New IRS 1099 Rule for PayPal and Venmo Targets Very Small Businesses and Will Cause Misreporting and Errors
Mat Sorensen


February 28, 2022

FroMat Sorensen Entrepreneur Articlem my article on Entrepreneur

The IRS recently announced that payment apps such as PayPal, Venmo, and CashApp will be required to issue 1099s to small businesses and self-employed persons. Here’s what you need to know.

New rule is targeted at very small businesses and individuals with a side hustle

Starting in tax year 2022, payment apps will be required to report to the IRS total payments received by a business account in excess of $600 annually. This new requirement is clearly targeted at the smallest of small businesses and at individuals with a side hustle, as the prior rule only required a payment app to report when an account received more than $20,000 and had 200 or more transactions within the year. These micro-businesses that collect less than $20,000 a year previously did not fall under the 1099 rule, but will now be treated like every other business, large or small…

Read the article on Entrepreneur here.

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