CLEVELAND (WJW) — Some confusion is swirling around about new tax legislation that would give the IRS more details into money going into and out of personal financial accounts.
The legislation is spelled out in the General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposal (page 88) where it says the requirement would apply to all business and personal accounts from financial institutions, including bank, loan, and investment accounts, except accounts below $600.
This proposal from the Treasury Department explains that under current law, businesses have limited accountability to report their income, which is receipts for only certain types of revenue (from Forms 1099-MISC, 1099 NEC, and 1099-K), and there is no information reporting on total deductible expenses.
What about personal payment services on your phone?
According to a report from verifythis.com, using third-party applications, like CashApp, Venmo, or PayPal, only applies to goods and services, not personal payments, like if someone paid you back for a dinner.
Will you be sent a 1099 for using money apps like Venmo or Zelle after $600 worth of money has been sent?
Yes, you will likely receive a 1099-K form if you receive more than $600 on an app. But that doesn’t mean you owe any additional taxes, verifythis.com says.
This legislation would also apply to businesses receiving cryptocurrency in transactions of more than $10,000. They would also have to report them.