IRS Sucking Sound Via PayPal, Venmo?

Thanks to small print in Dems’ American Rescue Plan there is a rule starting in 2023 requiring folks to report to the IRS sales over $600, even old stuff, via Venmo, PayPal & other cash apps. Another Big Govt overreach?

Fox Business says the “lower threshold for reporting Paypal, Venmo earnings could ‘come as a shock’ to taxpayers,” especially when they subsequently file their federal tax returns for 2023 income. Some business experts say it may dampen the use of such apps and/or engaging in such related online buying and selling. Or, is it really just Uncle Sam closing one of Joe’s loopholes, only this time, on the not so rich?

In any event, the IRS explained online last month that small business owners would have to be finking on payees via the usual Form 1099-K for third-party payments exceeding $600. According to Fox, “the payment apps were previously required to send users Form 1099-K if their gross income exceeded $20,000 or they had 200 separate transactions within a calendar year.” Now, just one stinking $600 transaction will trigger the finking, er, reporting … and possible subsequent claiming as income by recipients. According to Pew Research Center, about one in four Americans now rake in, er, earn extra income on the side (aka under the table) by selling something online, renting their home or using a digital platform to do work. Dollar says the change could discourage some Americans from participating in the gig economy. Or, they could pay their taxes as the blood sucking Tax Code says they should.

Davd Soul