WASHINGTON — Benjamin Franklin famously said, "Nothing is certain except death and taxes."
The good news for you is I am not here to talk about death. But I am talking about taxes.
And helping you not make a grave mistake in the coming weeks with the IRS.
What's the issue?
Well, if you like to send a lot of cash to friends through apps like Papal or Venmo these days, you may want to listen up.
The issue is that these payment sites, starting this year, have to report more transactions to the IRS creating a possible issue in the coming weeks for millions of Americans.
For years – Venmo, Paypal, Etsy, and others only reported transactions to the IRS when at least $20,000 was processed by an account user in a given year.
The figure changed to $600 in 2022. A much lower amount.
The change was made by President Biden when he signed The American Rescue Plan last year and is designed to catch some Americans who are not fully reporting their income.
Many Americans, from photographers to barbers, have been getting paid through these apps for years.
There is a push on capitol hill to delay this law, but so far that hasn't passed.
This upcoming tax season will be the first time a 1099-k form, detailing these transactions, is sent to so many Americans.
To be clear the IRS is not going to tax the money a friend sent to as a gift or for that pizza you bought them.
If you actually did receive some income via Venmo or Paypal last year – now is the time you should take steps to prepare to pay your fair share.
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