Starting January 1, 2022, the IRS has a new form, the 1099-K which you may receive if you accept more than $600 from payment processors like Zelle, Venmo, PayPal and others. The IRS wants to match your 1099-K to the income that you report on your 2022 tax return. The problem is you may be simply doing a convenience transaction for a roommate for example. Imagine that your roommate transfers half of their rent to you ($750) and you pay the full rent ($1,500) to the landlord. Did you really have $750 in income? According to the form 1099-K you do. If you do transactions like this, then you will be having to explain that you used that $750 to pay your roommates rent. Complications that you do not need.
A better way to do it is to have your roommate send $750 to the landlord and you send $750 to the landlord, then you do not have this phantom $750 in 1099-K income problem to deal with.
Here is a link to a 1099-K form with instructions.
https://www.irs.gov/forms-pubs/about-form-1099-k
No comments:
Post a Comment