Payment Apps & IRS -- My $. 02
[QUOTE=Jake100;6232393]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. So if you have a Zelle, Cash App, Venmo, Paypal account and you receive more than $600 in total receipts for calendar year 2022 you'll receive a 1099-K sent from that app service. If you have a side business you'd be wise to document all the e-payments.[/QUOTE]Although cash transaction for hobby work is always the best option, I don't believe the hobby is in trouble. Providers may have to receive donations in other ways. Here is a link to the actual IRS instructions for the 1099-K: [URL]https://www.irs.gov/businesses/understanding-your-form-1099-k[/URL].
Here is what the actual form looks like: [URL]https://www.irs.gov/pub/irs-pdf/f1099k.pdf[/URL].
In the situation of a small business (like my consulting business), All transactions, especially income and expenses, are documented in my QuickBooks Self-Employed account. Payments received via PayPal or anywhere else wind up in my company bank account. Individual clients with whom I have a continuing relationship send me a 1099 at the end of the year. Regardless of how they pay me, it all eventually winds up being reported.
I have one client who pays me with gift cards. That company will now have to file a 1099-K if the gift card is over $600.
I'm thinking that a lot of ladies will stop using PayPal and other similar apps. But, this hobby has persisted through thick & thin, so I think we'll be fine.
