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New IRS 1099-K Tax Rule: Here's What Freelancers Who Made Money on PayPal or Cash App Need to Know

The IRS has introduced a new tax reporting rule for 2023 affecting freelancers and others who receive payments through third-party settlement organizations like PayPal, Venmo, and Cash App. Previously, these platforms were required to issue a Form 1099-K only if a user had over 200 transactions and more than $20,000 in payments. However, under the new rule, a 1099-K will be issued for anyone receiving over $600 in payments, regardless of the number of transactions. This change aims to increase tax compliance by capturing more income that might have gone unreported. Freelancers and gig workers need to be aware that this form will now reflect a broader range of their income, potentially including personal transactions if not properly documented. It's crucial for users to keep meticulous records of their transactions to distinguish between taxable income and non-taxable personal transactions, and to report their income accurately to avoid discrepancies with IRS records.

Read the Full MSN Article at:
[ https://www.msn.com/en-us/money/personalfinance/new-irs-1099-k-tax-rule-here-s-what-freelancers-who-made-money-on-paypal-or-cash-app-need-to-know/ar-AASziJu ]