Starting in 2024, third-party payment platforms like Venmo and CashApp will be required to report transactions exceeding $5,000 to the IRS, dropping to $600 in 2026. This change ensures that income from these platforms is taxed, as technically it should have been reported all along.
The IRS is enforcing stricter reporting requirements for payment platforms to ensure everyone pays taxes on their income, regardless of whether individuals realize they need to report it.
Personal payments are exempt from this reporting requirement; however, payments tagged for goods and services will be reported to the IRS via the 1099-K form.
If users falsely categorize payments to avoid reporting requirements, they can face legal issues, as the platforms are mandated to comply with tax laws and monitor compliance.
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