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Ack
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Ack Sat Aug 06, 2022 6:12 pm

Keep in mind though, folks, that if the IRS considers you a business as an individual for paying on a 1099, that you can also claim business expenses to lower your tax debt. For example, you sold your items on the internet? Well now, your internet bill is technically a business expense because you use it for conducting business. The mileage accrued driving to the post office, any equipment purchases you make for cleaning/testing games, any money spent conducting research on value, etc., is now a business expense.
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Limewater Sat Aug 06, 2022 6:35 pm

Ack wrote:Keep in mind though, folks, that if the IRS considers you a business as an individual for paying on a 1099, that you can also claim business expenses to lower your tax debt. For example, you sold your items on the internet? Well now, your internet bill is technically a business expense because you use it for conducting business. The mileage accrued driving to the post office, any equipment purchases you make for cleaning/testing games, any money spent conducting research on value, etc., is now a business expense.


Maybe the portion of your internet bill proportional to how much time you actually spent on "business related" expenses. So, like, 5% of one month of your internet bill...
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Limewater Sat Aug 06, 2022 6:38 pm

Jagosaurus wrote:Heres a perfect real world example outside of gaming BST...
Mrs Jago had a friend pay her a decent amount of money to split a hotel, Ubers, and tickets on a vacation via Venmo. Now I'm going to owe taxes on that... let that sink in :oops:. They didn't even think about it bc they've been doing it for years.


This is a big deal!

Makes me glad I've avoided Zelle and Venmo...
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Jagosaurus Sat Aug 06, 2022 8:17 pm

Looks like Zelle is exempt ... for now ...

Might be a good route for those of us on RB BST ... or a combo of PayPal + Venmo under $599 each lol.

Yeah... learning moment for Mrs Jago & her buddy on Venmo. Cost us about $300 - $400 come tax time March, but at least it was budgeted vacation & not us selling something where we needed the funds for living cost.

I know a ton of people who use Venmo often to pay friends for lunches, uber, entertainment, etc. My gut is a lot of people are going to top 600 inbound easy this year without know.

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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by o.pwuaioc Sat Aug 06, 2022 9:13 pm

Jagosaurus wrote:Heres a perfect real world example outside of gaming BST...
Mrs Jago had a friend pay her a decent amount of money to split a hotel, Ubers, and tickets on a vacation via Venmo. Now I'm going to owe taxes on that... let that sink in :oops:. They didn't even think about it bc they've been doing it for years.

Are you *sure* this is how it works?

https://www.cnbc.com/2022/01/12/irs-isn ... tions.html

Splitting dinner with your friend, sending your roommate money for rent or gifting your cousin a round of birthday drinks? Don’t sweat it. “It’s not taxable,” Watson says.
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Jagosaurus Sat Aug 06, 2022 9:37 pm

@o.pwuaioc - wait ... is PayPal friends & family exempt?

If so, big difference. Doesn't save you from ebay or good/services transactions, but helps on forum BST options.

I personally don't use Venmo. Assuming there's a similar F&F option?

Can't look up right now. Clarification on both would be a huge win. I don't mind being mistaken, esp if it saves us all money :lol:

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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by o.pwuaioc Sat Aug 06, 2022 10:17 pm

Jagosaurus wrote:@o.pwuaioc - wait ... is PayPal friends & family exempt?

If so, big difference. Doesn't save you from ebay or good/services transactions, but helps on forum BST options.

I personally don't use Venmo. Assuming there's a similar F&F option?

Can't look up right now. Clarification on both would be a huge win. I don't mind being mistaken, esp if it saves us all money :lol:

That F&F on PP is exempt is my understanding. Zelle too I don't believe is counted: Zelle is like handing someone straight cash with no receipt. You can never get that money back under any circumstance. It's purpose is to send money to family and friends, not to pay for anything.

I'm no tax attorney or accountant, so I'm only going by what I read online.
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Note Sun Aug 07, 2022 1:49 am

Jagosaurus wrote:@o.pwuaioc - wait ... is PayPal friends & family exempt?

If so, big difference. Doesn't save you from ebay or good/services transactions, but helps on forum BST options.

I personally don't use Venmo. Assuming there's a similar F&F option?

Can't look up right now. Clarification on both would be a huge win. I don't mind being mistaken, esp if it saves us all money :lol:


I use Venmo quite frequently, mostly to send cash to my partner to split restaurant bills or costs of other activities. I believe the default option on Venmo is similar to PayPal F&F. More recently, a checkbox was added to indicate if the money being transferred is for a purchase.
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Ziggy587 Sun Aug 07, 2022 8:13 am

Maybe this is why PayPal changed the language when sending money. It use to be "gift," then "for family and friends," but I swear I've recently seen it say something like "Are you splitting the bill at a restaurant?" Without even looking it up, I just HAVE to assume if you're receiving money this way that it can't be included in your 1099. If I'm wrong, then I don't want to be right!

Personally, I don't think it's totally wrong for the IRS to want a 1099 if you made over X amount selling goods or something, but I think the $600 threshold is much too low. There's some retro games that cost that much! If you're selling enough games on forums in a year, then at some point it IS extra income. If you sell a couple of games in a calendar year, it's a hobby and kind of sleazy to tax (like taxing the profits from a garage sale). At the current cost of retro gaming, you could sell just a couple of things in a year and hit $600. I guess the IRS still considers that income, but in 2020, $600 in 12 months is HARDLY income. Especially on Long Island.

What's next? PayPal collecting sales tax on these transactions? You can laugh, but I bet you that has already been discussed. eBay now has to collect sales tax, why not PayPal?

Also, it's been mentioned to not hit $600 on PP then switch over to Venmo... But doesn't PayPal own Venmo? I would not be surprised if it's $600 across BOTH platforms.

Ack wrote:Keep in mind though, folks, that if the IRS considers you a business as an individual for paying on a 1099, that you can also claim business expenses to lower your tax debt. For example, you sold your items on the internet? Well now, your internet bill is technically a business expense because you use it for conducting business. The mileage accrued driving to the post office, any equipment purchases you make for cleaning/testing games, any money spent conducting research on value, etc., is now a business expense.


That's all well and good, but it would make preparing your taxes that much harder for such a small amount of money.
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Re: Alternatives to PayPal/Venmo - 1099 Tax Implications

by Ack Sun Aug 07, 2022 10:38 am

Yeah, I'm looking at this as someone who has been a 1099 employee for my primary income.
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