Many people who use Zelle, Venmo, and Cash App were stunned to learn that the Internal Revenue Service wants to know about certain transactions over $600.
Should you be concerned that big brother is watching your every money move?
That's what many users are concerned about, wondering if all their transactions will be reported to the IRS.
On Reddit forums, one poster said, "Time to squeeze the little guy dry some more."
Another user said, "Do I have to report every Venmo transaction between roommates?"
But CNBC says "No, the IRS isn't taxing your Venmo transactions."
It says a new law that took effect January 1st applies to small businesses, to make sure they pay their fair share of taxes.
The IRS is not taxing transactions between family or friends, which is how most people use Venmo and Zelle.
What defines a business transaction?
The new law will apply to people who received commercial payments through Zelle or Venmo, such as for gig jobs, or are big sellers on eBay.
But some eBay users are asking if you sell a used computer or bicycle, for a combined $600, will that be reported? (Short answer, probably).
The good news is that if you are impacted, you will now get a 1099 form from the payment app at tax time, to explain exactly what is being reported to the IRS. There should not be any confusion when it comes time to file your taxes.
But CNET, in an analysis of the new law,says for Zelle, Venmo, and Cash App users who use the services simply to transfer money between family and friends, there will be no change.
So don't waste your money.
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