Mobile payment apps like Venmo, Paypal, Zelle and Cash App are now required to report commercial transactions totaling more than $600 per year to the IRS.
The change to the tax code was passed into law as part of the American Rescue Plan Act covid response bill passed in March 2021.
Previously, these mobile payment apps only had to tell the tax authorities when a person had over 200 commercial transactions per year that exceeded $20,000 in total value,Starting Jan. 1, 2022, the IRS says, if a person accrues more than $600 annually in commercial payments on an app like Venmo, then Venmo “must file and furnish a Form 1099-K” for them — reporting on all the commercial income they collected through the app.
The tax-reporting change only applies to charges for commercial goods or services, not personal charges to friends and family, like splitting a dinner bill.on the new tax changes, the IRS says these changes also apply to people who sell items on internet auction sites like eBay and people who"have a holiday craft business" so long as they accept credit cards payments through these apps.
"Users should select Goods and Services whenever they are sending money to another user to purchase an item, like a couch from a local ad listing or concert tickets, or paying for a service."
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