If you use third-party payment systems to get money, be on the lookout for a tax form impacting your 2022 tax year.
Companies like Venmo, Zelle and Cash App will send users Form 1099-K for transactions done either by electronic means or mail, Forbes reported.
Venmo, which is owned by PayPal, said the adjustment will affect payments for goods and services, not money transactions between family and friends, and will apply to all third-party systems, Mashable reported.
The change will mostly impact businesses, according to Mashable. Originally payments of $20,000 or more had to be reported, but this figure has been lowered to $600.
The form will be used in 2023 to report your 2022 earnings, according to Forbes.
Companies may start asking you for additional account information — either your employer identification number, the individual tax identification number or your Social Security number — if they don’t already have it.
The tax itself isn’t new, just how it is being reported.
The 1099-K form has both taxable and nontaxable sources, so when you report your taxable income, you will need good records of bank statements, receipts, and invoices. If you own a business, separate your accounts into a business one and a personal one, Forbes suggests.
If you have any questions about the threshold, who will have to pay and the 1099-K form, contact a tax professional, Mashable advised.