Use Venmo? Tax changes are coming
WASHINGTON (Gray DC) - Filing taxes can be confusing. If you use apps like Venmo, Cash App or PayPal, it could soon get even more complicated.
Until now, Venmo users didn’t have to report income they received through the app, if it was under $20,000.
As a part of the American Rescue Plan, Congress lowered that requirement to just $600.
“I feel like that’s really the thing that’s burdensome. For many, they don’t declare their income, and now, they have to [declare],” said Michael Harlen, a touring musician, who is primarily paid through Venmo.
The new requirement didn’t add up for Sen. Bill Hagerty (R-Tenn.) either.
“Think about all the small businesses, even individuals that, you know, basically have transactions back and forth. They’re now going to have to file new IRS forms,” said Hagerty.
Hagerty is now introducing the ‘SNOOP’ Act, short for Stop Nosy Obsessions with Online Payments. It would re-establish $20,000 as the minimum reporting requirement for those paid through apps.
“This is the process of trying to fix what should have never happened,” said Hagerty.
Hagerty faces an uphill battle. Right now, his bill only has support from Republicans.
The $600 threshold will go into effect for the 2023 tax season. According to Venmo’s tax experts, it only applies to earned taxable income, not reimbursements.
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