1099-K changes for services like Venmo and Paypal

2003TIDE

Hall of Fame
Jul 10, 2007
8,042
3,826
187
ATL
I really wasn't paying attn and finally noticed they dropped the limit on reporting 1099-k's from $20k to $600. I'm not really sure how it is going to work. A lot of people transfer more than $600 on venmo. Go out to dinner with friends at a place that won't split a check so one person covers and everyone venmo's money etc. Not sure how the IRS will differentiate that with income of Gig worker who they are trying to target.

Personally, I'm going to have to figure out how to report next year. Every year I sell my MIL football tickets for games that are unused and just transfer her the money because she doesn't really do "online" stuff very well. Now I'm going to have a 1099-k sent to the IRS.
 

Bamabuzzard

FB Moderator
Aug 15, 2004
28,612
10,647
237
47
Where ever there's BBQ, Bourbon & Football
You will receive a 1099-K if you receive $600 or more through these cash apps. That DOESN'T MEAN it is taxable or even reportable. It just means you have a record of what has been reported to the IRS. If you are not a business and the $600 has nothing to do with income, then you do not report that amount on your tax return. However, if you are audited you will need to have documentation of the items that make up the $600 were for.

If the $600 or more is related to income aka business income, then you will need to report that amount on your tax return.
 
Last edited:

MobtownK

All-American
Nov 20, 2004
3,496
7,576
187
43
Mobile, Alabama, United States
I am the treasurer for our scout pack. This has really impacted us. We shut down the paypal account, but use square for selling popcorn for fundraising. The square (& old paypal) will both get a 1099-K, but one is in an individual's name, the other in our charter organization's ein.... so we are working through the process of getting our own ein as a non-profit.
This year it is causing chaos - but next year will be smooth sailing if we (I) get the paperwork correct.
 

2003TIDE

Hall of Fame
Jul 10, 2007
8,042
3,826
187
ATL
You will receive a 1099-K if you receive $600 or more through these cash apps. That DOESN'T MEAN it is taxable or even reportable. It just means you have a record of what has been reported to the IRS. If you are not a business and the $600 has nothing to do with income, then you do not report that amount on your tax return. However, if you are audited you will need to have documentation of what the items that make up the $600 were for.

If the $600 or more is related to income aka business income, then you will need to report that amount on your tax return.
It feels like the ticket sales things from Stubhub to PayPal could be misconstrued as income though. $2000 was made and the end of the say vs what the cost of tickets were. I'm not keeping any of it. Not really sure if I don't claim anything if the IRS really cares, but I will have a paper trail showing 100% $X from sales gets transferred back to MIL. Only thing I use PayPal for is to transfer money from StubHub to there before I transfer to my bank account to cut a check to her.

EDIT. Not really sure I understand the whole "you aren't a business" thing either. My understanding is this was put in place 100% to catch income from independent Gig workers.
 

Bamabuzzard

FB Moderator
Aug 15, 2004
28,612
10,647
237
47
Where ever there's BBQ, Bourbon & Football
It feels like the ticket sales things from Stubhub to PayPal could be misconstrued as income though. $2000 was made and the end of the say vs what the cost of tickets were. I'm not keeping any of it. Not really sure if I don't claim anything if the IRS really cares, but I will have a paper trail showing 100% $X from sales gets transferred back to MIL.

EDIT. Not really sure I understand the whole *"you aren't a business" thing either. My understanding is *this was put in place 100% to catch income from independent Gig workers.
The football ticket aspect of it can definitely be misconstrued as income but the burden of proof that it isn't income is on the taxpayer. Documentation will need to be kept to show if ever audited.

*It means the same thing. People who provide products or services for cash are considered "businesses" by function and tax law and should be filing a Schedule C as a sole proprietor to report that income. This was put in place to catch them.
 
Last edited:
  • Thank You
Reactions: 2003TIDE

2003TIDE

Hall of Fame
Jul 10, 2007
8,042
3,826
187
ATL
How did this get moved? I put in the other forum since that is where the tax stuff is (that the site owner put there)?
 
Last edited:

TIDE-HSV

Senior Administrator
Staff member
Oct 13, 1999
81,227
32,332
437
Huntsville, AL,USA
You will receive a 1099-K if you receive $600 or more through these cash apps. That DOESN'T MEAN it is taxable or even reportable. It just means you have a record of what has been reported to the IRS. If you are not a business and the $600 has nothing to do with income, then you do not report that amount on your tax return. However, if you are audited you will need to have documentation of the items that make up the $600 were for.

If the $600 or more is related to income aka business income, then you will need to report that amount on your tax return.
I know it's just the IRS' word, but they say they will be looking for, of course, large transfers, and repeating transfers to the same individual of similar amounts, indicating probable gig work...
 

2003TIDE

Hall of Fame
Jul 10, 2007
8,042
3,826
187
ATL
I know it's just the IRS' word, but they say they will be looking for, of course, large transfers, and repeating transfers to the same individual of similar amounts, indicating probable gig work...
So what is your opinion? Stubhub pays out around 8 days after a game. So there are a bunch of multi-hundred dollar transfers into my account. Should I just withhold some of the earnings from the ticket sales and claim it and just pay?

Next year I’m creating a PayPal account in her name and letting her deal with it…
 

BamaNation

Publisher and Benevolent Dictator
Staff member
Apr 9, 1999
18,855
12,864
432
Silicon Slopes
TideFans.com
Absolutely stupid policy change promoted by absolutely stupid people. They have no idea of the impact on people. If I buy a Bama ticket package for $1000 as part of my season package and sell the Bama tickets to my brother and he pays via venmo or i sell them through the ticket portal via stubhub for $700, this policy treats it like a $700 profit unless, of course, I make sure I keep all records and have to prove my innocence.

I guess if you have no real experience in real life in 2022 you implement stupid policies like this. A pox on the houses of every single person who made this happen. The IRS already can't keep up with things (and releases, illegally by the way, taxpayer data b/c their systems are so antiquated. Now they're going to monitor venmo and paypal and zelle transactions. Idiocy.
 
Last edited:

Bamabuzzard

FB Moderator
Aug 15, 2004
28,612
10,647
237
47
Where ever there's BBQ, Bourbon & Football
I know it's just the IRS' word, but they say they will be looking for, of course, large transfers, and repeating transfers to the same individual of similar amounts, indicating probable gig work...

“The nine most terrifying words in the English language are ‘I’m from the government and I’m here to help.’”-Ronald Reagan
I think in reality they are going after anyone who is basically running a business (and its unreported income) through cash apps. Granted, they can get behind a podium and say anything they want to the public and then (outside the public eye) do another. Just like the government will tell you they do not decide to audit people and vendors they come across while doing an audit of another individual or business, but I know for a fact they do. So, I don't put much stock in what they say publicly.
 

Bamabuzzard

FB Moderator
Aug 15, 2004
28,612
10,647
237
47
Where ever there's BBQ, Bourbon & Football
BTW, I obsessively report EVERY nickel of income from my businesses. This isn't about trying to hide anything for me, it's about the encroachment of the IRS into everyday life transactions.
It is about the inconvenience that will come with having to "prove" that monies were not income. There isn't any such thing as a "smooth" audit, even if nothing is found. It is very, very burdensome on the taxpayer.
 
Last edited:

Latest threads

Amazon Prime / TideFans.shop


Your purchase through our Amazon affiliation and TideFans.shop links helps support the site! Thanks!