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As part of the American Rescue Plan Act, the Internal Revenue Service (IRS) has announced that all transactions over USD 600 made through payment apps must be reported.
The new bill went into effective starting 1 January 2022 and extends to all mobile money apps like Venmo, Paypal, Cash App, and others. Previously, mobile payment apps had to report to the IRS accounts with 200 commercial transactions per year that exceeded USD 20,000 in total value.
The companies must file and furnish a Form 1099-K but the tax-reporting change only applies to charges for commercial goods and services and does not include personal charges to friends and family, splitting bills or selling a personal item at a loss.
The IRS has set up a webpage to make it easier for residents to navigate the new filing requirement.
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