RENT Magazine Q1 '23

Zelle is a true peer-to-peer payment app; funds transfer directly from one checking account to another. Venmo and PayPal, on the other hand, require accounts and act as a "middleman" between users. Because of this peer-to-peer functionality, Zelle has no obligation to report your transactions to the IRS because they aren't technically a "third-party settlement organization." Don't get too excited, though — Zelle doesn't report your income, but that doesn't mean the IRS won't come looking for it. Rent payments are taxable income, and when collected through a payment app, they still need to be reported in a 1099-K. Landlords using Zelle to collect rent will need to find, fill out, and submit a 1099- K and any other necessary tax forms without Zelle's help. To make matters worse, Zelle has no built- in functionality to see your transaction history or to tag certain transactions, like rent payments. If you want to see how much money you sent or received through the app, you'll have to request a statement from your bank and sift through it manually. ZELLE TAXES: SINK OR SWIM, THEY DON’T CARE EITHER WAY

Quick Recap of Zelle’s policies

• Zelle is "hands-off" when it comes to your taxes, for better or worse. • They will not report transactions to the IRS. • They will not issue you a 1099-K. • They have no way to track or organize your transactions in-app.


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