Tax Reporting Change Kicks In with 1099-K: IRS Knows When You’re Using Payment Services

Are you a small, small business — freelancer, independent contractor — who uses a third-party settlement service to move money into your accounts when you get paid by customers? Well, if you do more than $600 in transactions in a given year with a digital payment service, the IRS will be made aware because there are tax reporting changes beginning in 2022.

Digital payment services such as Venmo, PayPal, Zelle and others are now required to report your transactions to the IRS and issue a Form 1099-K to the business. Basically, the IRS knows the income you’ve made every time you use such a service.

CPA and small-business owner Gene Marks shares his insights on this week’s episode of the “On the Mark” podcast.

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