People who are paid for goods and services through apps like Venmo, PayPal or CashApp, or platforms like Etsy and Airbnb just got a 1-year reprieve by the IRS. The IRS opted to delay the implementation of a rule change affecting people using such apps for their business transactions.
The rule change will require third-party payment platforms to issue a 1099-K to the IRS and the app user for business transaction payments if they total more than $600 over the course of the year. A business transaction that is taxable is defined as a payment for a good or service, including tips. The new rule doesn’t impose any additional taxes, nor does it change the taxpayers’ obligation to report all taxable income to the IRS.
For one more year, under the present rules, those platforms only have to issue a 1099-K to those who engaged in more than 200 business transactions for which they received total payments of more than $20,000 in a year.