“It’s another roadblock for people”
CEDAR RAPIDS, Iowa (KCRG) — Grayson Burgess started his business, Comic Sandwiches, in 2016 in Cedar Rapids, but sells on Etsy — a site that hosts sellers who will likely feel the impact of the new tax law.
“Even simple things like selling auto parts through eBay,” Burgess said.
Starting next year, anyone who receives more than $600 in payments for goods or services processed through third-party payment apps like Paypal or Venmo will be taxed. This is a big difference from the current threshold.
“It used to be the 1,099,000 individuals would get if they sold over $20,000 and made 200 trades,” Deena Struck said.
Struck owns the Cedar Rapids branch of Freedom Tax Services. She says that the tax requirement remains the same, it is the declaration that changes. The change is the result of finances during COVID.
“Because of the pandemic, more and more people went to earn money on the side. And so the government said we wanted their cut,” Struck said.
Not only will this change impact everyone who makes a significant profit from online sales, it will also impact businesses like Struck’s.
“This form is confusing if they don’t understand how to fill it out. There are a lot of ins and outs in which category to put this stuff. There are companies where certain things don’t fit into this category, so it’s like where do I put them? ” she says.
Burgess says he has become familiar with filing these types of taxes since starting his business six years ago. But he fears it will have a big impact on the industry.
“I think it will get in the way of entrepreneurship with people wanting to start businesses, it’s another loophole and another barrier for people,” Burgess said.
There are a few exceptions to this law. Struck says that doesn’t include ATM transactions or app payments to friends and family. These are only business transactions, credit cards or cash applications.
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