Tax Delay Regulations for Payment Apps like Venmo and PayPal: IRS Seeking Better Compliance for Self-Employed Individuals
IRS Postpones Implementation of Tax Reporting Regulations for Payment Apps like Venmo and PayPal Until 2023
There has been news concerning tax reforms that impact independent contractors and other self-employed individuals. The US tax agency, the IRS, is establishing guidelines about how payment apps such as Venmo and PayPal must declare income. The new regulations were supposed to take effect in 2022, but because it can be difficult to determine which transactions should be subject to taxes, they were postponed for an additional year. This allows payment apps and the IRS more time to prepare.
Tax Delay Issue: 1099-K Reporting for Venmo and Cash App Users – What You Need to Know! (PHOTO: Wiggam Law)
IRS Raises Threshold for Payment App Reporting to $5,000 for 2024 Tax Year
The IRS now requests that payment apps record earnings over $5,000 for the 2024 tax year (which you file in 2025) rather than the $600 they had originally intended. The goal of this adjustment is to simplify matters and provide more time for everyone to get used to it. You still have to accurately declare all of your earnings when you submit your taxes, even if you don’t receive a tax form from every place you make money. There may be more changes in the future, so stay tuned for updates.
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