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Started By
Message
re: Tax, legal baws, help on use of Venmo, paypal etc
Posted on 8/17/22 at 10:04 am to LSUShock
Posted on 8/17/22 at 10:04 am to LSUShock
quote:
IRS Agent: I see you had 20 transactions at $20 every day for every weekday of 2022.
Triple Bogey: That was just my friends paying me back
IRS Agent: Really, what were they paying you back for?
Triple Bogey: Things
Dinner, I let them borrow money, bought them a drink, etc.
Prove that it wasn't.
3
Posted on 8/17/22 at 10:06 am to Triple Bogey
quote:
Prove that it wasn't.
The problem with your premise is that's not how it works
Posted on 8/17/22 at 10:08 am to Mingo Was His NameO
quote:
The problem with your premise is that's not how it works
I'm still waiting for someone to tell me how it works.
Posted on 8/17/22 at 10:10 am to Triple Bogey
quote:
I'm still waiting for someone to tell me how it works.
You have to prove it's not income. Not they have to prove that it is.
Posted on 8/17/22 at 10:17 am to Triple Bogey
quote:
Dinner, I let them borrow money, bought them a drink, etc.
Prove that it wasn't.
burden of proof is on you baw...not the other way around
Posted on 8/17/22 at 10:20 am to Triple Bogey
quote:
Why couldn't they be? How would there be any way to actually prove they weren't? Just by the amount of transactions?
Well for one there are two options when sending money in paypal/venmo.
One option is friends and family, and it is for things like paying back your brother in law for drinks, or gifting money to your nephew for his graduation.
The other option is goods and services. This is how you send money when you buy something. It also adds layers of consumer protections, and the seller pays a fee when receiving goods and services transactions. These transactions are what gets reported on the 1099.
Why would you pay your brother for drinks or gift your nephew money in a method that generates a fee for them when an alternative free option is available? Why would you need consumer protections for those type of transactions?
This post was edited on 8/17/22 at 1:49 pm
Posted on 8/17/22 at 10:25 am to Mingo Was His NameO
quote:
You have to prove it's not income. Not they have to prove that it is.
Its going to be a convoluted mess. I'm friends with my hairdresser. I send money to her, she sends money to me all the time for different things. Other than if you use a description in the transaction, there would be no other way to differentiate between us just giving each other money for an uber, a drink, etc. than an actual transaction for a service.
I manage my moms airbnb for her. She gives me 10% off each rental for managing the property. I have to send some of the money that she pays me to our housekeeper. She is already paying the tax for the rental income. Would I be taxed on the money that she sends me even though that money has already been taxed?
Posted on 8/17/22 at 10:27 am to Triple Bogey
quote:
I manage my moms airbnb for her. She gives me 10% off each rental for managing the property. I have to send some of the money that she pays me to our housekeeper. She is already paying the tax for the rental income. Would I be taxed on the money that she sends me even though that money has already been taxed?
Of course. It's income for her. She can deduct your fee as an expense. The fee you get is income to you. Just like it has been for decades.
You're making a truly idiotic argument
Posted on 8/17/22 at 10:29 am to Mingo Was His NameO
quote:
You're making a truly idiotic argument
I'm not making an argument. I'm asking questions.
Posted on 8/17/22 at 10:30 am to Triple Bogey
quote:
I'm not making an argument
quote:
Dinner, I let them borrow money, bought them a drink, etc.
Prove that it wasn't.
Posted on 8/17/22 at 10:46 am to Mingo Was His NameO
Mashable Link
quote:
As stated in the comments, a user may only receive a 1099-K form if they receive more than $600 on a Cash for Business account starting in 2022. Regular accounts seem to be exempt.
It's important to note that if you do receive a 1099-K form next year that you believe to be a mistake, you're not doomed to pay an additional tax. "These [1099-K forms] are just information reports. They don’t themselves determine tax liability," said Steven Rosenthal, senior fellow at the Urban-Brookings Tax Policy Center at the Urban Institute, to Acorns.
If you do receive a form and need to prove that you aren't hiding business transactions, you can provide receipts for bigger transactions to explain any gifted amounts or person-to-person payments.
Posted on 8/17/22 at 10:46 am to Triple Bogey
Ok?
Posted on 8/17/22 at 11:54 am to Triple Bogey
quote:No its not
Its going to be a convoluted mess
quote:If you do it the right/legal way, then its easy. If you're paying her for salon services, send the money as "goods and services". If you're sending money to split the cost of a restaurant bill or Uber, send it as "friends and family". Venmo/Paypal will separate the "goods and services" transactions from "friends and family" ones. She'll only get a 1099 for the "goods and services" payments received.
I'm friends with my hairdresser. I send money to her, she sends money to me all the time for different things. Other than if you use a description in the transaction, there would be no other way to differentiate between us just giving each other money for an uber, a drink, etc. than an actual transaction for a service.
Now if she's telling you to pay for your haircuts via "friends and family" then she's violating Paypal/Venmo's terms of service and avoiding their transaction fees, plus trying to avoid having to report that income to the IRS
quote:She should send you the money as "goods and services" and keep records of how much she pays you. Everything she pays you for managing her rental is a deductible expense for her. The amount she pays you is taxable income for you. You need to keep records of what you pay the housekeeper to be able to deduct those expenses on your taxes. And you're going to have to 1099 the housekeeper if you pay her more than $600/year and she will have to claim that income on her taxes if she wasn't already.
I manage my moms airbnb for her. She gives me 10% off each rental for managing the property. I have to send some of the money that she pays me to our housekeeper. She is already paying the tax for the rental income. Would I be taxed on the money that she sends me even though that money has already been taxed?
Posted on 8/17/22 at 12:14 pm to Tiger Prawn
It’s only complicated if you’re trying to avoid something
Posted on 8/17/22 at 12:25 pm to LSUShock
quote:
It’s only complicated if you’re trying to avoid something
Everything I do concerning money is first approached with the goal of avoiding taxes.
Posted on 8/17/22 at 12:28 pm to EA6B
quote:
Everything I do concerning money is first approached with the goal of avoiding taxes.
Avoiding and evading aren't the same thibg
Posted on 8/17/22 at 3:05 pm to Triple Bogey
quote:
Its going to be a convoluted mess. I'm friends with my hairdresser. I send money to her, she sends money to me all the time for different things. Other than if you use a description in the transaction, there would be no other way to differentiate between us just giving each other money for an uber, a drink, etc. than an actual transaction for a service.
This isn't a mess unless you are paying for her ubers and drinks while checking the box that sends the payment for "a good or service".
Posted on 8/17/22 at 3:06 pm to Tiger Prawn
quote:
She should send you the money as "goods and services" and keep records of how much she pays you. Everything she pays you for managing her rental is a deductible expense for her. The amount she pays you is taxable income for you. You need to keep records of what you pay the housekeeper to be able to deduct those expenses on your taxes. And you're going to have to 1099 the housekeeper if you pay her more than $600/year and she will have to claim that income on her taxes if she wasn't already.
That way creates self-employment tax issues. Her rental income is not subject to SE tax.
This post was edited on 9/9/22 at 3:51 am
Posted on 8/17/22 at 3:13 pm to Wilson
quote:
That way creates self-employment tax issues. Her rental income is not subject to SE tax. It would be better to have her gift him the money.
Gifting him the money for work isn't legal
Posted on 8/17/22 at 3:25 pm to Wilson
quote:For the son who is being paid to manage the properties and isn't a W-2 employee....yes
That way creates self-employment tax issues.
quote:Correct
Her rental income is not subject to SE tax
quote:Except that would be illegal because its not a gift, its payment for services being provided.
It would be better to have her gift him the money.
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