they know the IRS is receiving information about their transactions."
.. even though this has been brewing since 2004.
You didn't think the change would be good, did you?
As that Sestak criminal would say, "The era of big government has returned."
That statement is predicated upon the idea that taxing income is reasonable in the first place. That has never been shown to be true. It's a method that is bound to gain enormous complexity - as it has - as the definition of "income" is stretched and mutilated by the government.
It's long past time to simplify; right now, the costs of paying taxes added to the costs of collecting taxes and the privacy invasions of cross-checking for liabilities in normal (through banks, etc.) cash flow, are so onerous that huge numbers of people and businesses don't comply.
The mechanism needs to be changed to one where compliance is simple; validation requirements are enormously simplified; and the vast infrastructure of the IRS is not required, nor an echo of it at the state level.
What exists right now is not by any means "reasonable."
I've fallen off your lawn, and I can't get up.
Why use fact when you can ad hominem? Remember, kids:
* Fight "the corporation"
* The New Republic, Huffington Post and the Daily Show are scholarly sources devoid of bias
* 8 years of Republican control is far more dangerous than 12 years of Democratic control by the same man (i.e. FDR)
* Lackluster statements about "hating all politicians" are the illusion of apathy and impartiality
"Furthermore, even as someone with a "simple" income myself, various retirement plans (401K, IRA, Roth IRA), and college savings plans for my kids (529 plan, Educational IRA), and flexible spending accounts (childcare FSA, medical FSA) it gets complicated real quick."
You have a strange definition of complicated-I would consider those to be pretty basic things. In return for saving a bunch of taxes (money), you have to spend a minimal amount of time in research. If this takes you much more a a few hours a year, you are doing something wrong. In any case, you don't have use any of these deductions if you don't want to.
"When you work for yourself, calculating your income means tracking your gross income and deducting your costs. That's where a lot of the deductions come in. We still have to track all that crap."
Once again, there is no requirement to track your expenses. Feel free to report your income and pay your taxes. I am unsure why the deductions place an extra burden on you as I assume that as part of a business you would be tracking expenses anyway. In my experience the only time business expenses for taxes are problematic is when you don't track them until April....
"The tax code needs to die a painful death."
Why? So you can pay more taxes? As the previous poster said, the tax code is generally only as complicated as you make it. The complication is generally for your benefit.