If you’re a freelancer or gig worker who receives payments via apps like Venmo, Zelle, Cash App or PayPal, your tax reporting requirements will change for the
FILE – Logos for Cash App are shown on devices in New York, Sept. 8, 2023. Tax reporting requirements for freelancers or gig workers who receive payments via apps like Venmo, Zelle, Cash App or PayPal will change for the 2024 tax year. Workers across different industries are increasingly receiving some or all of their income via apps.
But beginning next year, that threshold will be just $5,000, which will eventually be lowered to $600. Freelancers, gig workers, and online sellers owe taxes on their income regardless of whether they meet the reporting threshold to use 1099-K forms, but it can be difficult to keep track of every payment, especially across sites and apps. This can lead to confusion and underpayment, experts say.
Currently, if someone paying a freelancer via Venmo, Zelle, or CashApp sends a form to the IRS reporting that pay, but the freelancer doesn’t report the income with the same form, that creates a “matching error” for the agency. The change will ensure both that taxpayers receive proper refunds and that the IRS receives proper payment.
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