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Opinion holder entrepreneur You are the contributor.
Digital Entrepreneurs, Freelancers and Small Business Owners Pause Implementation of IRS Rule Change That Requires Payment Processing Platforms to Issue a Form 1099 for Transactions Totaling Over $600 you will be glad to know Payments for goods and services, including tips, are considered taxable commercial transactions by law.
Previously, the IRS issued a 1099-K form only if a company recorded 200 transactions totaling $20,000 in a year.
CNN quoted IRS Commissioner Doug O’Donnell on the delay, saying, “The IRS and Treasury Department have heard many concerns about the timeline for implementing these changes under the American Rescue Plan.” O’Donnell said the IRS wants the transition to go smoothly, adding, “The additional time will help reduce confusion during the upcoming 2023 tax return season and help taxpayers prepare and understand the new reporting requirements. It helps provide more time to do.”
Ideally, small business owners and independent contractors now have more time to understand the new reporting requirements and ensure they are prepared.
CNN said that when the rule comes into effect, there will be no additional taxation and it will not affect Venmo’s personal transactions, such as splitting a check at a restaurant. However, the 1099-K report is expected to effectively reduce tax evasion.
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