"That hasn't changed with this new and now delayed proposal," he says. However, Jervis says that nothing has really changed for taxpayers since they have always been responsible for accurately reporting all income. Obviously, this last-minute delay has created some confusion for gig workers and others who accept payment through money transfer apps and might have been preparing for the change. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements." "To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. "The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan," said Acting IRS Commissioner Doug O'Donnell in a press release published on IRS.gov. Instead, the IRS says the upcoming months may serve as a "transition period" to help companies prepare for the change. This means third-party companies are not required to report transactions over $600 on a Form 1099-K to the IRS for the 2022 tax year. The $600 Rule Is Delayed: Now What?Ĭrazy enough, the IRS announced its intention to delay this rule on December 23, 2022. "This doesn’t include things like paying your family or friends back using PayPal or Venmo for dinner, gifts, shared trips, etc.," shares PayPal in a press release. For example, the new threshold for reporting was created to apply only to payments received for goods and services. "This led Congress to shift the responsibility to payment processors like Venmo, Cash App, and Paypal to report payments made through their platforms."Īccording to PayPal, however, it's important to note that the rule only applies to some kinds of money transfers.
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