Peer-to-peer (P2P) payment platforms like PayPal, Venmo, or Cash App are revolutionizing the way we handle money. With a few taps on your phone, you can effortlessly transfer funds to friends or pay for services. It is almost like having a personal banking branch in your pocket.
However, with great convenience comes great responsibility, especially when the IRS is involved. Starting in 2023, if you receive over $600 related to payments for business transactions within the year via these P2P platforms, expect a 1099-K form in the mail. This form is not just a friendly hello from the government; it’s a record of the money you have received that year, and the IRS gets a copy, too. Ignoring this form is not recommended unless you are a fan of financial headaches. So, as you enjoy the simplicity of digital transactions, remember to keep an eye out for that 1099-K. It is always better to be prepared when the taxman comes knocking.
Source: IRS.gov
