All you need to know about the new updates!

We love to use these app to send or receive money to friends and family, even to send invoices to our clients. When the Biden administration announced they will send 1099K form to anyone receiving more than $600 via any of these apps, all creatives on social media lost their shit! Excuse our french 🙂

Why will you be sent a 1099K form for using money apps after receiving $600 worth of money?

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Income, simple. But here is what you need to know:

According to Verify online, yes you will likely receive a 1099-K form if you receive more than $600 on an app. But that doesn’t mean you owe any additional taxes. This only applies for income that would normally be reported to the IRS anyway. Current tax law requires anyone to pay taxes on income over $600, regardless of where it comes from.

The taxes don’t apply to friends and family transactions, like rent payments or dinner reimbursements.

This tax report change took effect most likely because a lot of individuals claimed they lost money, itemized the heck out of every receipts and are not accurately reporting their income to the IRS. So, to be on the safe side: REPORT EVERYTHING! Utilize apps like Intuit to accurately keep track of your business income and the tax that you will be paying quarterly. The IRS is not expecting you to pay taxes on all the coffee and YOLO money you’ve been sending to your besties, but you better pay up if it business related!

Watch this quick video to understand where you stand with all the Tax changes.