Payment Platforms Required To Report Transactions To IRS
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Business, Social Studies
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As of January 1, payment platforms like Venmo, PayPal, and Zelle must report transactions of $600 or more to the IRS, down from the previous $20,000 threshold. This change aims to increase tax compliance, especially among gig economy workers. The new reporting requirement is part of the American Rescue Act, expected to raise $8 billion in additional tax receipts over 10 years. The popularity of payment apps has surged, with Venmo handling over $58 billion in a single quarter. However, not all transactions are taxable, such as personal gifts or shared expenses. Users are advised to correctly categorize transactions to avoid legal issues.
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2 questions
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1.
OPEN ENDED QUESTION
3 mins • 1 pt
What types of transactions are not taxable or reportable to the IRS according to the text?
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2.
OPEN ENDED QUESTION
3 mins • 1 pt
What advice does Venmo give to its users regarding the selection of transaction types?
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