This post is mostly directed at people who live and work in the USA. It has to do with a topic that concerns me a bit, and affects me as well. If you are a published writer or a small shop owner, even if you sell your patio set (or anything) for over $600, it will affect you too. It is about the new laws under the American Rescue Plan Act of 2021. Why am I concerned? Well, for various reasons, and the first one is why are people not talking about it more, and why some people I have talked to do not even know about it (maybe because Mother Main Media is not reporting it)? Second, as I writer, and a small online shop owner, it will affect my pocket. Under the old requirements, (including 2021), a 1099K form was issued for your taxes if you made $20,000 and/or more than 200 transactions during the year (transactions varied by state so check your state guidelines). Under the new requirements, if you made $600 and above starting on January 1st 2022, you will be issued a 1099K and it will be reported to the IRS so you can pay your 2023 taxes on your small fortune of $600 plus. That is a big difference in amounts. For example, let’s say that from January 2022 until the end of the tax year, you sell a few books and you make $600 or more in gross income, you will be issued the 1099K, and will be responsible to pay taxes on that income. This will also affect how banks report your income, so it really affects everyone who has a bank account in the USA, and most people do. Banks will report to the IRS any transaction $600 and above, and don’t think that it doesn’t affect your savings account because it does not qualify as a transactional account like a checking account is. Under the new laws, a savings account will be treated as a transactional account. But it gets better, transactional accounts are not required to be insured by FDIC (Federal Deposit Insurance Corporation – what protects your money in case a bank goes kaputz). Other types of accounts will also be considered transactional accounts, see what I mean? Where is this really going?
Going back to my concern, what upsets me most is that every time I ask someone that I know (most likely) will be affected by this, they do not know or do not seem to care. How do you not care that your money/sanctity of your bank account will be monitored in such a way, and that it will be uninsured if it is labeled as transactional? Ah, but wait, most people think that taxes will go up for the rich and prosperous, sorry, but the definition of rich and prosperous has changed – you are one of them if you make $600 or more in sales, whether you sold your washing machine or your latest page turner. Somebody has to pay for all this – look in the mirror. Already 86 billion have been set aside to hire over 86,000 IRS employees who will monitor your riches. Need a job? Don’t you just love all that “rescue” power? By the way, if you have been selling on Ebay or Craigslist or Etsy or whatever, watch out you “non-tax payer criminal who abound in riches” because if you have been naughty, now you will need a tax id/number to keep selling or your selling account will be frozen. Remember, these venues must now report any gross sales over $600 or in the case of banks, any transaction over that amount, (deposits and withdrawals, yes, withdrawals too, because we need to know) – the treasure chest has been opened and you don’t have the key anymore.
How will this affect me, and most likely anyone who breathes and bleeds when poked? Although I am at peace with Uncle Sam (I have been a good girl, oh, lucky me), this $600 windfall might put me over the line a bit, resulting on a smaller refund, which is already tiny, or maybe pay something back. It all depends. Will keeping an online shop and ventures worth it if it is hurting more than it is being profitable? I will have to wait until 2023 tax season and see. Well, good luck you hardworking American, and may the force be with you. Now, don’t you be naughty, I saw that huge garage sale you had going on, you filthy rich citizen. Deposit that!