If you have a PayPal or Venmo account, it’s important to know you’ll soon need to report certain amounts to the IRS for tax purposes.
Many Americans work for themselves, and the easiest way to accept payments from clients is by using some sort of electronic payment service like PayPal or Venmo.
Now, under the American Rescue Act, certain amounts and transactions must be reported to the IRS.
IRS: How to get your online tax transcript
What will 2022 look like for electronic cash apps and the IRS?
Apps impacted include
- Venmo
- PayPal
- CashApp
- Etsy
- Airbnb
What dates will tax refunds be sent out?
Amounts worth $600 or more will need to be reported to the IRS as taxable income.
This began on Jan. 1 and will require a 1099-K.
1099-K explained
The 1099-K form is used for business transactions that add up to over $600 in one calendar year.
IRS: $1,400 Recovery Rebate Credit in 2022
Before the change, the limits were 200 transactions and/or $20,000.
2021 transactions are not being reported, only 2022.
Personal transactions to family and friends for things like dinner or coffee are not going to be taxed.
Payment apps and required reporting a 1099-K
FingerLakes1.com is the region’s leading all-digital news publication. The company was founded in 1998 and has been keeping residents informed for more than two decades. Have a lead? Send it to [email protected].