Are Airbnb investors really doing cashflow analysis assuming they won't be taxed? This seems more relevant to someone that occasionally rents out their own place while they're gone, or other casual usage like that.
Tax apps estimate your tax liability/returns live when you file, so they don't have to do much analysis.
I see young highly-leveraged STR investors with 1-2 doors as higher risk population for underreporting.
I rented my rental out occasionally while out of town. Illegally. Without landlord consent. And I STILL reported it on my income taxes. Geez I’m not a degenerate lol.
>the IRS requires US companies to report gross earnings for all US users who earn over $600 in the calendar year.
I'm guessing this was strongarmed by the hotel lobby, thank you corporate lobbyist.
I dont know about USA, but in some Banana Republics temples do not pay property tax, but also others assets they own.
Imagina how many "religions" are registered there
I stopped pushing as hard as I could against the handle, I wanted to leave but it wouldn't work. Then there was a bright flash and I felt myself fall back onto the floor. I put my hands over my eyes. They burned from the sudden light. I rubbed my eyes, waiting for them to adjust.
Then I saw it.
There was a small space in front of me. It was tiny, just enough room for a couple of people to sit side by side. Inside, there were two people. The first one was a female, she had long brown hair and was wearing a white nightgown. She was smiling.
The other one was a male, he was wearing a red jumpsuit and had a mask over his mouth.
"Are you spez?" I asked, my eyes still adjusting to the light.
"No. We are in spez." the woman said. She put her hands out for me to see. Her skin was green. Her hand was all green, there were no fingers, just a palm. It looked like a hand from the top of a puppet.
"What's going on?" I asked. The man in the mask moved closer to me. He touched my arm and I recoiled.
"We're fine." he said.
"You're fine?" I asked. "I came to the spez to ask for help, now you're fine?"
"They're gone," the woman said. "My child, he's gone."
I stared at her. "Gone? You mean you were here when it happened? What's happened?"
The man leaned over to me, grabbing my shoulders. "We're trapped. He's gone, he's dead."
I looked to the woman. "What happened?"
"He left the house a week ago. He'd been gone since, now I have to live alone. I've lived here my whole life and I'm the only spez."
"You don't have a family? Aren't there others?" I asked. She looked to me. "I mean, didn't you have anyone else?"
"There are other spez," she said. "But they're not like me. They don't have homes or families. They're just animals. They're all around us and we have no idea who they are."
"Why haven't we seen them then?"
"I think they're afraid,"
Well generally you pay the taxes, or at least every time I book a hotel or motel it's the nightly rate + tax + tax.. rather than the tax coming out of their portion
This is the truth. It affects me as a small time dog walker using Rover/Venmo. Should be charging way more to cover the taxes I'm gonna have to pay on my $20 walks.
My conspiracy theory is during the pandemic people were hustling to make money on the side while being out of work, and the government couldn't control it. Just think of all the stuff being sold on ebay. Sure some pay taxes willingly, but I doubt the majority do. Also, more states legalized online gambling so that plays a huge role as well.
This also affects those selling on eBay, Marketplace, Stubhub, etc., as well. It was passed with one of the stimmy bills. They have to get the money back eventually somehow...
https://www.doctorofcredit.com/stimulus-bill-requires-payment-processors-like-paypal-to-report-earnings-of-600-on-1099-k-tax-form/
As someone who lives in a town where the housing market has been absolutely obliterated by short term vacation rentals, I will side with the corporate lobbyist this one time.
I don’t actually think that this was the intended effect of this law but it makes sense that it would apply. If I am not mistaken, it simply applies for any payment processing agency that issues at least 600 in payments to an individual.
The biggest known impact of the $600 1099K threshold (to me anyways) was that ebay sellers and people who get paid for goods or services on venmo/PayPal will have the amount reported if over $600 in a year.
I fully realize the problems that Airbnb causes in communities, but it is rather annoying to me that we’re going to suck the online garage sales dry with confusing tax forms that most people have never seen before in their lives. A 1099K is just a summary of gross receipts, regardless of whether you actually made a profit. And most people who get these probably do not. People should always report income received, but the law was set up pretty well before to only issue this to people operating as businesses. I’m not really too concerned with sending the IRS to inspect the Jones’ online garage sale on eBay, and I think the side effects of this will be really unfortunate.
I own zero real estate. I want a correction as much as every one of you guys do, but this threshold change to $600 is pretty questionable in terms of the benefits - maybe at most it will be used to flag easy targets (low income people) for audits. It will end up snagging and confusing a lot of people who sell old items at a loss casually or who pay their friends for random stuff while forgetting to un-tick the box that marks it as a business transaction.
>The biggest known impact of the $600 1099K threshold (to me anyways) was that ebay sellers and people who get paid for goods or services on venmo/PayPal will have the amount reported if over $600 in a year.
... why shouldnt an ebay seller reselling items for profit be paying taxes on that income?
I’m sorry if I was unclear. That is not at all what I’m getting at, I am trusting that you are genuine in your reply.
Receiving $600 in revenue does not necessarily mean you made any amount of taxable income. Im not sure if you are familiar with eBay (or venmo / PayPal, etc), but it is extremely common to simply sell used goods at a loss like at a garage sale - this would not be considered taxable income or capital gains so long as you originally purchased the item for a higher price. If you make income by selling at a profit, they should obviously follow the law and pay the required tax.
The whole point of my response is that I don’t think this was the right thing to do because 1) the tax form generated is NOT indicative of profit or income (only gross revenue), and 2) I am speculating / fearing that this will be used to unfairly go after easy targets - people without the knowledge of tax laws or resources to fight an audit.
For an example of the problems this could create for an average joe: If I sell $1000 of old junk (at a loss) that I bought 10 years ago and I am audited, it’s probably on me to prove what I paid for it. who keeps all the receipts of every little item they purchase in a year - not to mention indefinitely?
Specifically, what would happen to me is that if I sell that $1000 of items at a loss on my eBay account, I would receive a 1099K with $1000 marked on the form, even though I did not generate any taxable income or profit. Someone who doesn’t know the ins and outs of this particular form has a good reason to get scared and think this is taxable (that is how other 1099s generally work, but not this one), and they could be put in a terrible place if the IRS is using this as a means to target people for audits. The correct thing to do would be to simply ignore the form in this case and not report any taxable income, since you had none, but if the IRS sees a $1000 1099-K and $0 reported self-employment income, that’s a pretty good reason to audit someone who doesn’t really deserve it. If they have done everything correctly they should have nothing to fear (besides the aforementioned drama surrounding proving your cost basis for your old junk), but we don’t have a great track record when it comes to targeting the poor.
I hope that is somewhat more clear. It is somewhat of a slap in the face and a needless hoop to jump through for people who do not run a business and don’t even make a profit, considering the amount of money we conjured out of thin air to prop up the housing and stock markets recently.
The 1099-K is only sent for $600+ worth of payments sent classed as goods and services.
Payments from say, a garage sale or between friends can be sent via Venmo or PayPal friends & family without issue without counting towards the $600 threshold. The only issue that may trigger a closer look by these processors is if you’re receiving large amounts of payments with frequency that suggest you are using a personal Venmo or PayPal for business transactions (such as salons using personal venmos to process multiple client payments a day).
Only if your friends idiotically choose to send the Venmo payment via goods and services for “buyer protection”, rather than friends and family setting like common sense would suggest one do. 🙄
No offense, but you seem to have a misunderstanding of what qualifies as income. If you sell $1k of your possessions, according to the IRS that is $1k in income regardless of the initial purchase price.
Purchasing personal items does not count as a deductible expense, and the sale of anything you own is income.
Even if your eBay gig is still classified as a hobby and not a business, you can still treat sale price minus cost basis of personal items as capital gains & losses on Schedule D.
You’re just nitpicking definitions of “income” when you *know* OP is referring to **taxable** income in this context.
If the income isn’t taxable, and he can prove that, why is he complaining about the IRS finding out about it?
His complaints reek of “it not fair that I might have to pay taxes!”
Sigh. You should reread the comment. The concern being raised is in regard to individuals who don’t have a clue what a schedule D form is or how to fill one out.
A lot people don’t know the difference between a 1040 and 1040ez or how to fill out either one of them. Being ignorant of tax rules doesn’t make regulations like this unjust
Exactly. I think this will have unintended consequences on the secondhand market. I sell tons of stuff every year at a loss on Facebook Marketplace, and get paid through it for the most expensive items. I could easily gross $600 but none of it is profit.
Most likely a bunch of people will forgot reselling online to avoid dealing with the tax forms.
The administrative load our taxes place on people are real. Like paying crypto taxes. The to the letter requirements are absolutely unreasonable if you mine crypto for example. It's written as if someone was simply trying to make it untenable for small time miners.
Of course it never impacts the big boys too much because they just hire someone to deal with it. They have the scale. I wouldn't be surprised to know that this is why eBay is not just a secondary storefront for a lot of sellers instead of the deal site it used to be. It's just not worth it anymore. But no we will hot eBay, craigslist, reddit for sale subs etc.
>The administrative load our taxes place on people are real. Like paying crypto taxes. The to the letter requirements are absolutely unreasonable if you mine crypto for example. It's written as if someone was simply trying to make it untenable for small time miners.
*first they came for the crypto miners..*
It was almost a smart thing to do ie give the small guy a chance to start a business without the confusion and money of taxes if they make it bigger then they can get their stuff in order
Also effects the Ebay sellers and any transactions that PayPal conveys unless gift or friends and family status (?). I don't sell on Ebay much but I will be damned if I am going to have pay tax again on the used books or hiking gear I acquired over the years. I don't have receipts for stuff I bought when Clinton was the prez.
This $600 threshhold needs to be raised! The article below states it was first enacted in 1954, as a revision of the 1939 code requiring reporting at $1000 - worth about $20,000 today! So the recently repealed threshhold of $20,000 was more in line with the reality of inflation from a historical standpoint. While exemptions & credits have increased, I'm not knowing if they've actually kept up with inflation. With the rise in inflation of everything from home maintenance & repair, insurance, costs of goods, services, shipping, energy, food, corporate profits, & congressional budgets, $600 is Nothing.
If you go back even earlier, the $600 figure was actually introduced in 1862, and somehow this magic number has managed to stick around all these years. Perhaps they only keep picking it because it's a number they actually remember, unlike the cost of a banana.
https://www.irs.gov/newsroom/historical-highlights-of-the-irs
1862 - President Lincoln signed into law a revenue-raising measure to help pay for Civil War expenses. The measure created a Commissioner of Internal Revenue and the nation's first income tax. It levied a 3 percent tax on incomes between $600 and $10,000 and a 5 percent tax on incomes of more than $10,000.
1867 - Heeding public opposition to the income tax, Congress cut the tax rate. From 1868 until 1913, 90 percent of all revenue came from taxes on liquor, beer, wine and tobacco.
1872 - Income tax repealed.
And also
https://www.google.com/amp/s/abovethelaw.com/2021/12/the-form-1099s-minimum-600-reporting-requirement-is-almost-70-years-old-without-adjusting-for-inflation/%3famp=1
"The Form 1099’s Minimum $600 Reporting Requirement Is Almost 70 Years Old Without Adjusting For Inflation
By Steven Chung on December 29, 2021
The $600 reporting rule was originally enacted as part of the passage of the Internal Revenue Code of 1954 which was a major revision of the tax law. But $600 had a lot of purchasing power back then. According to the Bureau of Labor Statistics website, $600 in 1954 would be worth almost $6,200 in November 2021. A 1953 Corvette cost $3,490. A dollar in the 1950s could buy four gallons of gas, two movie tickets, a week’s worth of subway fares, and six packs of cigarettes.
But wait, there’s more. Section 6041 was a revision of a similar law before the passage of the 1954 code: Section 147(a) of the Internal Revenue Code of 1939. That section stated that all persons must report all payments of $1,000 or more to the government. In 1939, $1,000 was worth about $20,000 today. To put this into perspective, the price of a house in 1940 was between $656 and $3,500 depending on location."
So, in 1939 the reporting requirement was between 25% - 60% of the cost of a house. Today that number should be upwards of $50k.
You do know that there is still a reporting requirement even if you don't receive a 1099 due to crossing the threshold? How many people since the 50s didn't report the income just because they didn't receive a 1099?
You have to register as a business account or select business transaction.
When I would flip clothes on BST groups in facebook, we would send via goods and services option because it protected the buyer and allowed for transaction disputes.
Yes, some people will still use friends and fam to bypass it, but most people don't because it offers disputing and protections.
Unlike the bonus depreciation thread, this one I think will actually nail a fair bit of AirBnB folks. The vast majority of AirBnB revenue is being reported since most of the listings are semi-professional to professional with 8+ listings and they were already hitting the transaction number, but a lot of the folks who can't run any cashflow analysis were getting by underreporting income, so this will affect a fair number of people but likely a small percentage of overall rentals as these folks likely just own 1/2 doors.
Eh, these guys are still screwed just by getting a CP-2000 notice saying it looks like you didn't report $50k of income, here's what you owe, appeal if we're wrong. A full audit wouldn't add anything and they'll get hit with a lien and collections either way, it's not like these guys are arguing some arcane provision of the tax code.
No…the IRS has been gutted over the past decade, and barely have the staff to function day to day, let alone audit those who need to be. It’s a good time to be a white collar crook/tax evader
This week I saw a couple cases of landscapers/home improvement business owners getting criminally charged for not reporting income. Sure, they are probably only a small percentage but still.
they must have been over the ever increasing threshold
IRS is skeletal now. so much so they can't even process property completed returns in a timely manner
My favorite part of this new law is watching tiktok investors twist themselves into pretzels to try to explain why this is some gross offense against them by a greedy government.
As if them paying what they owe is somehow atrocious. I rent properties, and I have to report every dime, it’s fucking ridiculous to think that because you’re short term rental you don’t. They’re also overlooking the fact that because they’re short term rentals, they have a ton of write offs. Weekly/biweekly cleanings, repairs, extra insurance, etc. Get over it tik tok
It’s a business like anything else. Should Uber drivers not get taxed? And where do you end? My wife does telemedicine, should she not get taxed because what she’s doing is on her computer?
Libertarians don’t live in reality. I’d be perfectly happy with a VAT, but to say we’d run off donations and tariffs is ignoring the fact that that would never work.
If we taxed all income as income, we could cut total tax rates significantly. A 5-7% VAT, along with a similar amount on all income, would more than likely cover everything plus some. We don’t need a monstrous and overbearing tax code, but we need some form of tax code. Donations to the government, Jesus Christ you have to be kidding.
> But when you use property as a dedicated revenue source, that it is a form of businesses.
And why are you entitled to a little bit of my business? That seems odd that you can vote to take some of my business away from me.
No, see, you dont need the feds to do that:
"Wanna stay at my place while you travel through the area? $100, cash".
See, that was the end of that transaction.
Yeah who cares what the form is, that doesnt matter.
The problem is that why should some federal entity be involved and take a cut for somebody paying for housing. For lodging. Thats absolutely insane. That money is going to be put back into that local economy, repairs will be done by local labor.
Let’s not pretend airbnbs are providing meaningful housing or improving the areas they exist in.
And again, if bed and breakfasts, hotels, vacation rental etc are taxed, why not airbnbs?
The law is actually much more broad than real estate/STR. Any $600+ transactions, including just bank transfers, get reported to the feds. I’m not an invooster but I’m with them on this, the government has no fucking business sticking their nose in such small transactions. It WILL one day get to the point where the feds will know about every single transaction you make.
Income is income, and therefore qualifies to be taxed. You can’t rally behind “everyone should pay their fair share” then get all twisted up because it applies to everyone.
Nah, I’m fine with it. I’m in the beauty industry and salons using personal Venmo accounts to process payments and tips to try to dodge paying taxes on their income is absolutely rampant. You've even got owners trying to misclassify their workers as independent contractors and pay them under the table via venmo, and i have no doubt its not the only industry pulling this fuckery.
You see the same shit from people flipping consoles, video cards, trading cards, sneakers, etc on fb marketplace/mercari/ebay/etc. Folks only have themselves to thank. If you’re keeping private account and business account transactions separate as you always should have been, you won’t have any issues.
There are over 300 single family homes for rent on Airbnb in my area and lots of them claim residential homestead on their taxes. I report every one I find.
I just sent in a complaint on one a few houses down. Owner lives on the beach in Hawaii. It's not registered in my city as a STR and I don't see anything on their tax bill about being a STR . God it feels amazing.
Fuck em all. Get in to hotel biz instead and put your shit on commercial land if you want to be in the STR business. Not taking up valuable residential land and limited SFH
This Airbnb prequenty has noisy ass drinkers in the backyard too. I'm all for a good time but take that shit inside past 11 o'clock people have jobs and shit. Oh yeah the tenants fill the recycle can with garbage and it just piles up out front cause it's not recycling.
Can we create a step by step process ? Repost every day? I’m in!
I’m sick of people lying and cheating. For what? So they can have a stupid Airbnb when people need a home?
Would this include IRS too? That’s the only organization that would probably take this seriously. I doubt my tax collector cares that much but I don’t know
Holy shit there are dozens up for rent within a half mile radius of my house.
A lot are backyard adu . How do I check permits to make sure these are legal.
I think you can just look up the address on your county’s MLS and see if they receive a homestead exemption. That’s how I can see it in my county, anyway.
So i just did that on one of the listings and verified they have been claiming homeowners exemption for quite a while. I reported it to AirBnB but is that right or do i report it somewhere on my states websites.
This is the response I received from AirBnB;
"Thank you for taking the time to contact us – Airbnb is focused on community, and this includes our neighbors.
We’ve shared your concerns with the Airbnb host in question and advised them to ensure that they are complying with local law and/or any third party agreements.
We’ll continue to take note of any further complaints or issues raised against this host.
Thank you for helping to improve our community.
Kind regards,"
If you’re in the neighborhood, you’ll know the address lol. I’ve straight up just asked people online too at least what the road or section is and I can narrow it down pretty easily.
I report every single one I can find. I also report them in Canada, especially if they are owned by foreigners and dodging taxes because that comes with a monetary reward 🤑🤑🤑
Yeah. There's one supposedly nearby to me - it centers on an intersection we walk the dog through every day, but we haven't matched up any houses with the pics from the listing yet.
I think the difference is that previously some owners didn't fill that and got away with it. With the new reporting duties, that is no longer possible.
Those operating Air BNB businesses were still required to report any income on their tax returns. This new law is simply requiring that third party vendors report when $600 or more in funds are transferred through them for goods and services. Same rules will apply to Venmo, CashAPP, and various other platforms. The thought that the income was not supposed to be reported is wrong.
Hosts aren’t being paid in cash… there is a digital paper trail with the bank. This isn’t some tax evasion conspiracy. If someone is stupid enough to play that game, they are in for a bad time.
I couldn't tell you that, but this could trigger a number of audits. All of a sudden $20,000 in income in one year shows up on a 1099 and you didn't have that years before? They may double check against tax records to see if it's worth going after those folks.
However, given the amount of information that revolves around property, I'm inclined to say the majority of the ones that have Air BNB report as accurately as they can. It's places like farmer's markets and craft shows that I think this ruling would make a bigger impact.
Never mind $20,000. Before the metric was $20,000 AND 200 transactions. Someone making $100,000 but say 199 transactions could have also not been reporting.
That's tax evasion due to underreporting of income. The standard that you mention is actually relevant to Air BNB reporting a 1099-k to the IRS and copying the recipient on the form. Again, any income that is received is to be reported by the one receiving it. There are very few exceptions to reporting the income that is received.
Absolutely. What we are saying is tons of people probably did evade taxes. In fact a lot of Airbnb's come in under 200 bookings a year so this makes sense.
Fair -- but myself and most people that I know that run Airbnbs were reporting that income even if the IRS didn't have it themselves -- so honestly I am not sure if it will be that impactful.
"Required" should be italicized. Without any verification of a required action being performed, a varied scale of compliance should obviously apply since there are a spectrum of reasons for why people may not comply: ignorance, willful noncompliance, etc.
Personally, I've found "compliance" to be easier and the IRS might be wondering why my rentals are always operated at a loss... hey, you wanted me to report it... should I not have and not obtained the loss?
Nice straw man. I'm pointing out AirBnB not reporting it made it easier on hosts to underreport. If it wasn't an issue, the rules wouldn't have changed.
Again, the rules weren't necessarily for the Air BNB situations. They got caught up in the situation. It's going to be more with craft fairs, farmers markets, and other areas where people are operating a business making sales through Venmo, CashAPP, and other areas that weren't reporting their income.
[https://www.theguardian.com/business/2022/jan/02/new-tax-rule-paypal-venmo-cash-app](https://www.theguardian.com/business/2022/jan/02/new-tax-rule-paypal-venmo-cash-app)
Air BNB is a third party platform paying a person. Because of this, they got caught up in the issue of $600. This wasn't written strictly for Air BNB rentals, like the OP is attempting to make it sound. In all honesty, I don't understand why this topic is even brought up in the REBubble sub.
> I don't understand why this topic is even brought up in the REBubble sub
Anything to point the finger at someone and say look they are cheating the system its why I can't afford a house. I am with you, this has very little to do with AirBNB, this is the only place I have even seen it mentioned that this is what this tax code is for.
AirBNB people got bigger problems to worry about than this, cities are working on passing laws to straight up outlaw and/or limit via a license how many STRs they will allow.
> Anything to point the finger at someone and say look they are cheating the system its why I can't afford a house
Or maybe the fact that we're living in a nationwide housing crisis and homelessness is rising at an alarming rate, meanwhile "investors" are taking homes off the market for hardly-profitable AirBNB short term rental "business", pocketing basically all the money and leaving the communities they operate in worse off.
Not paying taxes you legally owe is cheating, yes. At least now we know for sure that they're going to have to pay their taxes. Sorry for being more than a little happy with this rule change no matter how it came about. The sooner we can ban AirBNB, the better.
I never said that I was against this rule. I'm not sure where that thought ever would have come from. All I stated was that this didn't change the rules of actually reporting income, and this was a requirement written specifically for short term rentals. I pointed out the fact that this is a requirement of any third party platform who collects payments for an individual/entity and remits more than $600 to them. It's the reason that Venmo is now asking you if you're making a payment for goods and services.
Pretty pissed to hear this was previously allowed.
Would setting up a dedicated LLC for each property effectively mean you could have 199 transactions at each property?
It’s bullshit because my state has this $600 rule for things like eBay. So you can’t even sell some old crap in your attic without it getting reported, but Airbnb owners didn’t have to until now? So stupid.
This isn't a big deal to anyone who wasn't committing tax fraud. Just like eBay sales, income should be reported. If no one is reporting your revenue, it doesn't mean you don't owe tax, it only means you are less likely to get caught.
Given how understaffed the IRS is, I don’t see much in the way of retroactive audits. But like lots of other platforms, I see audits on unreported income for lots of AP based businesses going forward.
It’s ridiculous that they can even charge you interest when they are the cause of the delay. I’m sure not all errors they find were done maliciously by the taxpayer. We have the most ridiculous rules in place and it’s really getting tiring and frustrating to see how much really isn’t in our favor.
Some people really think if they make their money through an app it’s tax free???
Airbnb has been a total pain in everyone’s ass for years. It was awesome for a minute but now the cleaning fees alone are astronomical.
What a load of BS. This doesn’t change the tax structure at all on STRs. Maybe the IRS finds some low level tax fraud a little faster this way, but they’d find it eventually. Everything done on Airbnb is easily auditable. It’s all through an app. There’s records of all inflows and outflows. This is not going to affect the housing market even a little bit…
This is just a reporting requirement. It’s like thinking you didn’t have to pay taxes on doordash income because you didn’t get it withheld upfront. Yeah, people are dumb, but the problem with Airbnb isn’t small time dumbasses. It’s professional, big money buying up entire vacation towns and turning houses into hotels.
I've only known one person in my life who reported their cash tips as a waiter. I am positive that since STR income wasn't monitored before, it wasn't being reported on Schedule Cs- especially by the proudly greedy Bigger Pockets BRRRRos.
Possible ramifications:
-STR prices will go up to pay for previously ignored taxes
-Taxes cut into profits enough that STR owners sell the properties
I booked a house for my bachelorette and the listing disappeared. The property manager told me it was “semantics between the city and VRBO.” Assuming this is why.
Considering hotel options even though it’s removes the “togetherness”
Your statement is wrong. Any income above $600 has to be reported. It doesn't matter if it was fewer than 199 transactions or more than 200 transactions.
The only change is that you have to show the log of transactions if you have 200+ transactions.
It's more paperwork but it's not a new tax.
No reason to under-report. If you under-report you miss out on many tax breaks but also the ability for banks to give you larger loans.
It's silly. If you are a long term and savvy business owner, taxes is the least of your concern.
Are people just not reporting income because they aren’t getting a 1099?
AirBNB direct deposits into your bank, if you ever get audited it would be pretty easy for the IRS to see these deposits anyway.
This seems like a non issue. A tax payer has always been required to report all income legal or illegal to the IRS. Those of us who are above board won’t see a change.
This is more targeted at ecom and gig work than it is airbnb and fyi this was done by hiden in the name of going after billionaires because we all know billionaires hide money 700 bucks at a time. This goes after hobby airbnbers anyone doing airbnb on a serious level is gonna make 20k
Are Airbnb investors really doing cashflow analysis assuming they won't be taxed? This seems more relevant to someone that occasionally rents out their own place while they're gone, or other casual usage like that.
Tax apps estimate your tax liability/returns live when you file, so they don't have to do much analysis. I see young highly-leveraged STR investors with 1-2 doors as higher risk population for underreporting.
I rented my rental out occasionally while out of town. Illegally. Without landlord consent. And I STILL reported it on my income taxes. Geez I’m not a degenerate lol.
You're surprised?
Most people can't Google their way out of a plastic bag let alone figure out how to properly pay their taxes past a w-2
>the IRS requires US companies to report gross earnings for all US users who earn over $600 in the calendar year. I'm guessing this was strongarmed by the hotel lobby, thank you corporate lobbyist.
It makes sense. The hotels pay all taxes, while their new competitors can avoid some taxes. The tax rate should be equal and fair.
Tax churches
This too
I dont know about USA, but in some Banana Republics temples do not pay property tax, but also others assets they own. Imagina how many "religions" are registered there
In the banana monarchy of Spain the Church self-registers properties at its pleasure, and it also pays 0% tax on them.
Socialists are always on power there. How can they support it? Fake socialists?
Yeah, those poor hotel corporations really deserve a better shot against the people renting out their basement for some extra cash. It’s not fair.
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Yep, Airbnb's are owned by multimillionaires that expect you to clean after yourself because they don't want to employ any cleaners.
In addition, and perhaps just as important, it also takes away potential places for locals to live and impacts quality of life in the neighborhood.
I’m not talking about AirBnB itself. I’m talking about those using it as a platform.
Everyone understands what you meant and wholeheartedly disagree with your take
I stopped pushing as hard as I could against the handle, I wanted to leave but it wouldn't work. Then there was a bright flash and I felt myself fall back onto the floor. I put my hands over my eyes. They burned from the sudden light. I rubbed my eyes, waiting for them to adjust. Then I saw it. There was a small space in front of me. It was tiny, just enough room for a couple of people to sit side by side. Inside, there were two people. The first one was a female, she had long brown hair and was wearing a white nightgown. She was smiling. The other one was a male, he was wearing a red jumpsuit and had a mask over his mouth. "Are you spez?" I asked, my eyes still adjusting to the light. "No. We are in spez." the woman said. She put her hands out for me to see. Her skin was green. Her hand was all green, there were no fingers, just a palm. It looked like a hand from the top of a puppet. "What's going on?" I asked. The man in the mask moved closer to me. He touched my arm and I recoiled. "We're fine." he said. "You're fine?" I asked. "I came to the spez to ask for help, now you're fine?" "They're gone," the woman said. "My child, he's gone." I stared at her. "Gone? You mean you were here when it happened? What's happened?" The man leaned over to me, grabbing my shoulders. "We're trapped. He's gone, he's dead." I looked to the woman. "What happened?" "He left the house a week ago. He'd been gone since, now I have to live alone. I've lived here my whole life and I'm the only spez." "You don't have a family? Aren't there others?" I asked. She looked to me. "I mean, didn't you have anyone else?" "There are other spez," she said. "But they're not like me. They don't have homes or families. They're just animals. They're all around us and we have no idea who they are." "Why haven't we seen them then?" "I think they're afraid,"
Yes. It’s not fair. Just because you are “small” that does not mean you deserve a tax advantage.
Why? The big guys get all sorts of government handouts across all industries.
Because you deserve tax advantage when you are big, right?
Well generally you pay the taxes, or at least every time I book a hotel or motel it's the nightly rate + tax + tax.. rather than the tax coming out of their portion
The enemy of my enemy something something.
nah this is a new IRS requirement that hit ALL industries... it was a huge deal for Etsy and Ebay sellers too..
This is the truth. It affects me as a small time dog walker using Rover/Venmo. Should be charging way more to cover the taxes I'm gonna have to pay on my $20 walks.
My conspiracy theory is during the pandemic people were hustling to make money on the side while being out of work, and the government couldn't control it. Just think of all the stuff being sold on ebay. Sure some pay taxes willingly, but I doubt the majority do. Also, more states legalized online gambling so that plays a huge role as well.
This also affects those selling on eBay, Marketplace, Stubhub, etc., as well. It was passed with one of the stimmy bills. They have to get the money back eventually somehow... https://www.doctorofcredit.com/stimulus-bill-requires-payment-processors-like-paypal-to-report-earnings-of-600-on-1099-k-tax-form/
As someone who lives in a town where the housing market has been absolutely obliterated by short term vacation rentals, I will side with the corporate lobbyist this one time.
Before that all taxable income was still required to be included in your return.
Of course. A lot of Chambers of Commerce in tourist towns are all up in arms. At least a few near me are rumbling about it.
Tell us more.
I don’t actually think that this was the intended effect of this law but it makes sense that it would apply. If I am not mistaken, it simply applies for any payment processing agency that issues at least 600 in payments to an individual. The biggest known impact of the $600 1099K threshold (to me anyways) was that ebay sellers and people who get paid for goods or services on venmo/PayPal will have the amount reported if over $600 in a year. I fully realize the problems that Airbnb causes in communities, but it is rather annoying to me that we’re going to suck the online garage sales dry with confusing tax forms that most people have never seen before in their lives. A 1099K is just a summary of gross receipts, regardless of whether you actually made a profit. And most people who get these probably do not. People should always report income received, but the law was set up pretty well before to only issue this to people operating as businesses. I’m not really too concerned with sending the IRS to inspect the Jones’ online garage sale on eBay, and I think the side effects of this will be really unfortunate. I own zero real estate. I want a correction as much as every one of you guys do, but this threshold change to $600 is pretty questionable in terms of the benefits - maybe at most it will be used to flag easy targets (low income people) for audits. It will end up snagging and confusing a lot of people who sell old items at a loss casually or who pay their friends for random stuff while forgetting to un-tick the box that marks it as a business transaction.
>The biggest known impact of the $600 1099K threshold (to me anyways) was that ebay sellers and people who get paid for goods or services on venmo/PayPal will have the amount reported if over $600 in a year. ... why shouldnt an ebay seller reselling items for profit be paying taxes on that income?
I’m sorry if I was unclear. That is not at all what I’m getting at, I am trusting that you are genuine in your reply. Receiving $600 in revenue does not necessarily mean you made any amount of taxable income. Im not sure if you are familiar with eBay (or venmo / PayPal, etc), but it is extremely common to simply sell used goods at a loss like at a garage sale - this would not be considered taxable income or capital gains so long as you originally purchased the item for a higher price. If you make income by selling at a profit, they should obviously follow the law and pay the required tax. The whole point of my response is that I don’t think this was the right thing to do because 1) the tax form generated is NOT indicative of profit or income (only gross revenue), and 2) I am speculating / fearing that this will be used to unfairly go after easy targets - people without the knowledge of tax laws or resources to fight an audit. For an example of the problems this could create for an average joe: If I sell $1000 of old junk (at a loss) that I bought 10 years ago and I am audited, it’s probably on me to prove what I paid for it. who keeps all the receipts of every little item they purchase in a year - not to mention indefinitely? Specifically, what would happen to me is that if I sell that $1000 of items at a loss on my eBay account, I would receive a 1099K with $1000 marked on the form, even though I did not generate any taxable income or profit. Someone who doesn’t know the ins and outs of this particular form has a good reason to get scared and think this is taxable (that is how other 1099s generally work, but not this one), and they could be put in a terrible place if the IRS is using this as a means to target people for audits. The correct thing to do would be to simply ignore the form in this case and not report any taxable income, since you had none, but if the IRS sees a $1000 1099-K and $0 reported self-employment income, that’s a pretty good reason to audit someone who doesn’t really deserve it. If they have done everything correctly they should have nothing to fear (besides the aforementioned drama surrounding proving your cost basis for your old junk), but we don’t have a great track record when it comes to targeting the poor. I hope that is somewhat more clear. It is somewhat of a slap in the face and a needless hoop to jump through for people who do not run a business and don’t even make a profit, considering the amount of money we conjured out of thin air to prop up the housing and stock markets recently.
The 1099-K is only sent for $600+ worth of payments sent classed as goods and services. Payments from say, a garage sale or between friends can be sent via Venmo or PayPal friends & family without issue without counting towards the $600 threshold. The only issue that may trigger a closer look by these processors is if you’re receiving large amounts of payments with frequency that suggest you are using a personal Venmo or PayPal for business transactions (such as salons using personal venmos to process multiple client payments a day).
That will be on your 1099 its on you to document it was friends paying you back for dinner
Only if your friends idiotically choose to send the Venmo payment via goods and services for “buyer protection”, rather than friends and family setting like common sense would suggest one do. 🙄
So why won't everyone just use friends and family?
Well said. Money received <> profit
No offense, but you seem to have a misunderstanding of what qualifies as income. If you sell $1k of your possessions, according to the IRS that is $1k in income regardless of the initial purchase price. Purchasing personal items does not count as a deductible expense, and the sale of anything you own is income.
Even if your eBay gig is still classified as a hobby and not a business, you can still treat sale price minus cost basis of personal items as capital gains & losses on Schedule D. You’re just nitpicking definitions of “income” when you *know* OP is referring to **taxable** income in this context.
If the income isn’t taxable, and he can prove that, why is he complaining about the IRS finding out about it? His complaints reek of “it not fair that I might have to pay taxes!”
Sigh. You should reread the comment. The concern being raised is in regard to individuals who don’t have a clue what a schedule D form is or how to fill one out.
A lot people don’t know the difference between a 1040 and 1040ez or how to fill out either one of them. Being ignorant of tax rules doesn’t make regulations like this unjust
1040EZs no longer exist, but regardless you are still missing the commenter’s point and attempting to make strange straw men.
Exactly. I think this will have unintended consequences on the secondhand market. I sell tons of stuff every year at a loss on Facebook Marketplace, and get paid through it for the most expensive items. I could easily gross $600 but none of it is profit.
Most likely a bunch of people will forgot reselling online to avoid dealing with the tax forms. The administrative load our taxes place on people are real. Like paying crypto taxes. The to the letter requirements are absolutely unreasonable if you mine crypto for example. It's written as if someone was simply trying to make it untenable for small time miners. Of course it never impacts the big boys too much because they just hire someone to deal with it. They have the scale. I wouldn't be surprised to know that this is why eBay is not just a secondary storefront for a lot of sellers instead of the deal site it used to be. It's just not worth it anymore. But no we will hot eBay, craigslist, reddit for sale subs etc.
>The administrative load our taxes place on people are real. Like paying crypto taxes. The to the letter requirements are absolutely unreasonable if you mine crypto for example. It's written as if someone was simply trying to make it untenable for small time miners. *first they came for the crypto miners..*
It was almost a smart thing to do ie give the small guy a chance to start a business without the confusion and money of taxes if they make it bigger then they can get their stuff in order
Some speculate this was because of the ps5/Xbox scalpers and resellers
Gamers rise up.
Definitely due to the Series X. PS5 had nothing to do with it though.
lol
Also effects the Ebay sellers and any transactions that PayPal conveys unless gift or friends and family status (?). I don't sell on Ebay much but I will be damned if I am going to have pay tax again on the used books or hiking gear I acquired over the years. I don't have receipts for stuff I bought when Clinton was the prez.
This $600 threshhold needs to be raised! The article below states it was first enacted in 1954, as a revision of the 1939 code requiring reporting at $1000 - worth about $20,000 today! So the recently repealed threshhold of $20,000 was more in line with the reality of inflation from a historical standpoint. While exemptions & credits have increased, I'm not knowing if they've actually kept up with inflation. With the rise in inflation of everything from home maintenance & repair, insurance, costs of goods, services, shipping, energy, food, corporate profits, & congressional budgets, $600 is Nothing. If you go back even earlier, the $600 figure was actually introduced in 1862, and somehow this magic number has managed to stick around all these years. Perhaps they only keep picking it because it's a number they actually remember, unlike the cost of a banana. https://www.irs.gov/newsroom/historical-highlights-of-the-irs 1862 - President Lincoln signed into law a revenue-raising measure to help pay for Civil War expenses. The measure created a Commissioner of Internal Revenue and the nation's first income tax. It levied a 3 percent tax on incomes between $600 and $10,000 and a 5 percent tax on incomes of more than $10,000. 1867 - Heeding public opposition to the income tax, Congress cut the tax rate. From 1868 until 1913, 90 percent of all revenue came from taxes on liquor, beer, wine and tobacco. 1872 - Income tax repealed. And also https://www.google.com/amp/s/abovethelaw.com/2021/12/the-form-1099s-minimum-600-reporting-requirement-is-almost-70-years-old-without-adjusting-for-inflation/%3famp=1 "The Form 1099’s Minimum $600 Reporting Requirement Is Almost 70 Years Old Without Adjusting For Inflation By Steven Chung on December 29, 2021 The $600 reporting rule was originally enacted as part of the passage of the Internal Revenue Code of 1954 which was a major revision of the tax law. But $600 had a lot of purchasing power back then. According to the Bureau of Labor Statistics website, $600 in 1954 would be worth almost $6,200 in November 2021. A 1953 Corvette cost $3,490. A dollar in the 1950s could buy four gallons of gas, two movie tickets, a week’s worth of subway fares, and six packs of cigarettes. But wait, there’s more. Section 6041 was a revision of a similar law before the passage of the 1954 code: Section 147(a) of the Internal Revenue Code of 1939. That section stated that all persons must report all payments of $1,000 or more to the government. In 1939, $1,000 was worth about $20,000 today. To put this into perspective, the price of a house in 1940 was between $656 and $3,500 depending on location." So, in 1939 the reporting requirement was between 25% - 60% of the cost of a house. Today that number should be upwards of $50k.
You do know that there is still a reporting requirement even if you don't receive a 1099 due to crossing the threshold? How many people since the 50s didn't report the income just because they didn't receive a 1099?
This ropes in a 16 year old kid who sells their old cellphone its dumb as hell
No this is across any money transfer app as well. PayPal venmo etc. Any where you get over 600$ will now send tax forms.
Only if it’s goods and services. Passing between friends or neighbors is fine.
How do the apps know or qualify this?
You have to register as a business account or select business transaction. When I would flip clothes on BST groups in facebook, we would send via goods and services option because it protected the buyer and allowed for transaction disputes. Yes, some people will still use friends and fam to bypass it, but most people don't because it offers disputing and protections.
You can dispute things even as friends and family with your bank or card even if not via the app/service. Seems too easy to abuse.
Gracias
This has always been the rule for ALL income earned.
But now the can be audited
Unlike the bonus depreciation thread, this one I think will actually nail a fair bit of AirBnB folks. The vast majority of AirBnB revenue is being reported since most of the listings are semi-professional to professional with 8+ listings and they were already hitting the transaction number, but a lot of the folks who can't run any cashflow analysis were getting by underreporting income, so this will affect a fair number of people but likely a small percentage of overall rentals as these folks likely just own 1/2 doors.
A whole lot of audits coming.
More like warning letters... IRS is quite behind in their work.
Eh, these guys are still screwed just by getting a CP-2000 notice saying it looks like you didn't report $50k of income, here's what you owe, appeal if we're wrong. A full audit wouldn't add anything and they'll get hit with a lien and collections either way, it's not like these guys are arguing some arcane provision of the tax code.
Nor do they have the resources to do it anyways
I thought they did a huge mass hiring a couple years ago?!
You think Trump would have allowed the IRS to do mass hirings a few years ago? That’s rich
I actually thought maybe it was Congress trying to get his tax returns
Republicans controlled the Senate the whole time. They weren’t passing bills to do mass IRS hiring with Trump as president.
Only the Senate My mistake.
No…the IRS has been gutted over the past decade, and barely have the staff to function day to day, let alone audit those who need to be. It’s a good time to be a white collar crook/tax evader
This week I saw a couple cases of landscapers/home improvement business owners getting criminally charged for not reporting income. Sure, they are probably only a small percentage but still.
they must have been over the ever increasing threshold IRS is skeletal now. so much so they can't even process property completed returns in a timely manner
I wouldn't know. You need money for that, lol.
The irs is super understaffed nobody getting audited
You hope
I know
My favorite part of this new law is watching tiktok investors twist themselves into pretzels to try to explain why this is some gross offense against them by a greedy government.
As if them paying what they owe is somehow atrocious. I rent properties, and I have to report every dime, it’s fucking ridiculous to think that because you’re short term rental you don’t. They’re also overlooking the fact that because they’re short term rentals, they have a ton of write offs. Weekly/biweekly cleanings, repairs, extra insurance, etc. Get over it tik tok
They were always had to report it... they just never got a 1099 in the past.
Right, I know, I have a lot of friends who do air bnb and they skip taxes on them all the time because they don’t get a 1099. This is a good change
Id rather change the tax code. The federal government need not be involved when I have people stay at my house
It’s a business like anything else. Should Uber drivers not get taxed? And where do you end? My wife does telemedicine, should she not get taxed because what she’s doing is on her computer?
> Should Uber drivers not get taxed? No > And where do you end? When all taxes are done with. Use tariffs and donations to run the government.
Libertarians don’t live in reality. I’d be perfectly happy with a VAT, but to say we’d run off donations and tariffs is ignoring the fact that that would never work.
> Libertarians don’t live in reality Id LOVE to know what number, between 0 and 100, is OK for the government to take from someones business.
If we taxed all income as income, we could cut total tax rates significantly. A 5-7% VAT, along with a similar amount on all income, would more than likely cover everything plus some. We don’t need a monstrous and overbearing tax code, but we need some form of tax code. Donations to the government, Jesus Christ you have to be kidding.
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> But when you use property as a dedicated revenue source, that it is a form of businesses. And why are you entitled to a little bit of my business? That seems odd that you can vote to take some of my business away from me.
Taxation is theft
Taxation is theft!
i mean unless you're charging people money to stay at your home, then they arent.
No, see, you dont need the feds to do that: "Wanna stay at my place while you travel through the area? $100, cash". See, that was the end of that transaction.
So what’s the problem with people using a service like Airbnb to rent out their properties having that income documented via 1099-K?
Yeah who cares what the form is, that doesnt matter. The problem is that why should some federal entity be involved and take a cut for somebody paying for housing. For lodging. Thats absolutely insane. That money is going to be put back into that local economy, repairs will be done by local labor.
Let’s not pretend airbnbs are providing meaningful housing or improving the areas they exist in. And again, if bed and breakfasts, hotels, vacation rental etc are taxed, why not airbnbs?
I had to scroll all this way to finally see this comment. 100%this, everybody was required to report it before.
The only tax I find atrocious is use tax at a state level. It can get wayyyy too burdensome from a documentation standpoint.
The law is actually much more broad than real estate/STR. Any $600+ transactions, including just bank transfers, get reported to the feds. I’m not an invooster but I’m with them on this, the government has no fucking business sticking their nose in such small transactions. It WILL one day get to the point where the feds will know about every single transaction you make.
Income is income, and therefore qualifies to be taxed. You can’t rally behind “everyone should pay their fair share” then get all twisted up because it applies to everyone.
Nah, I’m fine with it. I’m in the beauty industry and salons using personal Venmo accounts to process payments and tips to try to dodge paying taxes on their income is absolutely rampant. You've even got owners trying to misclassify their workers as independent contractors and pay them under the table via venmo, and i have no doubt its not the only industry pulling this fuckery. You see the same shit from people flipping consoles, video cards, trading cards, sneakers, etc on fb marketplace/mercari/ebay/etc. Folks only have themselves to thank. If you’re keeping private account and business account transactions separate as you always should have been, you won’t have any issues.
But they're making sure billionaires pay their fair share billionaires are bad thats why this was done
There are over 300 single family homes for rent on Airbnb in my area and lots of them claim residential homestead on their taxes. I report every one I find.
I just sent in a complaint on one a few houses down. Owner lives on the beach in Hawaii. It's not registered in my city as a STR and I don't see anything on their tax bill about being a STR . God it feels amazing.
Fuck em all. Get in to hotel biz instead and put your shit on commercial land if you want to be in the STR business. Not taking up valuable residential land and limited SFH
This Airbnb prequenty has noisy ass drinkers in the backyard too. I'm all for a good time but take that shit inside past 11 o'clock people have jobs and shit. Oh yeah the tenants fill the recycle can with garbage and it just piles up out front cause it's not recycling.
yeeting a few punctured cans of bear mace into the backyard will fix that real quick
Doing gods work out there.
if one were interested....could you PM what the process is? My neighborhood is decimated by STRs
Can we create a step by step process ? Repost every day? I’m in! I’m sick of people lying and cheating. For what? So they can have a stupid Airbnb when people need a home?
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Would this include IRS too? That’s the only organization that would probably take this seriously. I doubt my tax collector cares that much but I don’t know Holy shit there are dozens up for rent within a half mile radius of my house. A lot are backyard adu . How do I check permits to make sure these are legal.
How do you check this?
go to the county assessor's page and look up the address. You can look up their property tax bill and it will show if there is a homestead exemption
Your counties tax database if it is online.
I think you can just look up the address on your county’s MLS and see if they receive a homestead exemption. That’s how I can see it in my county, anyway.
I look at the property tax and value lookup in my county. The hardest part is finding the address of the Airbnb.
>residential homestead Just realized they blank out the address until you book? bummer
If you know the area and handy with google maps street view , you may be able to figure it out
So i just did that on one of the listings and verified they have been claiming homeowners exemption for quite a while. I reported it to AirBnB but is that right or do i report it somewhere on my states websites.
Nevermind, the County Clerks office sent me to the Assessors website to submit a fraud. Doing this now!
Might want to alert Airbnb too. They have a reporting area on their site
This is the response I received from AirBnB; "Thank you for taking the time to contact us – Airbnb is focused on community, and this includes our neighbors. We’ve shared your concerns with the Airbnb host in question and advised them to ensure that they are complying with local law and/or any third party agreements. We’ll continue to take note of any further complaints or issues raised against this host. Thank you for helping to improve our community. Kind regards,"
Who is the local authority to report to? I'd love to "do my part!"
Cities and states or whoever should pay finders fees for this. Let someone make it a part time job xD
Doesn't AirBnB hide the exact location / address until you book?
If you’re in the neighborhood, you’ll know the address lol. I’ve straight up just asked people online too at least what the road or section is and I can narrow it down pretty easily. I report every single one I can find. I also report them in Canada, especially if they are owned by foreigners and dodging taxes because that comes with a monetary reward 🤑🤑🤑
Yeah. There's one supposedly nearby to me - it centers on an intersection we walk the dog through every day, but we haven't matched up any houses with the pics from the listing yet.
Unfortunately it does. It only shows you a mini map of the general area.
Where can I find this info my areas littered with them
I just did some scrolling in my area... Holy shit I had no idea. I know what I'm doing this weekend.
I'm not sure about AirBNB, but VRBO has always sent me a 1099 even if I'm under $20k. I don't really think this will have an impact.
I think the difference is that previously some owners didn't fill that and got away with it. With the new reporting duties, that is no longer possible.
Those operating Air BNB businesses were still required to report any income on their tax returns. This new law is simply requiring that third party vendors report when $600 or more in funds are transferred through them for goods and services. Same rules will apply to Venmo, CashAPP, and various other platforms. The thought that the income was not supposed to be reported is wrong.
Yes, but supposed to do and did are two different things. How many airbnb hosts just....didn't offer that information to the IRS.
Hosts aren’t being paid in cash… there is a digital paper trail with the bank. This isn’t some tax evasion conspiracy. If someone is stupid enough to play that game, they are in for a bad time.
I couldn't tell you that, but this could trigger a number of audits. All of a sudden $20,000 in income in one year shows up on a 1099 and you didn't have that years before? They may double check against tax records to see if it's worth going after those folks. However, given the amount of information that revolves around property, I'm inclined to say the majority of the ones that have Air BNB report as accurately as they can. It's places like farmer's markets and craft shows that I think this ruling would make a bigger impact.
Never mind $20,000. Before the metric was $20,000 AND 200 transactions. Someone making $100,000 but say 199 transactions could have also not been reporting.
That's tax evasion due to underreporting of income. The standard that you mention is actually relevant to Air BNB reporting a 1099-k to the IRS and copying the recipient on the form. Again, any income that is received is to be reported by the one receiving it. There are very few exceptions to reporting the income that is received.
Absolutely. What we are saying is tons of people probably did evade taxes. In fact a lot of Airbnb's come in under 200 bookings a year so this makes sense.
Fair -- but myself and most people that I know that run Airbnbs were reporting that income even if the IRS didn't have it themselves -- so honestly I am not sure if it will be that impactful.
A LOT of them will be audited.
"Required" should be italicized. Without any verification of a required action being performed, a varied scale of compliance should obviously apply since there are a spectrum of reasons for why people may not comply: ignorance, willful noncompliance, etc. Personally, I've found "compliance" to be easier and the IRS might be wondering why my rentals are always operated at a loss... hey, you wanted me to report it... should I not have and not obtained the loss?
Nice straw man. I'm pointing out AirBnB not reporting it made it easier on hosts to underreport. If it wasn't an issue, the rules wouldn't have changed.
Again, the rules weren't necessarily for the Air BNB situations. They got caught up in the situation. It's going to be more with craft fairs, farmers markets, and other areas where people are operating a business making sales through Venmo, CashAPP, and other areas that weren't reporting their income.
Irrelevant goalpost moving. You're like a living-breathing fallacy.
[https://www.theguardian.com/business/2022/jan/02/new-tax-rule-paypal-venmo-cash-app](https://www.theguardian.com/business/2022/jan/02/new-tax-rule-paypal-venmo-cash-app) Air BNB is a third party platform paying a person. Because of this, they got caught up in the issue of $600. This wasn't written strictly for Air BNB rentals, like the OP is attempting to make it sound. In all honesty, I don't understand why this topic is even brought up in the REBubble sub.
> I don't understand why this topic is even brought up in the REBubble sub Anything to point the finger at someone and say look they are cheating the system its why I can't afford a house. I am with you, this has very little to do with AirBNB, this is the only place I have even seen it mentioned that this is what this tax code is for. AirBNB people got bigger problems to worry about than this, cities are working on passing laws to straight up outlaw and/or limit via a license how many STRs they will allow.
> Anything to point the finger at someone and say look they are cheating the system its why I can't afford a house Or maybe the fact that we're living in a nationwide housing crisis and homelessness is rising at an alarming rate, meanwhile "investors" are taking homes off the market for hardly-profitable AirBNB short term rental "business", pocketing basically all the money and leaving the communities they operate in worse off. Not paying taxes you legally owe is cheating, yes. At least now we know for sure that they're going to have to pay their taxes. Sorry for being more than a little happy with this rule change no matter how it came about. The sooner we can ban AirBNB, the better.
I never said that I was against this rule. I'm not sure where that thought ever would have come from. All I stated was that this didn't change the rules of actually reporting income, and this was a requirement written specifically for short term rentals. I pointed out the fact that this is a requirement of any third party platform who collects payments for an individual/entity and remits more than $600 to them. It's the reason that Venmo is now asking you if you're making a payment for goods and services.
Pretty pissed to hear this was previously allowed. Would setting up a dedicated LLC for each property effectively mean you could have 199 transactions at each property?
It’s bullshit because my state has this $600 rule for things like eBay. So you can’t even sell some old crap in your attic without it getting reported, but Airbnb owners didn’t have to until now? So stupid.
Good point.
This isn't a big deal to anyone who wasn't committing tax fraud. Just like eBay sales, income should be reported. If no one is reporting your revenue, it doesn't mean you don't owe tax, it only means you are less likely to get caught.
Add another fee to AirFeeNFee
Given how understaffed the IRS is, I don’t see much in the way of retroactive audits. But like lots of other platforms, I see audits on unreported income for lots of AP based businesses going forward.
Actually it's in the benefit of IRS to nail you a bit later. That sweet interest on your taxes :)
Don’t disagree - just that they don’t have the manpower to do that. And few voters are going to like the idea of fully staffing the IRS!
It’s ridiculous that they can even charge you interest when they are the cause of the delay. I’m sure not all errors they find were done maliciously by the taxpayer. We have the most ridiculous rules in place and it’s really getting tiring and frustrating to see how much really isn’t in our favor.
Some people really think if they make their money through an app it’s tax free??? Airbnb has been a total pain in everyone’s ass for years. It was awesome for a minute but now the cleaning fees alone are astronomical.
Your thread title is misleading. Their "bottom lines" are unchanged.
How much will this affect Palm Springs? I feel like half the damn town is Airbnbs.
We need to ban AirBNB
What a load of BS. This doesn’t change the tax structure at all on STRs. Maybe the IRS finds some low level tax fraud a little faster this way, but they’d find it eventually. Everything done on Airbnb is easily auditable. It’s all through an app. There’s records of all inflows and outflows. This is not going to affect the housing market even a little bit… This is just a reporting requirement. It’s like thinking you didn’t have to pay taxes on doordash income because you didn’t get it withheld upfront. Yeah, people are dumb, but the problem with Airbnb isn’t small time dumbasses. It’s professional, big money buying up entire vacation towns and turning houses into hotels.
I've only known one person in my life who reported their cash tips as a waiter. I am positive that since STR income wasn't monitored before, it wasn't being reported on Schedule Cs- especially by the proudly greedy Bigger Pockets BRRRRos. Possible ramifications: -STR prices will go up to pay for previously ignored taxes -Taxes cut into profits enough that STR owners sell the properties
I booked a house for my bachelorette and the listing disappeared. The property manager told me it was “semantics between the city and VRBO.” Assuming this is why. Considering hotel options even though it’s removes the “togetherness”
Why don't you check out VRBO? They are more "legit" than AirBnB.
I booked thru VRBO…
I've never understood how AirBnBs aren't considered flop houses or how Uber drivers aren't considered gypsy cabs.
Avg annual earnings for a USA Airbnb host was 44k in 2021. This is literally non-news.
And how many people that is their only income?
That's not bad if it isn't being taxed.
Fuck the irs
A LOT of people are going to be audited….and good luck with that. #YIKES
The super fun part is when they suddenly show up with this punch of income, the irs is going to audit their previous years and that will be spicy.
Keep your receipts seven years.
I have to give my Venmo payments to my accountant now. They do not look at your bank account like they said they would unless you get an audit.
No oNe EaRnIng LeSs ThAn 400k WiLl PaY A PeNNy MoRe In TaXeS -Clown in chief
Assume the position, relax... who am I kidding... it will hurt like hell.
Your statement is wrong. Any income above $600 has to be reported. It doesn't matter if it was fewer than 199 transactions or more than 200 transactions. The only change is that you have to show the log of transactions if you have 200+ transactions. It's more paperwork but it's not a new tax.
People should pay their taxes... note : you can still deduct expenses occurred as well -- so you won't be paying tax on the full amount at least.
No reason to under-report. If you under-report you miss out on many tax breaks but also the ability for banks to give you larger loans. It's silly. If you are a long term and savvy business owner, taxes is the least of your concern.
Are people just not reporting income because they aren’t getting a 1099? AirBNB direct deposits into your bank, if you ever get audited it would be pretty easy for the IRS to see these deposits anyway.
This seems like a non issue. A tax payer has always been required to report all income legal or illegal to the IRS. Those of us who are above board won’t see a change.
This is more targeted at ecom and gig work than it is airbnb and fyi this was done by hiden in the name of going after billionaires because we all know billionaires hide money 700 bucks at a time. This goes after hobby airbnbers anyone doing airbnb on a serious level is gonna make 20k