Venmo, PayPal and Cash App will now have to report transactions totaling over $ 600 to the IRS

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Venmo, PayPal and Cash App will now have to report transactions totaling over $ 600 to IRS as Biden plans to step up financial law enforcement

  • The new reporting requirement will ensure that small businesses that receive payments through these apps pay their fair share of taxes on them
  • As of January 1, 2022, third-party payment processors were required to report these transactions
  • Changes will be included during tax season 2022
  • Payment apps previously had to send users 1099-K forms if their gross income exceeded $ 20,000 or recorded more than 200 transactions per year.










President Biden’s IRS is cracking down on payments made through third-party apps, forcing platforms like Venmo, PayPal, and Cash App to report transactions if they exceed $ 600 in a year.

The new reporting requirement will ensure that small businesses that receive payments through these apps pay their fair share of taxes on them.

As of January 1, 2022, third-party payment processors were required to report these transactions. While businesses have traditionally been required to report this income to the IRS on their own, many have often ignored their small transactions.

Payment apps previously had to send users 1099-K forms if their gross income was over $ 20,000 or if they made more than 200 transactions per year.

The new tax law was part of the March 2021 US bailout, which was passed without a Republican vote.

President Biden’s IRS clamps down on payments made through third-party apps, forcing platforms like Venmo, PayPal, and Cash App to report transactions if they exceed $ 600 in a year

The new reporting requirement will ensure that small businesses that receive payments through these apps pay their fair share of taxes on them

The new reporting requirement will ensure that small businesses that receive payments through these apps pay their fair share of taxes on them

The new rule only affects transactions for goods and services, not personal transactions, such as paying a roommate for rent or paying off a friend. It also excludes anyone selling a personal item at a loss, such as a sofa bought for $ 700 and sold for $ 650.

Treasury applications will now need to send Form 1099-K to businesses with electronic transactions over $ 600. The new change will apply for the 2022 tax season.

“For the 2022 tax year, you need to factor in the amounts shown on your 1099-K when calculating gross receipts for your tax return,” PayPal warned on its website. “The IRS will be able to cross-reference our report and yours. “

The new tax rule is separate from a proposed IRS reporting requirement that would have originally handed over transaction data to accounts with more than $ 600 of aggregate inflows and outflows. This proposal, which was originally part of President Biden’s Build Back Better plan, has been raised to a threshold of $ 10,000 after much setback, and has yet to be implemented by Congress.

Republicans said the proposal fell to the Biden administration to scrutinize Americans’ daily purchases.

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