#IRS tax form delays

[pandor-pandorkful]

Ebay is fighting the tax reporting change (the threshold lowering from $20k to $600) and I guess is partially responsible for helping delay the implementation by a year. They've got an autoform up you can fill out to pester your reps about it in the link above. I filled it out, but my reps are scum so idk how much my input will do.... fingers crossed tho.

[saintmeghanmarkle]

DM EXCLUSIVE Mystery of Harry and Meghan's tax return: Archewell Foundation promised to declare $4MILLION charity donation... but has yet to post latest records publicly by u/Von_und_zu_

DM EXCLUSIVE Mystery of Harry and Meghan's tax return: Archewell Foundation promised to declare $4MILLION charity donation... but has yet to post latest records publicly Hmmm The charity raised eyebrows when MailOnline reported that $4million had not been declared in Archewell's last tax return, which is called a 990 form, with sources close to the Sussexes insisting that it would appear in the following year’s filing.However, while the Mail understands the charity filed the new 990 form to the IRS last week on November 15, there is no sign of the tax return on Archewell's website.Instead, MailOnline understands Archewell has promised it will be publicly released up to three weeks after the IRS's deadline in the week starting with December 2.The decision has been met with surprise. A leading tax expert said that while delaying the release until the IRS has processed the return was 'not uncommon' for many charities, given Archewell's high profile and the publicity over the undeclared $4million, in this case it was puzzling.https://ift.tt/2DAv1K5 post link: https://ift.tt/CUsoKyB author: Von_und_zu_ submitted: November 23, 2024 at 12:51PM via SaintMeghanMarkle on Reddit disclaimer: all views + opinions expressed by the author of this post, as well as any comments and reblogs, are solely the author's own; they do not necessarily reflect the views of the administrator of this Tumblr blog. For entertainment only.

[finn-m-corvex]

The FAFSA has been delayed to the 31st of December and I think it might be quicker to overcome my misery by just bursting into flames.

And the due date hasn't been extended by the colleges so guess whose spending his birthday doing tax forms and hoping to God the IRS doesn't incarcerate me.

[parasite-core]

My Pathfinder group took a week off so instead some of us hung out with some other friends and played a Lasers and Feelings hack called the Fight Before Christmas (we rolled dice to decide what we’d play and it landed on that so yay Christmas in June 😂)

Our characters were two priests—one a millionaire tv evangelist and one an alcoholic barely scraping by—and two thieves—an androgynous hacker e-boy and an elf sent to jail for breaking and entering who murdered 3 men while in the slammer before breaking out. The evangelist, Nick, wanted to take down Santa for tainting the true meaning of Christmas and turning people away from The Lord, the e-boy, Blitzen, wanted to free Santa’s reindeer from their oppression, the jail elf, Sticky-fingers, wanted to murder Santa for revenge for getting him sent to jail in the first place, and the drunken priest, Frank, just came to the bar we were all at because he was offered a free drink to attend.

We were contacted by the Major from Phineas and Ferb, who informed us that Santa had taken over Anchorage, Alaska and was holed up in a radio station there, guarded by his elite squad of gingerbread ninjas and the IRS, who were legally given the right to weaponize by the 49th president and were the second most dangerous organization in the United States after the military. The IRS was after all of us for various forms of tax evasion and fraud, so they had teamed up with Santa to try to take us down. The Major told us that if we succeeded in taking down the big man in red, we would be pardoned of all crimes including the aforementioned tax evasion and it would be wiped from our records.

Nick told the Major we had a ride to Anchorage, and then led us to his private jet, The Arc. While we entered, Nick tried to catch up with Frank, who was trying to slip away and wanted nothing to do with this. Nick put an arm over his shoulder and steered him into the jet, saying he’d be doing the Lord’s work. Frank seemed to be of the opinion that Nick was more out for himself than for the good Lord, and that he was deceiving his flock. Nick was of the opinion that his flock simply cared for his well-being, and were generous souls who gave in the name of the Lord. Frank deeply judged Nick for using church money for himself instead of for the church, while Nick judged Frank for his alcoholism.

While those two were….getting to know each other…Sticky-fingers scouted out the most expensive drink available at Nick’s personal bar, while Blitzen went to the bathroom and started stealing the solid gold soap plates and parts of the sink.

As they neared Anchorage, the pilot/butler informed us that there were anti-aircraft missiles coming our way. Nick told the pilot/butler to deploy the turrets to counter them. Nick took control of one of the turrets personally. Blitzen hacked the missiles’ navigation system and made most of them return to sender, while Nick took out the last one with the turret. While this was happening, Sticky-fingers stole the most expensive alcohol at the bar, and found an unmanned drone under the bar which he also shoved into his bag. Frank had a panic attack at us nearly dying.

We landed in Anchorage—with no regard for if it was a legal spot to park a jet, because if it got towed Nick could just buy another jet.

We had an elf on the inside who ran an escape room, so we went to talk to him to get some intel. Frank drunkenly solved the escape room puzzle and revealed the door to meet with Elfo. Sticky-fingers greeted Elfo as an old friend, but Frank stopped him, noting that something was wrong. Elfo was standing on a bomb! It turned out that Santa’s goons had gotten to Elfo first, and if he gave us any information on Santa’s operation…boom. We asked Blitzen if he could disable the bomb, as the tech guy. Blitzen determined that he could delay the timer enough for us to switch out Elfo for something else of equal weight (Elfo told us he weighted 30-70 elf pounds, which Sticky-fingers confirmed was a very average elf weight). Blitzen hacked the bomb’s timer and we swapped Elfo for a weight, and the bomb didn’t go off. Elfo told us about how anyone who spoke out against Santa in town got sent to Holly Jolly Jail, which Sticky-fingers warned was a terrible place to go—those who come back from it never come back the same. He also warned us about Santa’s eldritch power, which would throw presents around the room. And he had a bio-mechanical suit which made him invulnerable, and which was unhackable.

We decided the best action would be to try to seduce him out of the suit, which would be Blitzen’s job.

We knew that Santa’s first line of defense were the gingerbread ninjas, so we made a plan to buy a ton of milk from the local convenience store and soak them with it so they’d crumble apart.

At the store we split up. Nick went to buy milk as planned—and went to speak to the manager to buy every single milk product in the store plus a truck to carry it all with. Blitzen went to the firearms wall, and stole as many guns and as much ammo as he could shove into his bag. Sticky-fingers stole a large bottle of “milk”. As he went to leave he ran into the head of the Gingerbread Ninjas, who went to attack him, but he slipped on some milk on the floor and crumpled to pieces. Sticky-fingers snapped off his head and started munching on it as he left the store. Frank grabbed a six pack of beer to buy, then realized he had no cash on him. He begged the cashier to let him just take one can, and he was so pathetic looking that the cashier let him take the entire six pack because she figured he needed it.

We met outside the store, and Nick told us to get into the truck. We drove towards the radio station. On our first pass, Blitzen took the “milk” from Sticky-fingers and filled a high powered water gun with it. For an unknown reason the tip started steaming. As we passed the gingerbread ninjas, Blitzen sprayed the “milk” on them, which turned out to be a highly reactive acid, which burned through five gingerbread ninjas.

Nick planned to topple the truck to drown the last three gingerbread ninjas in milk, but Frank begged him to let him talk to them first and try to resolve this peacefully. Nick argued that the gingerbread ninjas were merely golems with no souls made by Santa and wouldn’t go to heaven, so there was no need to extend mercy to them. Frank was horrified by this, asking if Nick would kick a puppy just because it wasn’t a person. Sticky-fingers argued that the Gingerbread ninjas were Santa’s loyal subjects and would likely kill Frank on sight. Frank told them to just let him try. Nick told Frank he had ten minutes, if he hadn’t convinced them by then, Nick was driving the truck over them whether Frank was out of the way or not.

Frank went to the three remaining Gingerbread Ninjas, and tried to convince them that he just wanted to talk to Santa, and that they could all come together and find a peaceful solution to this. No more Gingerbread blood had to be spilled this day.

The Gingerbread Ninjas saw the light of god and repented, laying down their arms and going with Frank to leave the Radio Tower behind.

The door opened, revealing the IRS, armed to the teeth. Sticky-fingers told Nick to floor it. He had a plan. As they approached the building, he pulled out the expensive liquor and made it into a Molotov Cocktail. With a yell of “forgive me fathers for I am about to sin” he hurled the Molotov at the IRS. They burned, then melted into a silver puddle—because all members of the IRS are terminators.

Nick continued hurtling towards the radio tower in the milk truck, and he told Sticky-fingers and Blitzen to get out. After the leapt to safety, he purposely tipped the truck over then leapt out himself. The truck crashed, the milk spilling across the fire Sticky-fingers had started, dousing the flames.

All that was left was to face the big man in red himself.

We entered the final room, with big letters above it that said ‘boss fight ahead save now’. Inside was an absolutely ripped man with a bald head and white beard. He laughed his holly jolly laugh and asked who was about to be on his naughty list. Blitzen volunteered eagerly, then showed off his feet, which he’d put into clear high heels. Because our intel suggested that Santa was into feet.

Sticky-fingers used the drone to shine a light on Blitzen and his feet, drawing all attention on him. Frank knelt down and washed one of Blitzen’s feet with ‘holy water’ (vodka), and Nick gave Blitzen a vial of oil to oil their feet up and make them shine.

The children who Santa was originally going to use as meat shields began to come forward with his biomechanical suit, but Santa stopped them and said that, perhaps, this could be solved without violence.

The scene faded to black, and three months later Nick, Frank, and Sticky-fingers are attending Santa and Blitzen’s wedding. Santa pulled his men out of Anchorage, no longer occupying the town, so we completed the Major’s request and our criminal records have all been wiped clean. And Santa gave each of us a gift. For Sticky-fingers—who is very confused how he got here since his goal was to kill Santa not help his new friend shack up with him—he received a state of the art rocket launcher. For Frank, he received a few thousand dollars and an extension on his rent. For Nick, he received a letter from his estranged wife, looking to attempt to reconcile. And for Blitzen, he received a double ended dildo.

Nick would never tell anyone, especially not Frank, but he had to admit that maybe Frank had been right all along.

And as Santa and Blitzen flew off into the sunset in Santa’s sleigh, the sound of a rocket launcher locking on could be heard.

[third-new]

The IRS is launching a new tax rule for Venmo, PayPal and Cashapp. What you need to know

Listen up, freelancers. This tax season, you may receive a 1099-K tax form If you earned more than $5,000 through a third-party payment app, such as PayPal, Venmo, or Cash App. The IRS initially laid out a plan to implement new reporting requirements for anyone who earns more than $600 through pay applications in 2023. After two years of delays, the tax agency decided to Implement phase…

[newtras]

The IRS is launching a new tax rule for Venmo, PayPal and Cashapp. What you need to know

Listen up, freelancers. This tax season, you may receive a 1099-K tax form If you earned more than $5,000 through a third-party payment app, such as PayPal, Venmo, or Cash App. The IRS initially laid out a plan to implement new reporting requirements for anyone who earns more than $600 through pay applications in 2023. After two years of delays, the tax agency decided to Implement phase…

[satrthere]

The IRS is launching a new tax rule for Venmo, PayPal and Cashapp. What you need to know

Listen up, freelancers. This tax season, you may receive a 1099-K tax form If you earned more than $5,000 through a third-party payment app, such as PayPal, Venmo, or Cash App. The IRS initially laid out a plan to implement new reporting requirements for anyone who earns more than $600 through pay applications in 2023. After two years of delays, the tax agency decided to Implement phase…

[top4allo]

The IRS is launching a new tax rule for Venmo, Paypal and CashApp. What you need to know

Listen up, Freelancers. This tax season, you can buy 1099-K tax form If you spend more than $5,000 with a third-party payment app like PayPal, Venmo, or the Cash app. The IRS initially laid out a plan to implement new reporting requirements for anyone who earns more than $600 through payment apps in 2023. After two years of delays, the tax authority made a decision apply a gradual rollRaising the…

[lodestartaxes]

Avoid These Common Tax Preparation Mistakes

Tax season can be overwhelming, but avoiding common pitfalls can save you money, reduce stress, and prevent costly penalties. Whether you’re filing as an individual or for your business, here are the most frequent tax preparation mistakes and how to steer clear of them.

1. Failing to Keep Accurate Records

Disorganized or incomplete financial records can lead to errors, missed deductions, and filing delays.

Solution: Use reliable accounting software or apps to track income, expenses, and deductions year-round. Organize your receipts and documents for easy access. For personalized tax planning support, check out Lodestar Tax Planning Services.

2. Overlooking Deductions and Credits

Missing out on eligible deductions and credits can significantly increase your tax liability.

Solution: Familiarize yourself with deductions like education expenses, home office costs, and retirement contributions. A tax professional can ensure you claim all benefits. Learn more at Lodestar Tax Preparation Services.

3. Incorrect Income Reporting

Failing to report all income sources, including freelance or investment earnings, can lead to penalties.

Solution: Gather all income-related documents, such as W-2s and 1099s, before filing. Double-check your entries to ensure accuracy.

4. Missing Filing Deadlines

Late tax filings result in penalties and interest, increasing your financial burden.

Solution: Mark tax deadlines on your calendar and set reminders. If you need more time, file for an extension, but remember to pay any taxes owed by the original deadline.

5. Ignoring Tax Law Updates

Tax laws change frequently, and staying unaware can lead to errors or missed opportunities.

Solution: Stay informed about updates by consulting trusted sources or professionals. For expert advice on adapting to tax law changes, visit Lodestar Tax Planning Excellence.

6. Choosing the Wrong Filing Status

Selecting an incorrect filing status can result in higher taxes or lost benefits.

Solution: Review the eligibility requirements for each filing status. Choose the one that best fits your circumstances, such as single, married filing jointly, or head of household.

7. Skipping a Final Review

Errors in calculations or typos can delay your refund or cause complications with the IRS.

Solution: Carefully review your tax return for accuracy before submitting it. Verify calculations, personal information, and deductions.

8. Not Seeking Professional Assistance

Relying solely on tax software or self-preparation can result in mistakes, especially with complex returns.

Solution: Consider hiring a tax professional for expert guidance and accurate filing. Explore how Lodestar can help with complex cases at Lodestar Tax IRS Resolutions Services.

9. Overlooking State and Local Taxes

Federal taxes often take center stage, but neglecting state and local obligations can lead to non-compliance.

Solution: Familiarize yourself with state and local tax requirements, deadlines, and forms. Ensure compliance at all levels.

10. Missing Retirement Contributions

Failing to contribute to retirement accounts can mean losing valuable tax benefits.

Solution: Maximize contributions to IRAs or 401(k)s before the tax deadline to reduce taxable income and grow long-term savings.

Conclusion

Avoiding these common tax preparation mistakes can simplify your filing process, reduce stress, and maximize your financial benefits. Staying organized, understanding tax laws, and seeking professional assistance when needed can make tax season a breeze.

For expert guidance and support, partner with Lodestar Taxes. Their experienced team can help you avoid errors, maximize deductions, and stay compliant. Visit Lodestar Tax Planning Services to get started today.

[qwuilleran]

I spent an hour on the phone yesterday with the IRS trying to get the $10 Grand they stole from me two years ago because of an error on their part (apparently they still have people manually entering tax forms into their system). After two insistences that they did not owe me anything b/c it was too long ago, I dropped the "I'm going to be soo American and sue the IRS" trump card. That got me to the stage where they admit they're understaffed and their systems go down for two months out of the year (which still gives them 22 months to work with but ¯\_ (ツ)_/¯ ). So all-willing, I'll have check in hand by February. If not, I will make a point to point out their use of the 4 Ds by continuing to delay and deny what is owed. I was this close to breaking that out if they'd stalled again. And the lawyer will come out.

[taxnetfinancial-blog]

Maximize Your Tax Refund: The Ins and Outs of Refund Advance Options

Tax season can feel like a whirlwind of forms, calculations, and deadlines, but for many, it’s also an opportunity to receive a much-anticipated tax refund. While waiting for your refund to process can take weeks, refund advance options offer a way to access your money quickly. These financial tools can be a lifeline for those who need cash for immediate expenses, but understanding how they work is crucial to maximizing their benefits and avoiding pitfalls.

In this comprehensive guide, we’ll explore the ins and outs of refund advance options, including what they are, how they work, and tips for ensuring you make the most of your tax season finances.

A tax refund advance is a short-term loan offered by tax preparation companies or financial institutions based on the amount of your anticipated tax refund. These loans provide access to your refund quickly, often within 24 to 48 hours, instead of waiting for the IRS to process and deposit your refund.

Refund advance loans are typically repaid automatically when your refund arrives. They can range from a few hundred dollars to several thousand, depending on your expected refund amount.

How Do Refund Advances Work?

The process of securing a refund advance usually involves these steps:

File Your Taxes To qualify for a refund advance, you must file your taxes with the company offering the loan. This can be done online or in person.

Application and Approval Once your refund is calculated, you can apply for a refund advance. The lender will assess your application, which may involve a soft credit check.

Receive the Funds If approved, the advance is typically disbursed via direct deposit, prepaid debit card, or check. Some companies offer same-day funding.

Repayment When your refund is issued by the IRS, the loan amount is deducted automatically. You’ll receive any remaining refund balance.

Types of Refund Advance Options

Understanding the types of refund advances can help you choose the best option for your needs. Here are the most common categories:

1. Fee-Free Refund Advances

Some tax preparation services offer interest-free loans as a perk to attract customers. These loans typically have no hidden fees or interest, but you’ll need to use their tax filing service, which may come with a cost.

2. Interest-Bearing Refund Advances

Other refund advances may charge interest, which can accumulate daily until the loan is repaid. These loans can be costly if your refund is delayed, so it’s essential to read the terms carefully.

3. Prepaid Card Advances

Some companies disburse funds through prepaid cards, which may come with activation or transaction fees. These cards can be convenient for immediate spending but may reduce the amount you ultimately receive.

The Benefits of Refund Advances

1. Immediate Access to Funds

For individuals facing urgent financial needs, such as medical bills or car repairs, a refund advance provides a quick solution.

2. No Credit Impact

Most refund advance options involve soft credit checks, which do not affect your credit score. This makes them accessible to individuals with poor or limited credit history.

3. Streamlined Process

Since refund advances are tied to tax preparation services, the process is often seamless. You file your taxes and apply for the loan in one step.

4. Reduced Stress During Tax Season

Knowing you can access your refund early can alleviate financial stress, especially if you're counting on that money to cover essential expenses.

Potential Drawbacks of Refund Advances

While refund advances can be helpful, they aren’t without risks. Here are some potential downsides:

1. Costs and Fees

If you opt for an interest-bearing loan or a prepaid card with fees, a significant portion of your refund could be lost to costs.

2. Limited Availability

Refund advances are only available through certain tax preparers, limiting your choice of services.

3. Dependency on Refund Timing

If your refund is delayed by the IRS due to audits or processing issues, you may face penalties or additional fees on interest-bearing loans.

4. Eligibility Requirements

Not everyone qualifies for a refund advance. Factors like your refund amount, tax situation, and creditworthiness may affect eligibility.

Who Should Consider a Refund Advance?

A refund advance might be a good option if you:

Need immediate cash for essential expenses.

Have a straightforward tax situation with a guaranteed refund.

File with a tax preparer offering no-cost or low-cost refund advances.

However, if you can wait for your refund, you may avoid the risks and costs associated with these loans.

Tips for Maximizing Your Tax Refund and Refund Advance Options

1. Choose a Reputable Tax Preparer

Work with established companies that offer transparent terms for refund advances. Avoid predatory lenders or companies with hidden fees.

2. Understand the Fine Print

Read the loan terms carefully, including fees, interest rates, and repayment conditions. Knowing the details upfront can save you from unpleasant surprises.

3. Budget Wisely

Use your refund advance for necessary expenses only. Treat it as a short-term solution rather than a windfall.

4. File Your Taxes Early

The sooner you file your taxes, the sooner you can apply for a refund advance. Early filing also reduces the risk of identity theft and delays.

5. Track Your Refund

Use the IRS “Where’s My Refund?” tool to stay updated on the status of your refund and ensure timely repayment of the advance.

Alternatives to Refund Advances

If a refund advance isn’t the right fit for you, consider these alternatives:

1. Personal Loans

If you need immediate cash and have good credit, a personal loan may offer lower interest rates and more flexible repayment terms.

2. Emergency Savings

Tapping into an emergency fund can provide immediate relief without the need for loans or interest payments.

3. IRS Refund Timing

The IRS typically issues refunds within 21 days of filing. Planning your finances around this timeline can eliminate the need for advances.

Common Misconceptions About Refund Advances

Myth 1: Refund Advances Are Free Money

Refund advances are loans, not free cash. They must be repaid with your refund, often with added fees or interest.

Myth 2: Everyone Qualifies for a Refund Advance

Eligibility depends on factors like your expected refund amount and the lender’s requirements.

Myth 3: You’ll Lose Your Entire Refund

Only the amount of the advance is deducted from your refund. Any remaining balance is issued to you.

Tax refund advances can be a valuable tool for those needing quick access to their refunds, but they’re not a one-size-fits-all solution. By understanding how these loans work, weighing the benefits against the costs, and considering your financial situation, you can make an informed decision that maximizes your tax season finances.

Approach refund advances with a clear plan and prioritize using your refund to improve your overall financial health. Whether it’s paying off debt, building savings, or covering essential expenses, make your tax refund work for you. After all, your financial future is worth the investment.

[lunaamorris]

Business Tax Preparation: What You Need To Know For Year-End Closing

As the year comes to a close, business owners must begin preparing for year-end tax filing. Year-end tax preparation is crucial to ensure accurate reporting, minimize tax liabilities, and set the business up for success in the new year. Here's what you need to know about business tax preparation for year-end closing.

Review Financial Records

The first step in year-end tax preparation is reviewing your business’s financial records for the year. Ensure that all income, expenses, and transactions have been accurately recorded. This includes reviewing sales receipts, invoices, payroll records, bank statements, and credit card statements. Organizing your financial documents is essential for identifying discrepancies and ensuring everything is accounted for before tax filing.

Reconcile Accounts

Account reconciliation is a critical part of year-end closing. Businesses should reconcile their bank and credit card accounts to ensure that the records match their financial statements. Discrepancies, such as missed transactions or incorrect entries, can lead to inaccurate tax filings. It's important to address any issues now, as these could result in delayed tax filings or even audits if not corrected in time.

Track All Business Expenses

Maximizing tax deductions is a key part of minimizing your business’s tax liability. Make sure you have accurate records of all business-related expenses, including office supplies, equipment, business travel, utilities, and employee wages. Review whether you are eligible for deductions such as the home office deduction, depreciation of assets, or business mileage. Accurate tracking of expenses throughout the year ensures that nothing is overlooked, and you can maximize deductions to reduce your taxable income.

Plan for Year-End Bonuses and Payroll

Many businesses choose to issue year-end bonuses to employees, which are deductible as business expenses. If you plan to offer bonuses, ensure they are properly accounted for in your year-end payroll. Additionally, review employee benefits and ensure all withholding is up to date. Businesses should also verify that all payroll taxes have been paid for the year and prepare any required payroll tax forms (e.g., W-2, W-3, or 1099 forms) to avoid penalties.

Check for Tax Credits and Incentives

Throughout the year, businesses may become eligible for various tax credits or incentives, such as the Research & Development (R&D) Tax Credit, energy-efficient business deductions, or credits for hiring employees from certain target groups. Before the year ends, make sure you're aware of any tax credits you might qualify for. These credits can directly reduce the amount of taxes owed, so identifying them early is crucial.

Evaluate Estimated Tax Payments

Throughout the year, many businesses are required to make estimated quarterly tax payments to the IRS. As part of year-end preparation, review whether these payments have been made correctly and on time. If your business has underpaid its estimated taxes, you may need to make an additional payment to avoid penalties. On the other hand, if overpaid, you may be eligible for a refund or credit toward next year’s taxes.

Consult with a Tax Professional

Tax laws and regulations are complex and can change from year to year. It's highly recommended to consult with a tax professional to ensure that your business is following the latest guidelines and taking advantage of all available deductions and credits. A qualified tax advisor can help you navigate year-end preparation, suggest tax-saving strategies, and help prevent errors in your filings.

Prepare for the Upcoming Year

In addition to closing out the current year, year-end tax preparation provides an opportunity to plan for the upcoming year. Meet with your accountant or tax preparer to review your business’s financial outlook and make any necessary adjustments to your tax strategy. This may include adjusting withholding rates, increasing contributions to retirement plans, or planning for expected capital expenditures.

Conclusion

Year-end business tax prep is a crucial task that requires careful attention to detail and timely action. By reviewing financial records, reconciling accounts, tracking business expenses, and consulting with a tax professional, you can ensure your business is well-prepared for tax filing. Taking the time to properly close out the year will not only help reduce your tax liability but also set your business up for success in the upcoming year.

[eyashadow]

This tax season, freelancers and side hustlers may receive an unfamiliar form in the mail -- IRS tax form 1099-K. After two years of delays, the IRS is finally implementing a tax reporting change, which requires third-party payment apps like PayPal, Venmo and Cash App to issue a 1099-K for anyone who earns self-employment income over a certain amount through these apps each year. For last year, if you earned $5,000 or more on a third-party app, you can expect to receive this tax form. This story is part of Taxes 2025, CNET's coverage of the best tax software, tax tips and everything else you need to file your return and track your refund. If you own your own business, freelance or have a side hustle, you're likely no stranger to 1099 tax forms. You may have received a 1099-NEC (the IRS's nonemployee compensation form) from companies you've previously worked with. A 1099-K is similar, but instead of the company you work with issuing the form, you'll receive a tax form from the payment platform.This isn't a new tax rule-you're required to report your freelance or self-employment income whether you receive a tax form or not. It's a tax reporting change that switches the reporting requirement to payment apps so the IRS can keep better tabs on income earnings that might otherwise go unreported."The taxation and tax treatment requirements for taxpayers has not changed," said Mark Steber, chief tax information officer for Jackson Hewitt. "This taxable income has always been considered by the IRS to be taxable and should be reported on a tax return." CNETAlthough the IRS will be able to keep a closer eye on freelance earnings, the tax agency isn't interested in the money you're sending to your family and friends. If you pay your roommate your portion of rent through Venmo, for example, these transactions are not considered taxable.Here's everything you need to know about the new 1099-K tax reporting change.Read more: Updated IRS Federal Tax Brackets Could Boost Your Paycheck Next Year. Here's WhyWhat is a 1099-K?A 1099-K is a tax form that reports income received via a third-party payment platform from a non-permanent job, such as a side hustle, freelance agreement or contractor position where taxes are not withheld. The IRS currently requires any third-party payment apps like Cash App and Venmo to send a 1099-K to the IRS and individuals if they earned more than $20,000 in commercial payments across more than 200 transactions. If you regularly make over $20,000 in freelance income, are paid through Venmo, and receive more than 200 transactions in payments, you may have received a 1099-K tax form before.What is the IRS's new 1099-K rule?Under new reporting requirements first announced in the American Rescue Plan, third-party payment apps will eventually be required to report earnings over $600 to the IRS. "Prior to 2024, the earnings threshold was $20,000 and 200 transactions to receive a 1099-K tax document," said Steber.For your 2024 taxes (which you'll file in 2025), the IRS is planning a phased rollout, requiring payment apps to report freelancer and business owner earnings over $5,000 instead of $600. The hope is that raising the threshold will reduce the risk of inaccuracies while also giving the agency and payment apps more time to work toward the eventual $600 minimum.Why was the third-party payment app tax rule delayed?Originally set to kick off at the beginning of 2022, the IRS planned to implement a new reporting rule that would require third-party payment apps, like PayPal, Venmo or Cash App to report income of over $600 or more per year to the tax agency. The IRS delayed this new reporting requirement in 2022 and again in 2023.Why? Distinguishing between taxable and nontaxable transactions through third-party apps isn't always easy. For example, money your roommate sends you through Venmo for dinner is not taxable, but money received for a graphic design project might be. The delayed rollout gave payment platforms more time to prepare."We spent many months gathering feedback from third-party groups and others, and it became increasingly clear we need additional time to effectively implement the new reporting requirements," said IRS Commissioner Danny Werfel in a November 2023 statement.Which payment apps are required to send 1099-Ks? All third-party payment apps where freelancers and business owners receive income are required to begin reporting transactions involving you to the IRS in 2024. Some popular payment apps include PayPal, Venmo and Cash App. Other platforms freelancers may use, such as Fivver or Upwork, are also on the hook to begin reporting payments that freelancers receive throughout the year. If you earn income through payment apps, it's a good idea to set up separate PayPal, Cash App or Venmo accounts for your professional transactions. This could prevent nontaxable charges -- money sent from family or friends -- from being included on your 1099-K in error.Zelle users will not receive a 1099-KThere's one popular payment app that's exempt from the 1099-K rule. Payment transfer service Zelle will not be issuing 1099-Ks, regardless of whether you receive business funds through the service or not. That's because Zelle doesn't hold your funds in an account, like PayPal, Venmo or Cash App do, and instead is used as a way to transfer money between bank accounts. If you are paid for your freelance or small business services through Zelle, it's your responsibility to report all income on Schedule C of your tax return.Is the IRS taxing money you send to family or friends?No. Rumors have circulated that the IRS was cracking down on money sent to family and friends through third-party payment apps, but that isn't true. Personal transactions involving gifts, favors or reimbursements are not considered taxable. Some examples of nontaxable transactions include: Money received from a family member as a holiday or birthday giftMoney received from a friend covering their portion of a restaurant billMoney received from your roommate or partner for their share of the rent and utilitiesPayments that will be reported on a 1099-K must be flagged as payments for goods or services from the vendor. When you select "sending money to family or friends," it won't appear on your tax form. In other words, that money from your roommate for her half of the restaurant bill is safe."This is only for self-employment income," said Steber. "You should not receive a 1099-K for personal transactions but be aware that some platforms could accidentally include personal transactions in the 1099-K and that will need to be corrected on the users tax return."Read more: Election 2024: Where Each Presidential Candidate Stands on the Child Tax CreditWill you owe taxes if you sell items on Facebook Marketplace or Poshmark?If you sell personal items for less than you paid for them and collect the money via third-party payment apps, these changes won't affect you. For example, if you buy a couch for your home for $500 and later sell it on Facebook Marketplace for $200, you won't owe taxes on the sale because it's a personal item you've sold at a loss. You may be required to show documentation of the original purchase to prove that you sold the item at a loss.If you have a side hustle where you buy items and resell them for a profit via PayPal or another digital payment app, then earnings over $5,000 will be considered taxable and reported to the IRS in 2024. Make sure to keep a good record of your purchases and online transactions to avoid paying taxes on any nontaxable income -- and when in doubt, contact a tax professional for help.What should you do to prepare for this reporting change?Any payment apps you use may ask you to confirm your tax information, such as your employer identification number, individual tax identification number or Social Security number. If you own a business, you most likely have an EIN, but if you're a sole proprietor, individual freelancer or gig worker, you'll provide an ITIN or SSN. In some cases, receiving a 1099-K may take some of the manual work out of filing your self-employment taxes.Once this rule takes effect, you may still receive individual 1099-NEC forms if you were paid through direct deposit, check or cash. If you have multiple clients who pay you through PayPal, Venmo, Upwork or other third-party payment apps and you earn more than $5,000, you'll receive one 1099-K instead of multiple 1099-NECs. To avoid any reporting confusion, make sure you're tracking your earnings manually or with accounting software such as Quickbooks. More money advice !function(f,b,e,v,n,t,s) if(f.fbq)return;n=f.fbq=function()n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments); if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0'; n.queue=[];t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e)[0]; s.parentNode.insertBefore(t,s)(window, document,'script', 'https://connect.facebook.net/en_US/fbevents.js'); fbq('set', 'autoConfig', false, '789754228632403'); fbq('init', '789754228632403'); https://www.cnet.com/a/img/resize/bfda3f238f922bdc7464d29e6cf2ad43483abe3b/hub/2022/12/20/671072fc-04be-498f-a270-b972a8585965/1099k.png?auto=webp&fit=crop&height=675&width=1200 2025-01-01 16:00:03

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If you've earned money through PayPal, Venmo, or the Cash App in 2024, brace yourself for this IRS tax change

This tax season, freelancers and side hustlers may receive an unknown form in the mail — IRS Tax Form 1099-K. After two years of delays, the IRS is finally here implementing a change in tax reportingwhich requires third-party payment applications like PayPalVenmo and Cash App for issuing 1099-K for every earner income from self-employment through a certain amount through these applications every…

[newtras]

If you've earned money through PayPal, Venmo, or the Cash App in 2024, brace yourself for this IRS tax change

This tax season, freelancers and side hustlers may receive an unknown form in the mail — IRS Tax Form 1099-K. After two years of delays, the IRS is finally here implementing a change in tax reportingwhich requires third-party payment applications like PayPalVenmo and Cash App for issuing 1099-K for every earner income from self-employment through a certain amount through these applications every…