/home/smartonegroup/mail/new/1738685090.M552040P10594.server12.hhost.eg,S=20038,W=20422
Envelope-to: habib@smartonegroup.com
Delivery-date: Tue, 04 Feb 2025 16:04:50 +0000
Content-Type: multipart/alternative; boundary=760e9cd37c3acd201d907e7c5d347c5da2d68930154992a6f325daf00277
Date: Tue, 04 Feb 2025 16:04:06 +0000 (UTC)
From: George Dimov <george@dimovtax.com>
Mime-Version: 1.0
Message-ID: <gku7zrl4d4t5hld5wxdurh8gom999tm@convertkit-mail.com>
Subject: New taxable 1099s this year - how to prepare to limit exposure
Feedback-ID: 16501537:80251:broadcast:CK
Precedence: bulk
To: SmartOne Inc <habib@smartonegroup.com>

--760e9cd37c3acd201d907e7c5d347c5da2d68930154992a6f325daf00277
Content-Transfer-Encoding: quoted-printable
Content-Type: text/plain; charset=utf-8
Mime-Version: 1.0

Hi!

Based on a 2021 congressional decision, there is a new $5,000
threshold per year for those of us that conducted transactions
online - this can be from a wide range of activities, such as:

* Anyone receiving $5,000 or more using Venmo, PayPal, Zelle, or
Cash App will receive a 1099-K and be required to report that
income on their taxes
* Crypto exchanges - yes, even if you lost money trading, you
will be receiving a 1099-K this year if you cashed out of crypto
and that amount was over $5,000.
* Selling shoes, clothing, or other items on eBay, Etsy, Amazon,
etc.
* Receiving rent from a roommate or Airbnb
* Ecommerce of any kind, even if the business lost money
* Any type of credit card processing, such as Square, Stripe,
Shopify, Woocommerce, Squarespace, etc.

You will be receiving a 1099 regardless of how many individual
transactions occurred, even if you had only one transaction over
this $5,000 threshold. This is a huge change from last year,
where the minimum reporting threshold was $20,000 and more than
200 transactions.

Quick pause for some recent history:

How did we get to this? The federal government=E2=80=99s 2021 decision
followed the lead of states like Massachusetts and Vermont. In
2017, these two states began requiring small businesses to report
income at the threshold of $600. The lower reporting threshold
resulted in an increase in reporting by over double. This change
was intended to bring in stricter tax compliance.

What does this mean?

Individuals, crypto traders, freelancers, those receiving money
on phone apps like Venmo, gig workers, etc. who may have
previously flown under the radar will now need to report this
income. Side note: If you don=E2=80=99t receive a 1099-K form from the
payment processor, and you meet the threshold requirements, you
still need to report that income.

Potential pitfalls:

Here is a list of common mistakes with 1099s that we see each
year in years prior which we believe will increase in frequency:

* Taxpayer receives 1099 from their crypto exchange, thinks
=E2=80=9Cwell, I lost money trading, so there is nothing to report=E2=80=9D=
 and
files without it.
* Same situation, except with eBay: =E2=80=9Cwell, I did not actually
make a profit selling these shoes, so I won=E2=80=99t report this=E2=80=9D
* I can list many other examples, but you get the picture - the
1099 gets left out

The above situations will lead to the IRS sending such taxpayers
what is called a =E2=80=9CCP2000=E2=80=9D or similar notice, which will exp=
lain
that the agency has information of missing income from the
return. The letter will then proceed to apply tax on the full
amount of the 1099, plus self-employment tax, plus interest, plus
underreporting penalties/negligence penalties. These are no fun
and take quite a bit of work to fix.

What is the solution?

In many cases, through proper planning and reporting, we can
entirely remove or significantly reduce tax obligation. How?

* For e-commerce, we list the cost basis of the product sold
* For services, we list business related deductions on the return
- if you need to get your expenses in order, this is called
bookkeeping and it needs to get done right away before peak tax
season as most accountants will be booked up by then
* For crypto trading, we include the cost basis in form 8949
* For rent, we include expenses & depreciation
* List goes on - we have a solution for most of these

Please note that such planning activities must be ironed out now
as we are already in peak tax season & availability may be
limited.

If you need help with bookkeeping, crypto transaction
reconciliation, Q&A, or planning, please reach out to us right
away by replying to this email by Friday with your exact request.
=E2=80=8B

--

George Dimov CPA

www.dimovtax.com

(833) 829-1120 toll free

Unsubscribe (
https://unsubscribe.convertkit-mail.com/gku7zrl4d4t5hld5wxdurh8gom999tm
) | 211 E 43rd St Suite 7-100, New York, NY 10017
--760e9cd37c3acd201d907e7c5d347c5da2d68930154992a6f325daf00277
Content-Transfer-Encoding: quoted-printable
Content-Type: text/html; charset=utf-8
Mime-Version: 1.0

<!DOCTYPE html>
<html>
<head>
<style>@media only screen { .email * { word-break: break-word; } }
@media screen and (max-width: 384px) { .mail-message-content { width: 414px=
 !important; } }
@media only screen and (max-width:600px) {
        .ck-mobile-font-size {
          font-size: 50px !important;
        }
     }</style>
<meta http-equiv=3D"Content-Type" content=3D"text/html; charset=3DUTF-8">
<style>a:hover{color:#1b8ede;border-bottom-color:#1b8ede}
.button:hover{color:#fff;background:#666}</style>
</head>
<body>
<div class=3D"message-content" style=3D"max-width:600px;margin:30px auto;fo=
nt-family:Arial, Helvetica, sans-serif;color:#333">
 <table cellpadding=3D"0" cellspacing=3D"0" style=3D"width:100%;margin:0 au=
to"><tbody><tr><td>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">Hi!</p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">Based on a 2021 congressional de=
cision, there is a <strong>new $5,000 threshold</strong> per year for those=
 of us that conducted transactions online - this can be from a wide range o=
f activities, such as:</p>
<ul class=3D"unordered_list" style=3D"margin-bottom:1.2em;font-size:16px;li=
ne-height:1.5em;font-family:Arial, Helvetica, sans-serif;list-style-positio=
n:inside">
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>Anyone receivin=
g $5,000 or more using <strong>Venmo, PayPal, Zelle, or Cash App </strong>w=
ill receive a 1099-K and be required to report that income on their taxes</=
span></li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span><strong>Crypto =
exchanges</strong> - yes, even if you <strong>lost money</strong> trading, =
you will be receiving a 1099-K this year if you cashed out of crypto and th=
at amount was over $5,000. </span></li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span><strong>Selling=
</strong> shoes, clothing, or other items on eBay, Etsy, Amazon, etc. </spa=
n></li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>Receiving <stro=
ng>rent </strong>from a roommate or<strong> Airbnb</strong></span></li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span><strong>Ecommer=
ce</strong> of any kind, even if the business <em>lost</em> money </span></=
li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>Any type of <st=
rong>credit card processing</strong>, such as Square, Stripe, Shopify, Wooc=
ommerce, Squarespace, etc. </span></li>
</ul>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">You will be receiving a 1099 reg=
ardless of how many individual transactions occurred, even if you had<stron=
g> only one transaction</strong> over this $5,000 threshold. This is a huge=
 change from last year, where the minimum reporting threshold was $20,000 a=
nd more than 200 transactions.</p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif"><u>Quick pause for some recent h=
istory:</u></p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">How did we get to this? The fede=
ral government=E2=80=99s 2021 decision followed the lead of states like Mas=
sachusetts and Vermont. In 2017, these two states began requiring small bus=
inesses to report income at the threshold of $600. The lower reporting thre=
shold resulted in an <strong>increase in reporting by over double</strong>.=
 This change was intended to bring in stricter tax compliance. </p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif"><u>What does this mean?</u></p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">Individuals, crypto traders, fre=
elancers, those receiving money on phone apps like Venmo, gig workers, etc.=
 who may have previously flown under the radar will now need to report this=
 income. Side note: If you don=E2=80=99t receive a 1099-K form from the pay=
ment processor, and you meet the threshold requirements, you still need to =
report that income. </p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif"><u>Potential pitfalls:</u></p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">Here is a list of common mistake=
s with 1099s that we see each year in years prior which we believe will inc=
rease in frequency:</p>
<ul class=3D"unordered_list" style=3D"margin-bottom:1.2em;font-size:16px;li=
ne-height:1.5em;font-family:Arial, Helvetica, sans-serif;list-style-positio=
n:inside">
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>Taxpayer receiv=
es 1099 from their crypto exchange, thinks =E2=80=9Cwell, I lost money trad=
ing, so there is nothing to report=E2=80=9D and files without it. </span></=
li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>Same situation,=
 except with eBay: =E2=80=9Cwell, I did not actually make a profit selling =
these shoes, so I won=E2=80=99t report this=E2=80=9D</span></li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>I can list many=
 other examples, but you get the picture - the 1099 gets left out </span></=
li>
</ul>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">The above situations will lead t=
o the IRS sending such taxpayers what is called a =E2=80=9CCP2000=E2=80=9D =
or similar notice, which will explain that the agency has information of mi=
ssing income from the return. The letter will then proceed to <strong>apply=
 tax on the full amount of the 1099</strong>, plus self-employment tax, plu=
s interest, plus underreporting penalties/negligence penalties. These are n=
o fun and take quite a bit of work to fix.</p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif"><u>What is the solution?</u></p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">In many cases, through proper pl=
anning and reporting, we can <strong>entirely remove or significantly reduc=
e</strong> tax obligation. How? </p>
<ul class=3D"unordered_list" style=3D"margin-bottom:1.2em;font-size:16px;li=
ne-height:1.5em;font-family:Arial, Helvetica, sans-serif;list-style-positio=
n:inside">
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>For<strong> e-c=
ommerce</strong>, we list the cost basis of the product sold</span></li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>For <strong>ser=
vices</strong>, we list business related deductions on the return - if you =
need to get your expenses in order, this is called <strong>bookkeeping</str=
ong> and it needs to get done right away before peak tax season as most acc=
ountants will be booked up by then</span></li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>For <strong>cry=
pto</strong> <strong>trading</strong>, we include the cost basis in form 89=
49 </span></li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>For <strong>ren=
t</strong>, we include expenses &amp; depreciation </span></li>
<li class=3D"list_item" style=3D"margin-bottom:1.2em"><span>List goes on - =
we have a solution for most of these</span></li>
</ul>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">Please note that such planning a=
ctivities must be ironed out <strong>now</strong> as we are already in <str=
ong>peak tax season </strong>&amp; availability may be limited. </p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">If you need help with bookkeepin=
g, crypto transaction reconciliation, Q&amp;A, or planning, please reach ou=
t to us right away by <strong>replying to this email by Friday</strong> wit=
h your exact request. <br>=E2=80=8B</p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">-- </p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">George Dimov CPA</p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">www.dimovtax.com</p>
<p class=3D"" style=3D"margin-bottom:1.2em;font-size:16px;line-height:1.5em=
;font-family:Arial, Helvetica, sans-serif">(833) 829-1120 toll free</p>
</td></tr></tbody></table>
  <div class=3D"footer" style=3D"border-top:1px dotted #888;padding:20px 0p=
x;font-family:Arial, Helvetica, sans-serif;color:#ddd;font-size:11px;paddin=
g-bottom:10px">
  	<a href=3D"https://unsubscribe.convertkit-mail.com/gku7zrl4d4t5hld5wxdur=
h8gom999tm" style=3D"text-decoration:none;border-bottom:1px dotted #0875c1;=
color:#0875c1">Unsubscribe</a> | 211 E 43rd St Suite 7-100, New York, NY 10=
017
  </div>
</div>
<!-- -->
<img src=3D"https://open.convertkit-mail.com/gku7zrl4d4t5hld5wxdurh8gom999t=
m" alt=3D"">
</body>
</html>

--760e9cd37c3acd201d907e7c5d347c5da2d68930154992a6f325daf00277--