'It's another roadblock for people' - Business owner reacts to new tax law for third-party sellers - KCRG
CEDAR RAPIDS, Iowa (KCRG) - Grayson Burgess started his business, Comic Sandwiches back in 2016 out of Cedar Rapids, but sells on Etsy -- A site that hosts sellers who will likely feel the impact of the new tax law.
“Even just simple things like selling car parts through eBay,” said Burgess.
Starting next year, anyone who receives more than $600 in payments for goods or services processed by third-party payment apps like Paypal or Venmo will be taxed. That’s a big difference compared to the current threshold.
“It used to be the 1099k’s that individuals would get if they sold over $20,000 and did 200 transactions,” said Deena Struck.
Struck owns the Cedar Rapids branch of Freedom Tax Services. She says the tax requirement is staying the same, it’s the reporting that’s changing. The change is a result of finances during COVID.
“Because of the pandemic, more and more people went to making cash on the side. And so the government said we want their piece,” said Struck.
Not only will this change impact everyone who makes a significant profit off online sales, but it will also impact businesses like Struck’s.
“This form is confusing if they don’t understand how to fill it out. There’s a lot of ins and outs of what category to put this stuff into. There are businesses where some stuff doesn’t fit into this category, so it’s like where do I put it?” she said.
Burgess says he’s become familiar with filing these type of taxes since starting his business six years ago. But he’s concerned this could heavily impact the industry.
“I think it will hinder entrepreneurship with people wanting to start businesses, it’s another loophole and another roadblock for people,” said Burgess.
There are some exceptions to this law. Struck says this doesn’t include ATM transactions or app payments to friends and family. It’s just business, credit card or cash-app transactions.
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source: https://www.kcrg.com/2022/03/02/its-another-roadblock-people-business-owner-reacts-new-tax-law-third-party-sellers/
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