Thinking About Taking Digital Payments?

Ellen C. Wells

If you’re considering accepting digital payments via third-party providers such as Zelle, Venmo and the like, here’s some news you should know. The IRS will require digital payment services to report income from payment for goods and services of more than $600 over the span of 2022.

If you’re a good doobie, you’ve been reporting income received via these third-party providers anyway. But starting this year, these providers will be required by the IRS to issue 1099-K forms to their clients who have accepted more than $600. For all those entrepreneurs, freelancers and contract workers who have previously accepted payments from customers and clients and perhaps didn’t keep track of it during tax time, these 1099-K forms are just the IRS’s friendly way of helping you stay on top of your income.

But how will those digital providers know that $20 payment was for yoga class and not for going Dutch on dinner with your pal? These providers will be rolling out an extra form to their users asking them to identify the nature of their expenditure during the payment process. GP