Payment Platforms Required To Report Transactions To IRS

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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