The IRS now requires payment apps to record transactions worth more than $600.
APPLICATIONS LIKE VENMO AND PAYPAL ARE REQUIRED BY A NEW LAW — Payment applications like Venmo, Paypal, Cash App, and Zelle are now required by law to record transactions worth more than $600.
The IRS will issue a 1099-K form, which must be included with a person’s tax filings. Prior to 2022, a firm with at least 200 transactions or $20,000 in gross payments received a 1099-K form from the IRS.
When Congress approved the American Rescue Plan, this new tax reporting obligation was enacted. The change in tax reporting will only affect payments for goods and services traded, not payments made to family and friends.
Financial experts advise utilizing one app for work and another for personal use to keep things distinct and manageable. The IRS has built a webpage to assist consumers in understanding the filing requirement.
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