IRS requires Venmo, PayPal and Zelle to report transactions.

As a result of the AMERICAN RESCUE PLAN ACT (a COVID related relief bill passed in March of 2021), these popular payment apps must report all transactions from accounts with over $600 commercial transactions in a year to the Internal Revenue Service (“IRS”). However, despite other sources claiming that the IRS is taxing these transactions, the reporting requirement simply provides the IRS with information that can be used to enforce existing rules (i.e., the requirement that taxpayers provide 1099s to individuals or businesses where the taxpayer paid over $600 in the taxable year).

In response to this new requirement, taxpayers should take care to correctly tag transactions, if possible, in their payment app. This is especially important when dealing with personal transactions on these platforms, as failure to do so could cause the transactions to be reported to the IRS as business related transactions.

While the impact of the new reporting will be minimal, it is causing disproportional concern to taxpayers because of inaccurate or misleading articles on the internet.

If you have any questions or concerns about this or any other legal or tax related issue, contact WEGNER LAW PLLC today at (239) 449-9200 or by email at cwegner@wegnerlawfirm.com.

Senators attempt to delay Wayfair

A small number of Senators have put forth a bill that would prohibit states from imposing sales tax on out of state retailers with less than $10 million in annual sales until the states can agree on how best to implement the new taxes.

North Dakota v. Wayfair, Inc. is the recent Supreme Court case holding that states can impose sales tax on out of state retailers. This proposed legislation is one of the many different ways that federal and state governments are dealing with this drastic change.

To learn more about Wegner Law PLLC or contact us with questions, visit www.wegnerlawfirm.com or call P. Christopher Wegner at 239 449 9200 today. You may also email Chris at cwegner@wegnerlawfirm.com for more information.