Tax season is getting extra difficult for the smallest companies, Inc. experiences.
The minimal reporting threshold for peer-to-peer fee platform transactions has decreased from $20,000 (or 200 transactions) to simply $600 due to a provision within the American Rescue Plan Act of 2021.
That implies that companies that use platforms like Venmo, Money App, PayPal, and even storefronts like Etsy and eBay can count on to obtain 1099-Okay kinds for the 2022 tax yr.
To be clear, companies have at all times been obligated to report their revenue to the IRS—however this new regulation could open up extra companies to audits if they do not accurately report their earnings.
To not point out that if companies do not correctly observe their funds exterior of third-party fee platforms to cross reference with their 1099-Okay kinds, they might fail to catch errors—and due to this fact set themselves as much as pay extra in taxes than they need to , says Sean DiMercurio, an authorized public accountant and founding father of the Orlando-based accounting and tax agency DiMercurio Advisors. Learn the complete story.