Here's some good news: Receiving a 1099-K can take some of the manual work out of filing your self-employment taxes. If you freelance regularly, a 1099-K may reduce your tax forms If you own a business, you most likely have an EIN, but if you're a sole proprietor or individual freelance or gig worker, you'll provide an ITIN or SSN. Payment apps like PayPal may reach out to you to confirm your tax information, such as your employer identification number, individual tax identification number or Social Security number. Payment apps may request tax information from you To make managing your business finances easier, we recommend creating separate PayPal, Zelle, Cash App or Venmo accounts for your professional transactions. This tax form might include taxable and nontaxable transactions, particularly if the account is for both business and personal use. Once the rule is implemented, third-party payment companies will issue you a 1099-K tax form each year if you earn $600 or more annually in income for goods or services. Prior to this legislation, third-party payment platforms would only report to the tax agency if a user had more than 200 commercial transactions and made more than $20,000 in payments over the course of a year. The new legislation is not a tax change: It's a tax reporting change so the IRS can keep tabs on transactions made through payment apps that often go unreported. ![]() ![]() If you're self-employed, you should already be paying taxes on your total income, regardless of how you receive your payments for goods and services. Here's what you need to know about 1099-Ks and how they will affect your taxes once the IRS rule is implemented.
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