If you receive income via Venmo, PayPal, or CashApp then you’re in luck! The IRS chose to delay its 2021 law that required those who use payment platforms to send in tax forms if they received over $600 in that current year.
The Update
The IRS has postponed implementing the new regulation for another year, following last year’s decision to defer it until 2023. In an announcement on Tuesday, the agency stated it would extend the delay by another year “to reduce taxpayer confusion.”
An estimated 44 million 1099-K forms would have been dispatched to numerous taxpayers in the ongoing tax year, if this delay had not occurred. However, the IRS clarified that many of these recipients might not have owed taxes on the payments and wouldn’t have anticipated receiving such forms.
Instead of moving forward with the new regulation, the IRS will stick to an existing criterion — requiring over 200 transactions exceeding $20,000 in income — to dispatch 1099-Ks in early 2024 for the completion of the ongoing tax year’s returns.
What’s Next?
The IRS has chosen to increase the payment threshold. Instead of $600 it is now $5,000 in payments. That means people who receive more than $5,000 in payments via PayPal and other apps in 2024 would receive the 1099-K tax form in early 2025 to complete their 2024 tax returns.
Unless the IRS makes another change, this means that in 2025 the payments will go back to $600.
If you have any questions, contact Paragon today!
