New Tax Reporting Requirements for Payment Apps
If you use payment apps such as Venmo or Cash App to make or accept payments as a business, be aware that anything more than $600 is now required to be reported to the IRS by those services. The new tax reporting requirement will impact 2022 tax returns filed in 2023.
Moving forward, any transactions greater than $600 will result in you receiving a Form 1099-K which will report the total gross income received during the year without considering any adjustments, discounts, or refunds. You are required to report any income listed on your Form 1099-K from your business on your income tax return. Best practice is to keep good records of all your payments and consult your tax advisor for proper reporting.
Zelle®, the network Citizens National Bank uses for person-to-person payments, is not subject to the law due to the fact that it does not settle any funds but rather provides messaging between a financial institution and people making payments. They have created a FAQ webpage specifically addressing this issue in case you have questions.View more Articles