If you aren't doing anything untoward (like getting paid wages under the table, using a digital payment system and not reporting it[1]), this doesn't change how you file taxes. It's simply a data-point that the IRS will cross-reference, to see if you are being honest with your filing.
[1] If you're doing that, you should, like, stop. I'm not a lawyer and this is not tax advice, but you should probably stop.
If you decide to clean out the junk from your closets, you now have to report that income along with documentation showing you sold it at a loss. Not very fun.
A lot of people freelance, landlord or do other activities that are classified as "businesses." So it, actually does personally affect a lot of folks who aren't even full blown businesses.
Please explain what a “business tax” is in the US. Personal taxes are definitely affected if you happen to do business as a sole proprietor. They’re even affected if you happen to have an LLC with passthrough taxation.
If you form an llc, and if you pay passthrough taxes instead then you are perfectly well aware that you are a business and that passthrough taxes are saving you paperwork. If not, your CPA can explain this to you.
This only makes your tax situation _more_ complex if you're intentionally engaging in tax evasion. If that's your use case, then I guess you have a valid complaint!
It’s an additional form that has to be filed away, and then typed in once all the other tax forms arrive. I have no problem reporting business income. In fact, if the IRS just sent me a (contestable) bill I wouldn’t even complain about the extra paperwork.
It could if you're a hobbyist buying/selling over $600 worth of used goods. Lots of online communities advise buyers and sellers to use PayPal goods & services for its protection.
Now, folks are on the hook for self-reporting. Previously, the thresholds were $20,000 and 200 transactions, which were maybe too lenient. Had lawmakers just halved the threshold to $10,000, I don't think most people would care. The $600 is too low, e.g. guitars easily fetch a grand, and Leica M bodies are easily over that.
Also, what are Nancy Pelosi's stock gains compared to any folks that might have been not reporting their illicit <$20k income?
Want to know what’s even more fun? Since 2018 if you have income from a hobby you are not allowed to deduct any expenses from it, but do need to pay taxes on any income. So if you make a bit of money from photography, and buy and sell a bunch of camera gear, you you taxes on all the camera gear you sold even if it’s sold at a loss.
Wait this seems totally logical. Imagine if you could deduct the cost of your car because you used it to drive to a photography shoot once. Or deduct the cost of your personal laptop because you used it for photo editing.
This is basically the separation that sole proprietorships have to go through. Stuff that is exclusively used for your business is deductible, anything for personal use isn't.
> Stuff that is exclusively used for your business is deductible, anything for personal use isn't.
I think you're working from a different set of assumptions than GP. They were specifically contending that exclusive expenses could not be deducted, even if the overall net value of transactions is negative (because it's not a business, but just a partial recovery of hobby expenditures.)