Entrepreneurs in Corpus Christi may have complicated tax season

Instead, tax year 2022 will be a transitional period for the implementation guidelines.

CORPUS CHRISTI, Texas – The IRS recently announced a delay in reporting thresholds for third-party payment apps, according to a report by forbes.

Instead, tax year 2022 will be a transitional period for the implementation guidelines. The period is designed to help taxpayers familiarize themselves with the new guidelines to better prepare them for the 2023 tax year.

Anyone with more than 200 business transactions or an income of at least $20,000 from third-party apps was always subject to tax cash appbut with the changes The American Bailout Act In 2021, this reporting threshold will now be significantly lower.

Now taxpayers using PayPal, Venmo, and Cash App must submit 1099-K forms for transactions totaling $600.

“The biggest thing is that they’re basically going to go against income, against undeclared income, which is what they’re going after now,” said Stacy Trevino, owner of Danny’s Income Tax Service

Trevino said that while contract workers are already required to report their income to the IRS, the focus on payment apps makes the process more granular.

“That’s huge because it used to be over $20,000, now it’s $600,” she said. “So it’s affecting regular Americans, hairdressers, retailers — it’s affecting them all.”

Payment apps send a 1099-K form to users who have earned more than $600 from their respective app. Trevino said residents can also receive the form whether they used it for business purposes or just to reimburse others. Even a single $600 transaction can trigger a 1099-K, according to the IRS.

“If you refund your roommate your share of the rent, it’s not taxable,” she said.

Because the income guidelines for payment apps differ from previous years, Trevino said residents may need to apply for a fix with their respective app where payments actually constitute a business sale.

RELATED: No, Not All $600 Payment App Transactions Must Be Reported to the IRS

“If you invite a friend to lunch and they pay you back, it’s not taxable,” she said. “It’s not going to affect anyone using it for refunds, or it shouldn’t. The problem is that this is the first year this has happened. So we have to rely on Cash App, Venmo, to know what they are doing.”

For Sleight productions‘ owner Jake Gonzales makes most of his income from paid apps. Gonzales said the apps not only make it easier to collect payments, but also help him keep digital records.

“All the time,” he said. “I use Cash App, Venmo, PayPal all the time, especially because that’s how I send my invoices.”

Gonzales told 3NEWS that filing his taxes before the threshold was lowered was already difficult. Now he says he needs to be more specific in reporting his annual income.

“In that sense, I just want to be a lot more careful, because when you’re filing your taxes as a contractor — you already have to be very specific about how you’re filing them,” he said.

Trevino warns residents that failing to accurately state your income can have serious consequences, which may include additional penalties and interest charges.

“You’re going to get a letter from the IRS saying you owe your taxes,” Trevino said. “They’re going to charge penalties and interest, so it’s not going to go away, it’s only going to get worse.”

While residents have some breathing room, Trevino said if they have concerns about filing their taxes, they should call a professional and make an appointment.

More from 3News on KIIITV.com:

Subscribe to our YouTube channel for your daily news and exclusive in-depth interviews.

Do you have a news tip? Say 3!

Enter your name and contact information below or email tell3@kiiitv.com so we can get back to you regarding your story if we have any questions or need more information. We know that some stories are sensitive in nature. Let us know if you wish to remain anonymous.

If you don’t have a photo/video to submit, simply click OK to skip this prompt.


https://www.kvue.com/article/news/local/got-a-side-hustle-or-own-a-business-your-taxes/503-a5cefe92-1f32-44cf-80be-80e20a25b0cd Entrepreneurs in Corpus Christi may have complicated tax season

Laura Coffey

World Time Todays is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – admin@worldtimetodays.com. The content will be deleted within 24 hours.

Related Articles

Back to top button