Do you ever feel as if the government taxes you on everything you do? It isn’t quite there yet, but it is working hard to close any gaps. The IRS is now preparing for a fresh opportunity to collect your money, and it will strike 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
While President Biden stated that no one earning less than $400,000 would be harmed by his tax plans, he managed to slip in a substantial modification to IRS standards that might catch millions of Americans off guard. It all comes down to a change in the reporting threshold for payments made through third-party processors like PayPal and Venmo in the March 2021 American Rescue Plan.
Previously, only payments in excess of $20,000 had to be recorded. However, as of this tax year, that level has been reduced by about 97% to $600. Furthermore, the prior threshold only applied if there were 200 or more transactions, affecting mostly enterprises or people with a highly profitable side hustle. The transaction limit has now been abolished.
Cutting the threshold so drastically means that a wide range of transactions must now be reported to the IRS and treated as taxable income. Selling a few concert tickets? Are you selling your old furniture on eBay? Using Venmo to pay a fantasy sports syndicate? All of these things could suddenly put you directly in the sights of the IRS.
On January 29, tax analyst Bruce Willey told Fox News that the new rules are so broad that they amount to a “cash grab” that will hit taxpayers “like a truck.” He claims that most Americans will be affected by the move, which was initially scheduled to take effect in tax year 2022, but are unaware of it. Many people may be in for a rude awakening next year, when we must file our 2023 tax forms.