Remember That new IRS tax reporting requirement that meant anyone who made more than $600 online through third-party payment apps like Venmo, Zelle, PayPal, and others? Yeah, we’re all getting a one-year reprieve.
The Internal Revenue Service has decided to push it back another year to 2024. Here’s part of a statement from acting IRS Commissioner Doug O’Donnell.
“The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan. To help smooth the transition and ensure clarity for taxpayers, tax professionals, and industry, the IRS will delay implementing the 1099-K changes.”
The Democrats lumped this into their American Rescue Plan build last spring – and it stated that if any American received over $600 from third-party companies, a form 1099-K would have to be sent to the customer. This is such a big deal because, before this, payment apps would only be required to send a form 1099-K if their gross income exceeded $20K or if they conducted 200 separate transactions in a year.
To say this bill was not popular with Republicans and tax pros would be an understatement of epic proportion. The IRS was lobbied hard to delay this measure because of the confusion for taxpayers it would cause and also for the problems it would create at the IRS. The last thing they need is something else that would bog them down.
Business owners are already required to report that income to the IRS. The new law would burden the IRS to determine how much came from the cash apps. In essence, the IRS would be auditing returns to see if a 1099-K was needed.
The extra year will at least give American business owners time to adjust.
Add comment