If you haven’t heard, the IRS recently announced it won’t require platforms such as Venmo and PayPal to issue a tax form – 1099-K – when someone used them to collect more than $600 in 2022.
This requirement was delayed until at least 2023.
(The current requirement – if you collected $20,000 or had 200 plus transactions – still remains.)
If you’re unfamiliar with this, you can check out the link in the comments 👇.
The overwhelming reaction was one of relief.
But I think something has to be clarified.
Just because the IRS doesn’t “know” about your Venmo/PayPal activity, doesn’t mean your reporting requirements – as an IRS taxpayer – changed at all.
You still need to report the activity as income, assuming that’s what it was.
If your business is unfortunately audited and it turns out you only reported your non-Venmo/PayPal activity, you will be an easy target.
There may be a clear paper trail – your bank statements will show the Venmo/PayPal activity/deposits, and you may have a hard time explaining that.
Look, I understand the feeling of comfort one may feel knowing the IRS has one less way to track their activity, but that’s not an excuse for doing something silly.