Payment Platforms Required To Report Transactions To IRS

As of January 1, payment platforms like Venmo, PayPal, and Zelle must report transactions of $600 or more to the IRS, down from the previous $20,000 threshold. This change aims to increase tax compliance, especially among gig economy workers. The new reporting requirement is part of the American Rescue Act, expected to raise $8 billion in additional tax receipts over 10 years. The popularity of payment apps has surged, with Venmo handling over $58 billion in a single quarter. However, not all transactions are taxable, such as personal gifts or shared expenses. Users are advised to correctly categorize transactions to avoid legal issues.

What types of transactions are not taxable or reportable to the IRS according to the text?

Evaluate responses using AI:

OFF

What advice does Venmo give to its users regarding the selection of transaction types?

Evaluate responses using AI:

OFF