Lisa Reno: Tax Form Section in New Law Will Hurt Workers | Columns
MASSENA – It has been two very difficult years for my family, to say the least. Experiencing a pandemic has been a challenge on many levels – in terms of health issues, homeschooling and the roller coaster of intermittent shutdowns.
Through it all, perhaps the hardest part was living in fear each month not knowing how I was going to make ends meet, support my family, and think about paying my bills. And in the conversations I have with my neighbors, my friends and colleagues have reflected my own financial stress.
But we’re a tough bunch in upstate New York, and we’ve learned to adapt to survive. I am a single mom myself and have had to deal with constant layoffs as the economy has been in turmoil. So I’m used to finding ways to find extra income when a regular paycheck hasn’t always been in the cards.
Online markets have been constant lifesavers. Even though I’m located in a small town, these markets allow me to reach buyers from all over the world, which was especially important during a pandemic where I couldn’t always leave my home. But a relatively unknown provision hidden in the US bailout threatens all of that, despite lawmakers telling me the bill is supposed to help hard-working Americans like me.
For most of my life I have hunted for treasure in garage sales and collected antiques. More recently, I sold coins from my collection to pay the next bill, or randomly sold household items that we no longer needed to make my mortgage. Now this new law threatens this fragile balance that I have created.
Section 9674 of the American Rescue Plan Act means that the tax reporting requirements for people who sell second-hand goods in parallel will soon change. And this will apply to taxable and non-taxable income.
Whether I make hundreds of dollars or a few thousand dollars on my children’s oversized clothes – the money I use to buy them clothes, shoes, and school supplies – I’m going to receive a new specialized tax form called 1099-K. And so will most other sellers of random products online.
I am not a small business owner. I am a mother who tries to give my children a decent life. Selling my family’s belongings when times are particularly tough helps us out.
My friends and family do the same. We all try to make a living, but sometimes our jobs are not enough. Knowing how easy it is to turn to online platforms to earn extra money reassures me.
If my car’s transmission ever breaks down, I can sell my eldest daughter’s ball gown from last year online to help pay to fix it. Or if my younger daughter needs a pair of shoes, I can sell a few pairs that she no longer has, and then equip her with new sneakers.
I pay my taxes. What I don’t need are new tax forms to figure out or new regulations on that modest but necessary income I get from selling online. This new law will even report income tax-free on the sale of used goods to the IRS, meaning people like me could end up paying taxes that we don’t actually owe.
While the law may be well intentioned, I am concerned that the consequences will affect the very people the law is trying to help. Confusing tax regulations and more tax forms are the last thing we need. For this reason, I encourage other online sellers, other Americans who are just trying to get by, to do the same – to take action.
American Rescue Plan section 9674 needs to be changed. Otherwise, our country runs the risk of imposing unnecessary and serious hardship on the hard-working individuals, families and communities who are the backbone of our national economy.
Editor’s Note: People who receive payments of at least $ 20,000 or more from third-party settlement organizations such as Cash App, PayPal, Venmo, and Zelle must complete a 1099-K form. For this income obtained from January 1, the threshold will be lowered to at least $ 600. This will affect income collected throughout 2022 and must be reported on tax returns filed in 2023.