(RightWing.org) – Does it ever feel like the government is taxing you on everything you do? It isn’t — quite — but it’s working hard to close any gaps. Now the IRS is gearing up for a new opportunity to collect your money, and it’s going to hit a lot of people hard.
IRS ‘cash grab’ with fantasy sports is about to hit Americans ‘like a truck,’ tax experts say https://t.co/HPPPDbwKUG
— Fox News (@FoxNews) January 30, 2023
President Biden promised nobody earning under $400,000 would be affected by his tax plans, but while he’s left headline rates of income tax alone, he managed to sneak in a significant change to IRS rules that could catch millions of Americans unaware. It’s all down to a section in the March 2021 American Rescue Plan that changes the reporting threshold for payments made through third-party processors like PayPal and Venmo.
Up to now, those payments only needed to be reported if they were over $20,000. However, starting this tax year, that threshold has been slashed by almost 97% to just $600. On top of that, the previous threshold only applied if there were 200 or more transactions, so it mainly affected businesses or people with a very profitable side hustle. Now the limit on transactions has been removed.
Cutting the threshold in such an extreme way means a whole range of transactions will now have to be reported to the IRS and counted as taxable income. Selling a couple of concert tickets? Using eBay to rehome your old furniture? Paying a fantasy sports syndicate through Venmo? All of these could now put you squarely in the IRS’s sights.
Tax expert Bruce Willey talked to Fox News on January 29 and said the new rules are so far-reaching they add up to a “cash grab” that will hit taxpayers “like a truck.” He said most Americans will be affected by the change — which was originally supposed to start for tax year 2022 — but have no idea it’s coming. Next year, when we have to submit our 2023 tax returns, a lot of people could be in for a very unpleasant surprise.
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