If you use cash for your business and make more than $600, the IRS will need to know. Starting on January 1, 2022, new taxes will apply to cash apps like PayPal, Venmo, and Zelle.
The IRS wants to know who is using these apps and how much money they are sending. The previous threshold was $20,000. But starting next year, the IRS wants to know about everything over $600.
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The president is going to change who they look at for the country. This is part of his plan. Chris Hobart, from Hobart Wealth Management, says this is a move to get more money from people. Uncle Sam wants his share of the money you make. The IRS wants to know if your transactions are business or personal. It is often hard for people in households to tell what is business and what is personal. To make things simple, you can pay each other instead. These apps are easy ways to shift money around quickly.
Hobart said that the tax will not apply to goods sold or services provided. The app will tell the IRS about your business transactions and give you a 1099K form.
Experts say that it is less likely that you will be audited if you only use the app for one thing instead of using it for both personal and business things.
If you have any questions about the IRS, go to their website. The website will tell you about their timeline, expectations, and rules.