The IRS Spares the Side ‐​Hustlers (For Now)

Scott Lincicome and Ilana BlumsackAs our colleague Nick Anthonywrites, the IRS in late ‐​Decemberpostponed a  new rule requiring Americans to report to the IRS gross annual online sales (including taxes, fees, canceled orders, or even the nontaxable resale of goods at a loss) of as little as $600 – considerably lower than the current reporting threshold of $20,000 in payments and 200 transactions. As Nick notes, the new requirement (reported primarily on IRS Forms 1099‑K and now punted to next year) constitutes a major invasion of Americans’ financial privacy.As weexplain in a  chapter of the new Cato book,Empowering the New American Worker, the rule will also impose significant costs on a  growing segment of the American workforce – the millions of Americans who earn supplemental income via cash apps like Venmo or third party sales platforms like Craigslist, E‑bay, Etsy, or Uber. As the chapter details, these types of independent “side‐​hustles” are increasingly common. In fact, newdata from MBO Partners finds that there were over 64 million independent workers last year, a  26 percent increase from the then‐​record 51.1 million figure in 2021. MBO furtherreports that about half of those individuals (i.e., nearly 32 million Americans), were occasional or part ‐​time independent workers – a number that’s more than doubled since 2020.(Also noteworthy from the new MBO Survey: 4.4 million independent workers earned more than $100,000 las...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs