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IRS taking note of business transactions on PayPal, Venmo or other payment apps

New IRS reporting requirements affect Paypal and Venmo users.
New IRS reporting requirements affect Paypal and Venmo users.(Source: CNN/file)
Published: Nov. 10, 2021 at 8:39 AM EST|Updated: Nov. 10, 2021 at 10:01 AM EST
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(CNN) - If you use PayPal or Venmo for business transactions, the IRS might be looking more closely at your accounts.

It now requires payment apps to report such transactions if they total more than $600 a year.

Business transactions include payments for goods and services.

You’ve always been required to pay tax on them. Now the IRS might know if you don’t.

The change is part of the American Rescue Plan, and it’s designed to crack down on unpaid taxes.

It doesn’t affect reimbursements among family and friends. So, don’t worry if you use the apps to, say, split a pizza or share a cab.

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