Venmo, Cash App And Other Payment Apps To Report Payments Of $600 Or More
If you receive $600 or more payments in total for goods and services through a third-party payment network, such as Venmo, Cash App, or Zelle, these payments will now be reported to the IRS.
The new rule results from the American Rescue Plan signed into law in March 2021 and will mainly impact business owners using third-party payment network providers. The IRS is cracking down on payments received through apps, such as Cash App, Zelle or Paypal to ensure those using the third-party payment networks are paying their fair share of taxes.
Previously, the IRS only required third-party payment networks to report payments that met both of the following reporting requirements:
- Gross payments that exceed $20,000, AND
- More than 200 transactions within the current year.
Beginning Jan. 1, 2022, third-party payment networks will be required to send users Form 1099-K for transactions made by mail or electronically. This means you don’t have to worry just yet: The new tax reporting requirement will impact your 2022 tax return filed in 2023.
MKG Tax Consultants
