Payment apps are all the rage these days thanks to their ease of use and convenience. Venmo, Zelle, Cash App, and PayPal are among the most popular apps, and some landlords use them to collect rent. If you haven’t thought much about the tax implications of using payment apps, now is the time to start. The IRS has begun cracking down on payment apps in a big way. So, what does this mean for rental property owners? If you use payment apps to collect rent, you might find yourself in the crosshairs of the IRS. IRS CRACKS DOWN ON LANDLORDS USING PAYMENT APPS TO COLLECT RENT
HOW THE IRS IS COMING AFTER PAYMENT APP USERS Before 2022, only payment app users who did more than $20,000 or 200 transactions in a given year would receive a 1099-K. This is rare for a small business, as most transactions typically go through credit cards, ACH, or other means. In 2022, Congress amended the tax rules so that payment app users who do more than just $600 in transactions will now receive a 1099-K. Goods and services providers all over the country, such as independent landlords, freelancers, artisans, and food truck owners, will now be required to report even a small amount of taxable income to the IRS.
PAYMENT APP USERS WHO DO MORE THAN JUST $600 IN TRANSACTIONS WILL NOW RECEIVE A 1099-K.
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