A provision in the 2021 American Rescue Plan now requires earnings over $600 will be reported to the IRS. 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 in a year. Next year, 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. This tax form might include taxable and nontaxable transactions, particularly if the account is for both business and personal use. The IRS is not taking money you send to family and friends. Personal transactions involving gifts, favors or reimbursements are not considered taxable.
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