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Cash app transactions4/2/2023 Venmo, for instance, has an updated FAQ that notes “customers may receive an in-app notification or email … asking to confirm the information they use when filing their taxes. “ are relying on consumer prompts and interfaces to help consumers classify the reportable versus non-reportable transactions on the front end, and then educational pieces, like FAQs, to help the consumer understand the details of the new reporting requirements if they receive a 1099,” said Scott Talbott, senior vice president of government relations at the Electronic Transactions Association. That means the first 1099-Ks issued under the new, lower threshold won’t go out until early 2023.īut look out for communications from your app provider about the change and what, if anything, you’ll need to do, such as provide more information to the company or better identify the nature of your transactions. The new requirement – included in the American Rescue Plan, which was signed into law last year – will apply to tax year 2022 and beyond. So it does not include personal transactions, such as being reimbursed by a friend for dinner or receiving money to pay for a group gift. It used to be they only needed to do so if you had more than 200 business transactions in a year that totaled at least $20,000.Ī business transaction is defined as payment for a good or service, including tips. Payment app providers now must issue you and the IRS a Form 1099-K on your business transactions if, combined, they total more than $600 a year. But it does make it harder for someone to evade existing taxes owed if they’re getting paid through an app for business transactions. The new rule, which took effect January 1, doesn’t impose any additional taxes on payment app users. If you use payment apps like Venmo, PayPal or CashApp, the new year ushered in a change to an IRS tax reporting rule that could apply to some of your transactions.
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