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Will You Owe Taxes With the New IRS Rule for Venmo, PayPal and Cash App Payments?

The IRS has introduced a new rule affecting users of payment apps like Venmo, PayPal, and Cash App, which lowers the transaction threshold for reporting income from $20,000 and 200 transactions to just $600 in total payments for goods and services. This change, effective from the 2023 tax year, means that if you receive more than $600 through these platforms for business transactions, you will receive a Form 1099-K, which must be reported on your tax return. However, personal transactions like splitting bills or gifts are not taxable, though distinguishing between personal and business transactions might become more complex. This rule aims to increase tax compliance by capturing more income that might have previously gone unreported, but it has raised concerns about confusion among users, especially those who might receive the form for non-taxable personal transactions. The IRS has acknowledged these concerns and is working on providing clearer guidance to differentiate between taxable and non-taxable transactions.

Read the Full CNET Article at:
[ https://www.cnet.com/personal-finance/taxes/will-you-owe-taxes-because-of-the-new-irs-rule-for-venmo-paypal-and-cash-app-payments/ ]