Two US Senators have proposed an increase in the tax threshold for third-party payment networks. The proposal would increase the threshold for platforms like Venmo, PayPal, and CashApp from $600 to $10,000.
CNBC reported the two senators are riling an amendment to the $1.7 trillion spending package to affect the third-party payment threshold. Moreover, the increase would alter the tax reporting status of Form 1099-K from popular financial services.
US Senators Propose Threshold Increase for Form-1099K
Many Americans have been anxiously awaiting developments regarding the tax Form-1099K. The form is popular among the self-employed and is utilized to report earnings on third-party payment networks. Specifically, income from platforms like PayPal, Venmo, and CashApp require filing if they exceed a threshold set by the IRS.
That threshold is rumored to be affected, with two US Senators officially proposing a bill for its increase. Sen. Bill Hagerty (R-Tenn) and Sen. Joe Manchin (D-W.Va.) are co-sponsors on the amendment that would raise the threshold from $600 to $10,000.
That same Form-1099K was already effected for the 2022 tax season. Prior to this past year, the threshold for filing was 200 transactions that exceeded $20,000. Subsequently, the American Rescue Plan Act of 2021 decreased the threshold to merely $600.
“This is the best relief we can get for people,” Machin told CNBC. Adding that the $10,000 threshold is “the best way to approach it.” Furthermore, he assured his belief in the publication that raising the threshold has more support than delaying action.
The report also stated that many Tax professionals have “deep concerns,” over the current threshold of $600. Conclusively, New Jersey Accountant Albert Campo noted his expectation in many people filing a Form 1099-k. Noting the industry’s attempts to “be proactive in addressing it.”