The Biden administration is constantly trying to destroy the gig economy of America.
This time, the Internal Revenue Service (IRS) is aiming to send tax reporting 1099-K forms to Americans earning at least $600 by selling goods and services.
The new changes in the IRS laws indicate that people earning extra money from side hustles to tackle inflation are likely to end up paying more taxes.
IRS Ready to Target Gig Economy of America
Biden has repeatedly suggested he will not impose new taxes on anyone earning less than $400,000 a year. In reality, billionaires are roaming free while average Americans are facing the consequences of the so-called tax reforms of the Biden administration.
The Biden administration is aiming to tax income of as little as $600.
Reportedly, the IRS will send a 1099-K form to people receiving more than $600 from third-party apps, including PayPal, Venmo, Square, Amazon, etc. Previously, third-party apps used to send these forms for at least $20,000 of earnings.
Additionally, this involves only those people who made at least 200 transactions in a year and used to receive 1099-K forms in the past. The new law does not require any minimum number of transactions, however.
1099-K is a tax reporting form on which Americans are supposed to submit their tax information. The new tax reporting rule is being introduced due to Democrats’ American Rescue Plan passed in March last year.
Square just sent me an email that said congratulations on qualifying for a 1099-K.
Translation: Congrats, we are snitching on you to the IRS. pic.twitter.com/WOcecx0INA
— Ayesha Selden, CFP® (@AyeshaSelden) August 31, 2020
Supporters of the new rule suggested changes in the tax reporting mechanism will help Americans in acquiring Social Security and other benefits. However, critics claimed the new changes are just like another cash-grab tactic of the Biden administration.
Pressure Groups Pushing IRS To Revoke New Changes
Meanwhile, some tax reform groups are pushing Congress to roll back newly introduced 1099-K form changes.
One such group, Coalition for 1099-K Fairness, is asking the government to revoke the changes so micro businesses and side hustlers may be able to run sustainable businesses.
The #IRS emphasizes that money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable. Learn more about Form 1099-K: https://t.co/tsB6clJcST pic.twitter.com/U3HjD2eAVO
— IRSnews (@IRSnews) November 27, 2022
According to the website of the coalition, if Congress does not take immediate steps to improve the tax reporting procedure, the IRS will face immense administrative challenges as soon as January 2023.
Furthermore, the group asserted it supports legislation that can raise the 1099-K reporting threshold to at least $5,000. Some of the notable members of the coalition include PayPal, eBay, Etsy, Airbnb, and Poshmark.
The new IRS change comes at a time when many Americans are turning to side hustles to earn additional money every month, due to rising inflation. Reportedly, the gig economy has been on the rise since the outbreak of the coronavirus.
The latest statistics show nearly 44% of working Americans are looking for some seasonal job to make ends meet in the wake of the skyrocketing inflation.
However, the new IRS law can end up destroying the whole gig economy of the United States.