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<br /><ul class="summary-list"><li>Sites like <keyword id="11899364" type="UNKNOWN" weightage="60" keywordseo="venmo" source="Orion">Venmo</keyword> and <keyword id="11928905" type="UNKNOWN" weightage="60" keywordseo="paypal" source="Orion">PayPal</keyword> now must report business transactions to the <keyword id="6359816" type="UNKNOWN" weightage="60" keywordseo="irs" source="Orion">IRS</keyword> when they total $600/year. </li><li>Congress updated the rules in the American Rescue Plan Act of 2021.</li></ul><p>Since the beginning of the new year, Venmo, PayPal, and other so-called peer-to-peer payment platforms are required <a href="https://www.nbcnews.com/news/venmo-paypal-zelle-must-report-600-transactions-irs-rcna11260">to report income to the IRS</a> if a user accumulates at least $600 in business transactions a year. </p><p>Previously, the reporting requirement kicked in if someone received more than $20,000 from at least 200 business transactions annually. </p><p>Congress changed this rule in the the American Rescue Plan Act of 2021, a COVID-19 relief bill that was passed in March. Prior to tax season, affected platform users will receive a <a href="https://www.irs.gov/businesses/understanding-your-form-1099-k">1099-K</a>, which includes the <a href="https://www.irs.gov/businesses/understanding-your-form-1099-k">total </a>dollar value reportable transactions, per the IRS.</p><p>The new rule is explicitly intended for commercial transactions.  "This doesn't include things like paying your family or friends back using PayPal or Venmo for dinner, gifts, shared trips," PayPal <a href="https://newsroom.paypal-corp.com/2021-11-04-New-US-Tax-Reporting-Requirements-Your-Questions-Answered">said</a> in a November statement about the change. </p><p>The sites have attempted to make the business/personal transaction distinction clear: In July 2020, Venmo <a href="https://techcrunch.com/2020/07/01/venmo-begins-piloting-business-profiles-for-small-sellers/">piloted</a> "Business Profiles" which had more transparency and a transaction fee, according to TechCrunch. PayPal has had a business option at least since <a href="https://www.paypal-community.com/t5/About-My-Account/How-do-I-remove-quot-Business-Account-quot-Type/td-p/705367">2013</a>; Cash App, another popular platform, has a <a href="https://squarecashelps.com/blog/cash-app-for-business-account">business</a> profile known as Cash App For Business. </p><p>This means users can self-identify what is a commercial transaction or not via the business profile. </p><p>In reality, however, nothing is really stopping users from using a personal account to run a business and avoid <keyword id="11898253" type="UNKNOWN" weightage="60" keywordseo="taxes" source="Orion">taxes</keyword>, says Jennifer Berman, CEO of MZQ Consulting. It's similar to how people skip reporting income by conducting a cash-based business, she says. "Vemo was created and sort of introduced to the marketplace as a cash-equivalent product," she said. "What's different here is there are actually records of these transactions." </p><p>Those records make it easier to require companies like PayPal to cooperate with changing laws. And unlike historical perceptions that a a lot of unreported cash income consists of lawn mowing or pocketed tips, digital third-party payments have become an enormous, she added. In last year's second quarter, Venmo's <a href="https://www.businessinsider.com/venmo-bnpl-carry-paypal-to-q2-success-2021-7">total payment volume (TPV) was $58 billion</a>. "Venmo's not that little in the aggregate," she said.</p><p>Berman noted that while not reporting your business transactions seems simple, it could be be major trouble if you get audited. That could mean penalties, fees and interest on the unreported income. "The fundamental point people are forgetting in all of this craziness is that all we're saying is 'Venmo is going to require you to follow the law,'" she said. </p><p>The new requirement has seemed to cause a little confusion online. One Facebook post claimed any transaction on Venmo or PayPal of over $600 would be taxed (which is not true) according to a <a href="https://www.usatoday.com/story/news/factcheck/2021/09/26/fact-check-treasury-proposal-wouldnt-levy-new-tax-paypal-venmo/5848220001/">USA Today</a> fact-check. This is perhaps inspired, it notes, by a US Treasury Department proposal (that has not been implemented) to track the total <em>amount</em> of withdrawls and deposits of bank accounts and financial accounts with over $600 in them, including by mobile apps, to generally limit how much money goes untaxed each year.</p><p>Republicans widely <a href="https://www.factcheck.org/2021/10/republicans-mischaracterize-proposed-financial-reporting-requirement/">panned</a> the idea, in a misleading manner, per FactCheck.org. </p><p>Third-party transactions are not the first to see a crackdown from Congress. In November, the infrastructure bill established <a href="https://www.marketwatch.com/story/heres-how-the-infrastructure-bill-targets-crypto-and-how-the-industry-could-fight-back-11636397480">new rules for cryptocurrency, </a>according to MarketWatch.</p><p>Business owners who use payment app's business profiles (if available) don't necessarily have to worry about the new law until filing taxes for 2022 in 2023–when they will receive the relevant 1099-K form from the payment services. </p>

Business owners using sites like PayPal or Venmo now face a stricter tax-reporting minimum of $600 a year

<p><div class="KonaFilter image-container display-table float_right"><div><div class="image on-image"></div><p></p></div></div>Here is what you need to know.</p><p><strong>Greece will hold a referendum on July 5. </strong><a href="http://www.businessinsider.com/the-greek-prime-minister-is-reportedly-planning-for-a-referendum-2015-6">The Greek people will decide</a> if the country will accept an accord with its creditors. As the way things stand right now, it appears the government will fail to make its 1.5 billion euro ($1.67 billion) June 30 payment to the IMF. The government's attempt at seeking a one-month extension of the bailout program was shot down by its creditors.</p><p><strong>Capital controls have been implemented in Greece. </strong>Greek banks will be closed until at least July 6 in an effort to prevent capital from rushing out of the system. In the meantime, <a href="http://www.businessinsider.com/greece-bank-holiday-2015-6">ATM withdrawls will be limited to 60 euros per day</a>. Greece's 2-year yield is sharply higher, up 1270 basis points at 33.39%.</p><p><strong>China cut rates.</strong> On Saturday, <a href="http://www.businessinsider.com/r-china-cuts-interest-rates-again-to-support-economy-2015-6">the People's Bank of China cut its key lending rate 25 basis points</a> to 4.85%. The rate cut was the fourth since November as China's central bank tries to combat a slowing economy. China's key lending rate was at 6.00% before the rate cuts began in November.</p><p><strong>Chinese stocks entered a bear market.</strong> Monday's 3.3% slide has pushed <a href="http://www.businessinsider.com/chinas-shanghai-composite-is-in-a-bear-market-2015-6">China's Shanghai Composite into bear market territory</a>. The index has lost an astounding 22% since the June 12 peak.</p><p><strong>Stock markets around the world are clawing back their early losses. </strong>Spain's IBEX (-3.8%) paces the decline in Europe. Overnight in Asia, China's Shanghai Composite (-3.3%) crashed 7.5% before trimming its losses. S&amp;P 500 futures are down 21.50 points at 2074.25.</p><p><strong>Puerto Rico cannot pay its debts. </strong>Puerto Rico's governor, Alejandro García Padilla, conceded <a href="http://www.businessinsider.com/puerto-rico-is-on-the-verge-of-default-2015-6">the island is going to have trouble paying off its $72 billion in debt</a>. Padilla said Puerto Rico will "probably seek significant concessions from as many as all of the island's creditors, which could include deferring some debt payments for as long as five years or extending the timetable for repayment". According to the New York Times, Puerto Rico cannot enter bankruptcy, and its inability to pay its debts could leave it in financial limbo for years.</p><p><strong>GE is selling its fleet assets. </strong>The Wall Street Journal reports, "<a href="http://www.wsj.com/articles/ge-to-sell-fleet-businesses-in-u-s-australia-and-new-zealand-1435561946">General Electric Co. has agreed to sell its U.S., Mexico, Australia and New Zealand fleet businesses for $6.9 billion</a>" to Canada's Element Financial Corp. The deal raises Element Financial's asset value to more than 21 billion Canadian dollars. GE is said to be seeking a smaller deal to get its European fleet assets off its books.</p><p><strong>Apple suppliers have begun production of iPhones with Force Touch.</strong> The new phone will <a href="http://www.bloomberg.com/news/articles/2015-06-26/apple-suppliers-said-to-start-making-iphones-with-force-touch">pick up how hard users are pressing the screen</a>. According to Bloomberg, the feature, "<span style="color: #3c3c3c; font-family: TiemposTextWeb-Regular, Georgia, serif;">lets users adjust the strength of their screen taps to bring up different functions." A release date has not yet been announced.</span></p><p><strong><span style="color: #3c3c3c; font-family: TiemposTextWeb-Regular, Georgia, serif;">The breakdown of the Asian Infrastructure Investment Bank has been announced. </span></strong><span style="color: #3c3c3c; font-family: TiemposTextWeb-Regular, Georgia, serif;">Reuters reports, "Countries defined as "within the region" will hold a combined 75 percent stake in the bank. <a href="http://www.reuters.com/article/2015/06/29/asia-aiib-china-stake-idUSB9N0YS02G20150629">China's share includes a 30.34% stake</a> with 26.06% of the voting rights.</span></p><p><strong>US economic data is light. </strong>Pending home sales are due out at 10 a.m. ET.</p>    <div class="margin-top">        <h3>NOW WATCH: <a href="http://www.businessinsider.com/new-omega-globemaster-watch-unboxing-2015-5">Forget the Apple Watch - here's the new watch everyone on Wall Street wants</a></h3>        <div>            <div>        <div class="ooyala-video-player" data-video-autoplay="false" data-video-id="5iaDNwdDrYYMm2yipFb14ndbRkPnemqO" data-player-variable="ooyalapopvideo" id="ooyalaplayer_popvideo" style="width:1280px;height:720px"></div>        </div>        </div>            </div>

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Business owners using sites like PayPal or Venmo now face a stricter tax-reporting minimum of $600 a year

Gabrielle Bienasz

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