New IRS Rules for Cash App Transactions Begin Next Year

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As of January 1, 2022, commercial cash application transactions over $ 600 will need to be reported to the IRS.

GREENSBORO, NC – Treasury apps like Venmo, Zelle, and PayPal make it easier to pay for some expenses, but a new IRS rule will require some people to report treasury app transactions to federal authorities.

As of January 1, 2022, commercial cash application transactions over $ 600 will need to be reported to the IRS.

Prior to the new rule, business transactions were only reported if they exceeded $ 20,000.

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Taylor’s Pro Tax & Beyond’s CPA Kimberly Morrow in Greensboro said the change did not apply to personal expenses like paying for dinner or sending money to friends and family.

Morrow said the rule was aimed at cracking down on self-employed workers who earn income through apps.

“So basically people who are like hairdressers or you like entertainment, or you earn income with a cash app, basically if you make more than $ 600 you are going to start paying taxes on that money. “, she explained.

“Most of the time, the income you report from the cash application should already appear on your tax return when you claim your self-employment,” Morrow said.

Morrow said it can be tricky for freelancers who use treasury apps for personal and business transactions.

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She recommends working with a professional accountant to keep track of which transactions are taxable and which are not.

“Most people don’t want to keep track of receipts and on top of that, receipts fade over time,” Morrow said.

“Then when all these electronic transactions come in they don’t have a category and when you’re about to do your taxes you have to separate a lot of things when it comes to doing your taxes which can be a headache. . ,” she said.


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