Last March Congress passed the American Rescue Plan with much fanfare. The Bill was so urgent, there was little debate. What has come to light is the new 1099-K reporting requirements for those that use cash apps like Venmo, Paypal, Cash App, and Zelle.
The old reporting rule required cash apps to report users with $20,000.00 or more in value AND at least 200 transactions. The new rule requires cash apps to report users with at least $600 in transactions, no matter how many transactions are involved. This is a monumental change to the law.
The Administration promises users will only be taxed on commercial transactions – but the onus will be on the taxpayer to prove which transaction are personal and which are commercial.
Attorney Steven A. Leahy talks about what to expect when these new rules are implemented.