If you use third-party payment systems to get money, be on the lookout for a tax form impacting your 2022 tax year.
Companies like Venmo, Zelle and Cash App will send users Form 1099-K for transactions done either by electronic means or mail, Forbes reported.
The change will mostly impact businesses, according to Mashable. Originally payments of $20,000 or more had to be reported, but this figure has been lowered to $600.
Venmo, which is owned by PayPal, said the adjustment will affect payments for goods and services, not money transactions between family and friends, and will apply to all third-party systems, Mashable reported.
The form will be used in 2023 to report your 2022 earnings, according to Forbes.
Companies may start asking you for additional account information — either your employer identification number, the individual tax identification number or your Social Security number — if they don’t already have it.
The tax itself isn’t new, just how it is being reported.
The 1099-K form has both taxable and nontaxable sources, so when you report your taxable income, you will need good records of bank statements, receipts, and invoices. If you own a business, separate your accounts into a business one and a personal one, Forbes suggests.
If you have any questions about the threshold, who will have to pay and the 1099-K form, contact a tax professional, Mashable advised.
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