NEWS ALERT! Sen. Rick Scott Warns Floridians About IRS Overreach

NEWS ALERT!

Sen. Rick Scott Warns Floridians About IRS Overreach, New $600 Transaction Reporting Requirement

Senate Democrats Block Sen. Rick Scott’s Amendment to Stop IRS Spying, Expansion

Senator Rick Scott secured a full vote of the United States Senate on his amendment to the week-long continuing resolution to stop the IRS from adding 87,000 new agents to audit families and small businesses. Senator Scott’s amendment would also repeal a provision that allows the IRS to spy on every financial transaction of more than $600 made with Americans’ bank accounts through vendors like CashApp, Venmo and PayPal. Although a bipartisan group, including all Senate Republicans, supported the amendment, Senate Democrats ultimately blocked its approval.

Watch Senator Scott’s speech in support of his amendment HERE or below.

Sen. Rick Scott on Senate Floor: Americans Have Had Enough of Washington’s Dysfunctional Spending

Senator Rick Scott spoke on the Senate floor in support of Senator Ron Johnson’s request to unanimously pass a clean continuing resolution (CR) that would keep the government funded through February 4th, 2023, after Republicans have taken the majority in the House of Representatives. This is the latest action taken over the past several months to support the passage of a CR until after the start of the 118th Congress.

Senators Rick Scott and Mike Lee wrote an op-ed for Fox News demanding the passage of a clean CR that extends government funding until after the new Congress begins in 2023. Last month, Senator Scott joined Senators Lee, Ted Cruz and Mike Braun in writing a letter to leadership expressing the need to pass a short-term CR that funds the federal government only until shortly after the 118th Congress is sworn in. Additionally, in September, Senator Scott, along with Senators Cruz and Lee, demanded the passage of a clean CR that simply maintains current federal functions and programs until a new Congress begins in 2023.

Watch Senator Scott’s speech HERE or below.

Sen. Rick Scott Pens Open Letter to Job Seekers: Don’t Work for Biden’s IRS Army

Senator Rick Scott released the below open letter to America’s job seekers outlining several factors they should consider before applying for a job with Biden’s soon-to-be supersized Internal Revenue Service (IRS). This month, Congressional Democrats passed a massive, partisan and reckless tax-and-spend bill which gives the IRS an additional $80 billion in taxpayer dollars and the authority to hire 87,000 new – mostly armed – IRS agents. Senator Scott first released this open letter to job seekers on his new LinkedIn account.

Read the full letter HERE.

How Will This Impact You?

Previously, the IRS required companies like Cash App, Venmo, PayPal to issue Form 1099-K to individuals to report certain payment transactions that had:

Payments that exceeded $20,000, AND
More than 200 transactions within the current year
To comply with a new law passed by Democrats in Congress and signed by President Biden, Floridians must now receive the Form1099-K for payments of all goods and services in excess of $600.

In short, this new law 1) brings down the transaction payment threshold from $20,000 to $600 and 2) removes the minimum threshold of 200 transaction per year.

Questions and Answers

How will this work?

You will receive a Form 1099-K from a Venmo or PayPal (third party network) for income received through electronic forms of payments by Jan. 31 of the following year.

In the near future, your third-party provider may request additional information from you to properly report your transactions on the Form 1099-K. You may be asked to provide your Employer Identification Number (EIN), Individual Tax Identification Number (ITIN) or Social Security Number (SSN) if this information is not on file.

Your Form 1099-K will report the total gross income in Box 1a received during the year without considering any adjustments, discounts, or refunds.

Your Form 1099-K will include payments from credit cards and online payments. You are required to report any income listed on your Form 1099-K from your business on your income tax return.

Does Venmo, Cash-App and Other Third-Party Network Users Have to Pay a New Tax?

No.

While this new law requires new tax reporting requirements, it does not change the existing tax law, meaning taxable or nontaxable for tax reporting.

Form 1099-K is an informational tax form and may include amounts considered excluded from gross income for tax purposes.

If you receive money considered a nontaxable source, you will not need to report on your tax return.

Some examples of money received that may be excluded from your income are:

Money received from a friend as a reimbursement
Money received from a roommate to pay their share of the rent
Money received from a loved one as a gift
Also, if you receive money from selling a personal item at a loss, you are not required to report the amount on your tax return. For example, if you purchased a dress for $100 and sold it for $50, the amount is not taxable.

But while it does not create a new tax, you must keep good records of any taxable income received.

How to Keep Good Records for Cash App Reporting

Since your Form 1099-K may include both taxable and nontaxable income, keeping good records is essential.

While you may choose any recordkeeping system for your business, you want to select a system that reflects your income and expenses. Your system should include:

Accounting and payroll records.
Bank statements.
Receipts.
Tax forms and returns.
Other business financial records.
You can consider saving your records either in electronic form or manually.

If you are a business owner, it is a good idea to set up separate third-party payment accounts for your business and personal transactions. This way, you can easily track business transactions.

Also, setting up a separate business platform and keeping good records can be beneficial to prove both taxable and nontaxable income sources if the IRS audits your tax return.