Income Taxes

Forum|Forum|3 years ago
August 31, 2022
3 replies
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What type of financial payments that are transferred by Venmo and PayPal are reportable and is there a W 2 type form issued to the person that receives the funds?

Bsch4477

Employee

Beginning January 1, 2022, all third-party payment processors in the United States are required to report payments received for goods and services of more than $600 a year. This means if you’ve sold goods or conducted a business service and collected payment through Venmo, PayPal, Cash App, Square, Stripe, Etsy, or eBay, you will receive a 1099-K Payment Card and Third-Party Network Transactions Form, and that income will be reported to the Internal Revenue Service (IRS).

JoanO

How will the IRS know if a Vinmo payment is just someone paying back a loan? Will i be taxed on a loan repayment?

JamesEmory

PayPal just notified me of this change on 9/21/2022. Why did they wait that long to inform me is questionable irresponsibility toward their customers. So now I have to pay a ton of taxes because the new law is not 200 or more invoices and 20K or more in income before a 1099K is issued. Shame on PayPal. Had I known in January when they knew, I could have put money away toward taxes. Shame on PayPal.

JamesEmory

So if I receive 600.00 for sales into PayPal and transfer that 600.00 to my checking account, am I going to be taxed for 600.00 twice?

Bsch4477

Employee

No. You only pay tax on your business income reflected on your K-1.

JamesEmory

Thanks Champ. The way I read, it was all incoming money exceeding 600.00 per year to any banking institution will be reported to the IRS. So your answer is a relief somewhat.