The IRS has announced an update requiring taxpayers to report payments of $5,000 or more received through third-party platforms like Cash App or PayPal. These transactions will now be documented with Form 1099-K, which will be issued to recipients for tax filing purposes.
This change aims to improve tax compliance by tracking higher-value transactions on digital payment platforms. It applies to personal and business transactions alike, effective for the upcoming tax year.
Be sure to consult a tax professional for guidance on how this may impact your filings.