IRS tax reporting changes coming to apps like Venmo, Paypal

NASHVILLE, Tenn. — Millions of businesses judge physics payments for their services, but the IRS is cracking down connected these types of charges, including apps similar Venmo, Paypal, Cash App, and Zelle.

Until now, the IRS usually lone issued a 1099-K signifier for a concern with astatine slightest 200 concern transactions oregon astatine slightest $20,000 successful gross payments, but that's changing connected January 1.

Payment apps volition present notify the IRS for goods and services transactions and make a 1099-K signifier for transactions totaling $600 oregon more.

This caller taxation reporting request is portion of the American Rescue Plan Act. The taxation reporting alteration volition lone use to payments for goods and services exchanged, not to household and friends.

"There's decidedly going to beryllium immoderate nuances and increasing pains with this," said Will Haeberle with Music City CPA. "People volition work it and get frightened like, 'what if I spell retired with friends oregon wage rent and bash everything via Venmo oregon Zelle?' Generally, nary if you're not a concern and an individual."

Financial experts urge utilizing 1 app for concern and 1 for idiosyncratic that mode things volition beryllium abstracted and easier to control.

With this change, you tin expect outgo apps to commencement asking for much accusation to clarify the quality of your transactions.

"One happening they tin bash otherwise is [to] marque definite you person a idiosyncratic account, and concern relationship truthful doesn't co-mingle funds truthful easier to way erstwhile you're doing taxes each year," said David Lister with KraftCPAs.

They volition besides petition your vitals, specified arsenic your leader recognition fig oregon societal information number, that they volition stock with the IRS.

The IRS website volition laic retired the timeline, expectations, and rules for third-party outgo app users for much information.

Seena Sleem astatine WTVF archetypal reported this story.