2022 “IRS RULE” FLAGS These Tax Returns
(ConservativeInsider.org) – The Internal Revenue Service (IRS) sometimes seeks ways to ensure it receives all the tax it is due, whether through audits or new reporting measures. This year is no different. A new law now requires that money-transfer services, like Venmo and PayPal, as well as online marketplaces, like eBay and Etsy, send tax documents to Americans.
The new rule will force these digital platforms to send a Form 1099-K to users who receive more than $600 over the course of the calendar year. The IRS will also get this form. This will likely target people such as artists, babysitters, personal assistants, and freelancers who typically use these platforms to receive payment.
However, it will be difficult for many of these people to show the difference in payments made for a good or service, which is taxable, against money simply sent on the cash app, such as a monetary birthday gift.
John Cutler of Private Suite Network shared more about this:
— Private Suite Network | John Cutler (@PSuiteNetwork) May 30, 2022
In an interview with Financial Planning, Ken Ayler, the CEO of financial bookkeeping firm Aquilance, emphasized that people should keep detailed records of the transactions, as it will be up to each American to prove something was not taxable. He noted that “if you have no records, it’s going to be imputed to be income.”
Hopefully, this new rule will ensure the right taxes get to the right place without causing too much confusion or excessive audits in the future.
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