IRS delays Venmo, CashApp rule change
LINCOLN, Neb. (KLKN) – Anyone getting paid for their goods and services through apps like Venmo or Esty, just got a reprieve from the IRS.
The IRS announced it would delay the implementation of a rule change that would have resulted in a virtual paper chase of tax forms going out by January 31st, 2023, to anyone using such apps for their business transactions.
The IRS has postponed it by a year.
The move follows concerns from the tax preparation community, the electronic transactions industry and some lawmakers.
The rule which would require third-party payment platforms to issue a 1099-k to both the IRS and the individual app user.
It would apply for payments that exceed 600-dollars over the course of the year.
A business transaction that is taxable is defined by the IRS as any payment for a good or service, including tips.
It used to be those platforms only had to issue a 1099-k if you engaged in more than 200 business transactions for which you received total payments of more than 20-thousand-dollars in a year.