Tax reporting for Cash App payments
MOBILE, Ala. (WALA) -If you make money and get paid by using certain apps, the IRS may be coming after its share of those earnings.
Starting in 2023, earnings of more than $600 that come from third-party payment apps like Venmo, Paypal and Cash app will need to be reported to the IRS.
The change came as a result of the American Rescue Plan act; a rule aimed at people who run a side hustle, small business, or do part-time work. It means those earnings will be taxed.
Even a single payment more than $600 will trigger a 1099-K form for users. To be clear this is only applies to payments for goods and services transactions.
So, if you’re sending money to a friend for lunch or dinner, selling something online, or collecting a one-time payment this shouldn’t apply to you.
Millions of Americans make money online. According to reports, roughly one in four Americans rake in extra income on the side by selling online, renting their home, or using a digital platform to do work.
Critics say the changes could hurt small businesses, or even the occasional gig economy worker...who before the change followed different thresholds.
side-hustlers only needed to report gross payments exceeding 20-thousand dollars and earnings reaching more than 200 such transactions.......”
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