Paypal Changes for 2022

If you own your own business or have a side hustle and get paid through digital apps like PayPal, Zelle, Cash App or Venmo, earnings over $600 will now be reported to the IRS. A provision from the 2021 American Rescue Plan, which went into effect on Jan. 1, directs third-party payment processors to report transactions received for goods or services totaling over $600 per year to the IRS. 

Prior to this legislation, a third-party payment platform would only report to the tax agency if a user had more than 200 commercial transactions and made more than $20,000 in payments over the course of a year. 

The key thing to know right now is that it doesn't apply to your 2021 tax return, which you'll file this tax season. But it will apply to the earnings you make throughout 2022, which you'll report when you file in 2023. 

Will never use PayPal as its a big ripoff also Zelle and the other turkey Venmo.

You only need 1 post!!!

Some of us unfortunate to live in a few select states were already subject to the dreaded PayPal 1099-k tax forms: HERE

Copy / paste:

Several states have already closed this reporting loophole on the state level:

• Maryland, Massachusetts, Mississippi, Vermont, and Virginia require a 1099-K to be filed with the state tax agency if a TPSO pays a state resident $600 or more during the year.
• Illinois and New Jersey have a $1,000 1099-K threshold (plus, for Illinois, a requirement of at least four transactions).
• Arkansas has a $2,500 threshold.
• Missouri has a $1,200 threshold.

So, what's the solution?  Do we have to keep track of what we paid for an item vs. what we sold it for or won't that matter?  If you sell $5,000 worth of equipment this year, you'll get a 1099-K for $5,000 for additional income?