As of January 2022, all third-party payment processors such as PayPal, Venmo, Cash App, Zelle, etc., must report business transactions if they exceed $600 in a year.
So, what does this mean for you as a consultant?
Well, in this episode, I’m going to identify how this will impact your firm’s finances, what you should expect, and the tasks you must complete.
We are at the top of the year, and the tax changes are rolling in already. As a business owner, you must be prepared to handle them effectively.
As of the date of this video, third-party processors have a new tax reporting guideline that can affect your business finances in a significant way.
Before this recent tax law change, third-party processors were required to report to the IRS if a user received payments exceeding $20,000 total or had 200 plus transactions in one calendar year.With this change, if you received payments for goods and services totaling $600 plus, they are now required to report the amount to the IRS.
The only way to ensure that the 1099-K you receive from these companies is 100% correct is to have your bookkeeping in order.
There are several ways this can be completed:
You will receive the forms at the beginning of next year for this year’s transactions. The 1099-K form will be used to fill out your 2022 income taxes that are due in March or April of 2023.