New IRS rules around cash/pay apps

[TXJames44]

New IRS rules went into place on Jan 1. Payments over $600 annually through pay apps like Venmo, PayPal, Zelle, etc will be counted as income for the recipient. They will send a 1099 at the end of 2022.

Our team uses these apps to collect funds that 100% go back into the team for tournaments and such.

How are teams handling this change?

 

[Rick M]

**Not an accountant or a lawyer

The new law requires Venmo etc. to issue a 1099K, which may include both taxable and non-taxable monies. Team fees, which are basically a reimbursement for money laid out by the coach, are not taxable.

Obviously, for-profit teams and coaches who use payment apps will already have income reporting in place. But if you’re just collecting fees to pay for tournaments, training space, uniforms, etc. you should be fine. It’s always a good idea to keep excellent records.

Thanks for pointing this out, btw. Some people might be in for a nasty surprise if they didn’t know it was coming.

Sent from my iPhone using Tapatalk

 

[Rolling Hard]

Big Brother is watching!

The greenback is beginning to mount a significant comeback.

 

[El Oso]

pretty sure those apps have an option to send money to Friends and Family which would be non-taxable so I would make sure anyone paying dues sends it via Friends and Family

 

[Strike2]

An old fashioned check would also work.

 

[CoreSoftball20]

pretty sure those apps have an option to send money to Friends and Family which would be non-taxable so I would make sure anyone paying dues sends it via Friends and Family

You are right...all the "reps' doing illegal raffles are scrambling making sure people send as Friends and Family
so they can keep avoiding paying income tax on the thousands they make. I dont think F&F are taxed yet.

 

[Stxdad]

Talking about that I came across something the IRS posted and I was ok…. Lol


*Bribes. If you receive a bribe, include it in your
income.
*Illegal activities. Income from illegal
activities, such as money from dealing illegal
drugs, must be included in your income on
Schedule 1 (Form 1040), line 8z, or on Schedule
C (Form 1040) if from your self-employment
activity.
Stolen property. If you steal property, you
must report its fair market value in your
income in the year you steal it unless you
return it to its rightful owner in the same year.

this is all over the internet lol

 

[_MIA_]

There are better, much more lucrative , ways for the IRS to gain tax revenue..This is just low hanging fruit.

 

[uncdrew]

An accountant friend of mine told me they simply don't waste time auditing people with under half a million in income. So y'all are probably safe.


[EDIT] As am I.

 

[Shiloh]

Talking about that I came across something the IRS posted and I was ok…. Lol


*Bribes. If you receive a bribe, include it in your
income.
*Illegal activities. Income from illegal
activities, such as money from dealing illegal
drugs, must be included in your income on
Schedule 1 (Form 1040), line 8z, or on Schedule
C (Form 1040) if from your self-employment
activity.
Stolen property. If you steal property, you
must report its fair market value in your
income in the year you steal it unless you
return it to its rightful owner in the same year.

this is all over the internet lol

Instant audit if you put "5th Amendment" under employment.