Impact of IRS 1099-K Delay on Taxes for PayPal, Venmo, and Cash App Users

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with a class attributing it to speakableTextP1. It conveys that tax time has begun, and if you are expecting a 1099-K form to file, pay attention. Many taxpayers who had anticipated receiving a 1099-K will not be receiving one. This is because the IRS has chosen to postpone introducing this new tax reporting obligation.

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with the class ‘speakableTextP2’ has shared that plans were in place for early 2022 to initiate a new rule enforcing third-party payment apps, such as PayPal, Venmo, Cash App, or Zelle, to report income over $600 annually to the tax enforcement agency. Despite this, the rollout has been postponed until the future.

In November last year, the IRS announced the pause of this rule for the second year running. The complexities of distinguishing between transactions that are taxable and those that are not across third-party apps has prompted this. This delay allows payment platforms additional time to get ready.

“We spent many months gathering feedback from third-party groups and others, and it became increasingly clear we need additional time to effectively implement the new reporting requirements,” says IRS Commissioner Danny Werfel in a statement from November 2023.

“Any payment apps you use might request confirmation of your tax information, such as your employer identification number, individual tax identification number, or Social Security number. If you own a business, you most likely have an EIN, but if you’re a sole proprietor, individual freelancer, or gig worker, you’ll provide an ITIN or SSN,” says the next paragraph.

After the series of paragraphs, there are multiple headers including “What’s the IRS $600 payment rule?” and “What the IRS 1099-K change means for your 2023 tax return”, each giving comprehensive details on different aspects linked to tax requirements and implications for taxpayers when filing taxes.

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