What is a 1099-K? And who is Hasan?
That’s the question 20,000,000 taxpayers will ask in 2023 (the 1099 one, not the Hasan one).
The 1099-K
I think it’s pretty safe to say we have heard of Venmo, Paypal and other electronic means of transferring funds, and I think it’s fair to say most of us have tried them if only because our kids want their money that way.
If you are a business owner and you accept credit cards, your merchant card provider has provided you with a 1099-K in the past, so it’s not foreign to you. From the merchant card provider, It’s essentially a summary of all of your credit card payments that you received for your business.
And it’s also the summary that gets copied to the IRS - just to keep everyone honest.
Taking it one step further, if you have received one from Venmo, Paypal and other payment facilitators, it’s because you either did over $20,000 in incoming fund transfers, or over 200 transactions. That’s about to change.
$600 is now the limit for you to get a 1099-K from aforementioned cash payment services. Oh, joy.
It is estimated that will affect 20,000,000 taxpayers.
Getting reimbursed by a friend or family member that is $600 or more? 1099-K for you!
Having your roommate pay their share of the rent via Venmo? Yep, 1099-K.
How did this all happen? Congress. As I have said before, if progress is moving forward, what is congress? I digress again…
All of this is courtesy of the American Rescue Plan passed by congress in 2021 to help stimulate the covid economy. Yep, another $1.9 trillion pumped into the economy.
While everyone was happy to get the cash, your representative was pretty sneaky to put in this little tidbit.
I’m not saying the IRS considers 1099 income taxable, but they consider 1099 income taxable. You just have to make sure you can prove it wasn’t.
In an unrelated story, the IRS is hiring. Really.
In a completely related story, Zelle states they are NOT subject to the reporting. I expect more people will be using Zelle.
More Numbers: Consumer Spending, Mortgage Rates and Job Growth
Consumer spending growth in February is down to 0.2% from 2.7% in January. You didn’t spend as much in February as you did in January. Maybe higher prices had something to do with that – just a wild guess.
Mortgage rates are at the highest since 2018, but when you think about it, it really isn’t that bad. It’s just that while 4.67% is still a good rate it’s not as good has what we have been used to, like 3% the last two years. Well, it sure beats the 9.875% I locked in at in 1989.
The trick is to hope (and hope is not a plan BTW) that they don’t go much higher. That will start to push housing prices down if rates keep going up.
Job growth topped 431,000 last month, the 11th straight month of job growth over 400,000 which is the longest stretch of growth going back to 1939.
This really is good news, particularly for the restaurant and hospitality business.
Unemployment fell to 3.6% in March. Also good news.
Wages were boosted as well; it’s just that inflation eats up those gains.
I think that much of this is due to covid support ending, schools opening and daycare centers getting back in operation. This allows folks to get back to the office, assuming they actually go to the office.
Oh, and inflation is at 7.9%. Not so good news.
Who is Hasan?
When I was a kid I would yell “Hey mom, I’m going over to Robert’s house,” and that would be the last my mom would see me for the balance of the day, probably until Robert’s mom told me it was time to go home for dinner, or she made dinner for me.
Parents today seem nervous about even letting this happen. Imagine how Mrs. Pisetska felt…
Hasan Pisetska, an 11 year old Ukrainian boy, has a similar story, except he went from Ukraine to Slovakia over the course of 3 days and 1200 miles. The goal was to get to his brother in Bratislava, the capital of Slovakia (try that one at your next cocktail party). His starting point was his home town, Zaporizhzhia, in eastern Ukraine.
When the Russians got there, his mother got him on the next train out of town, so she dropped Hasan at the train station with a friend that was going to L’viv, about 600 miles west in Ukraine. Hasan stayed overnight with the acquaintance, who then found someone else to drive him to the train station in the morning to go to Uzhhorod in southwest Ukraine. The driver got him on the train, asking the conductor to keep an eye on the boy. In Uzhhorod, a man who had offered assistance through social media found Hasan and drove him to the border (yes, Hasan did have a cell phone and evidently the social media person wasn’t a stalker). Passing through the border, another volunteer agreed to drive him 6 hours to the capital with a successful rendezvous with his brother. Six hours. I whine about a 45 minute drive to a meeting, and this person drives this kid 6 hours to get him to his brother.
What a story. I like the fact that plain, old fashioned trust helped Hasan get to where he needed to be, and that people would do the right thing; it still happens, and more than we think. Whenever your business journey feels impossible, think about an 11 year old boy going 1200 miles on his own with nothing but a passport and cell phone. I think you’ll start feeling better about your situation. Just don’t leave your cell phone at home.
