SHERMAN: A NEW LAW QUREIRES CASH APPS LIKE VENMO AND CASH APP TO REPORT PAYMENTS OF $600 OR MORE TO THE IRS. THIS IS ALL BECAUSE THE AMERICAN RESCUE PLAN ACT OF 2021 INCLESUD LANGUAGE FOR THIRD PARTY PAYMENT NETWORKS TO CHANGE THE WAY TYHE REPORT MONEY EHAXCNGED ON THESE PLATFORMS. THERE HAS BEEN A LOT OF BUZZ ON SOCIAL MEDIA AND SOME PEOPLE ARE WONDERING WHETHER THEY WILL BE TAXED ON PAYMENTS RECEIVED FOR FRIENDS AND FAMI.LY OUR CPA KEMBERLEY WASHINGTON , SHEET -- SHE JOINS US LIVE TO EXPLAIN WHAT YOU NEED TO KNOW ABOUT USING THESE AP.PS M, HKEOW DOES THIS NEW TAX LAW WORK? KEMBERLEY: RIGHT, SO THIS IS A NEW TAX LAW CHANGE IN THAT IF YOU USE CASH APP OR VENDOR, YOU WILL RECEIVE A PHONE CALL IF YOU RECEIVE $600 OR MORE OF PAYMTSEN. THE FORMS I 109K,9- AND THIS HAS ALREADY BEEN IN EXISTENCE. USUALLY YOU WILL RECEIVE THIS FORM IF YOU RECEIVE MORE THAN $20,000 IN PAYMENTS. NOW IT바카라 게임 웹사이트S JUST A CHANGE IN THE THRESHOLD. MORE PEOPLE WILL START TO RECEIVE THIS FORM. SHERMAN: WILL PEOPLE HAVE TO PAY TAXES ON THIS NEW CHAN?GE WHAT SHOULD PEOPLE KNOW ABOUT THIS? KEMBERLEY: THE MAIN THING PEOPLE SHOULD KNOW IS THAT THIS DOES NOT CHANGE THE TAX INCOME. SO IF YOU RECVEEI INCOME AS IT RELATES TO BUSINESS, YOU WILL NEED TO REPORT IT ON YOUR TAXES JUST THE SAME. BUT IF SOMEBODY IS REIMBURSING YOU FOR AN EYE OUT, YOU DO NOT HAVE TO PAY TAXES ON THAT MONEY SO YOU DON바카라 게임 웹사이트T HAVE TO WORRY ABOUT THAT. SHERMAN: AND WHAT SHOULD TAXPAYERS DO RIGHT NOW ABOUT THIS? KEMBERY:LE SO IF YOU ARE LISTENING AND YOU HAVE A BUSINESS AND ALSO USE IT FOR PERSONAL. I WOULD SEPARATE THE TWO. JUST HAVE A SEPARATE ACCOUNT RFO YOUR BUSINESS AND ALSO YOUR PERSONAL ACCOUNT, SO ATTH WAYF I YOU ARE AUDITED, YOU CAN SHOW THE IRS THIS IS OFFER BUSINESS. THAT'S바카라 게임 웹사이트THE MAIN THING YOU WANT TO DO IS KEEP GOOD RECORDS AT THIS TIME. SHERMAN: WHEREAN C PEOPLE FIND MORE INFORMATION ABOUT THIS NEW TAX LAW REPORTING? KEMBERY:LE SO THERE바카라 게임 웹사이트S GOOD INFORMATION ON WHITEHOUSE.GOV바카라 게임 웹사이트S BSWEITE. THIS WAS INHE T AMERICAN RESCUE PLAN IN MAH.RC YOU CAN FIND OUT MORE
Why some payments through cash apps will need to be reported to the IRS
The American Rescue Plan includes a new law that requires cash apps like Venmo and Cash App to report payments of $600 or more to the IRS. CPA Kemberley Washington explains what you need to know.
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Updated: 6:34 PM EDT Oct 11, 2021
A new law requires cash apps like Venmo and Cash App to report payments of $600 or more to the IRS.The American Rescue Plan includes language for third-party payment networks to change the way they report money exchanged on these platforms. This decision has left many people wondering if they will be taxed on payments received by friends and family.How does this new tax law work?Currently, cash apps are required to send forms to users if their gross income is $20,000 more, or if they have 200 separate transactions within a calendar year. The income items are reported on Form 1099-K. However, as part of the American Rescue Plan, cash apps will now need to report payments over $600. This means more people will receive tax forms.Will people have to pay taxes because of this change?While this proposal is a new way of reporting, it does not change what's taxable and deductible. For example, if you are sending money to a friend or paying someone back for a meal, it's still considered nontaxable. But if you are getting money for business transactions, you are required to claim the money on your tax return and pay taxes on the income.What should taxpayers do at this time?You should still keep good records, especially if you are a business owner. This way, if you are audited, you can prove whether the money is taxable or nontaxable. It is also a good idea to have a separate cash app platform for your business.You can find more information about the new tax law reporting by following Kemberley Washington on Twitter.
A new law requires cash apps like Venmo and Cash App to report payments of $600 or more to the IRS.
The American Rescue Plan includes language for third-party payment networks to change the way they report money exchanged on these platforms. This decision has left many people wondering if they will be taxed on payments received by friends and family.
How does this new tax law work?
Currently, cash apps are required to send forms to users if their gross income is $20,000 more, or if they have 200 separate transactions within a calendar year. The income items are reported on Form 1099-K. However, as part of the American Rescue Plan, cash apps will now need to report payments over $600. This means more people will receive tax forms.
Will people have to pay taxes because of this change?
While this proposal is a new way of reporting, it does not change what's taxable and deductible. For example, if you are sending money to a friend or paying someone back for a meal, it's still considered nontaxable. But if you are getting money for business transactions, you are required to claim the money on your tax return and pay taxes on the income.
What should taxpayers do at this time?
You should still keep good records, especially if you are a business owner. This way, if you are audited, you can prove whether the money is taxable or nontaxable. It is also a good idea to have a separate cash app platform for your business.
You can find more information about the new tax law reporting by following .
