IRS Delays New $600 Reporting Threshold for PayPal, Venmo
The Internal Revenue Service has announced a delay in reporting thresholds for apps like Venmo, PayPal and others, which was set to take effect for the upcoming tax filing season.
As a result of this delay, these payments services will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.
The IRS said that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting, which could likely affect millions or filers.
The American Rescue Plan of 2021 lowered the reporting threshold for business transactions to $600 per year. That’s down more than 200 transactions per year and an aggregate amount of $20,000. The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill. However, it could prove difficult for companies to differentiate between these transactions when issuing Form 1099-K.
The IRS also noted that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect.
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What a stupid comment Derek!
Individuals who get money should not evade taxes by being opposed to this $600 requirement.