Got a side hustle gig and using apps instead of direct transfer to your bank form customers? Make sure to report those earnings to the IRS as it is taxable income. The IRS advises Americans to declare their earnings if they receive more than $600 via PayPal, Venmo, or any other Cash Apps.

Prior to 2022, there were separate thresholds for third-party transactions for business owners and those doing side gigs to make extra cash. According to the IRS, people had to disclose earnings if they had more than 200 such transactions and gross payments that exceeded $20,000. But irrespective of how many of those transactions you’ve had, the American Rescue Plan Act requires that any transactions conducted after March 11, 2021, that are  over $600 be disclosed to the IRS.

This is merely a reporting change; these profits were already taxable, thus there has been no change in the tax legislation.

Form 1099-K, Payment Card and Third-Party Network Transactions, is an IRS information return used to report certain payment transactions to improve voluntary tax compliance. You should receive Form 1099-K by January 31 if, in the prior calendar year, you received payments.

From all payment card transactions (e.g., debit, credit, or stored-value cards), and In settlement of third-party payment network transactions above the minimum reporting thresholds as follows:

For returns for calendar years prior to 2022:

Gross payments that exceed $20,000, and   more than 200 such transactions.

For returns for calendar years after 2021:

Gross payments for goods or services that exceed $600, and any number of transactions.

Note: For transactions made after March 11, 2021, the American Rescue Plan Act of 2021 clarifies Form 1099-K reporting by third-party settlement organizations applies only for transactions for the provision of goods or services settled through a third-party payment network.

What should I do when the total gross payment amount shown on Form 1099-K does not belong to me?

In some cases, the total gross payment amount on  Form 1099-K  may not belong to you. The following examples illustrate such situations and provide information that may help you determine how to account for the amount of gross payments shown on the Form 1099-K you received.

• If you report your business income on Form 1120, 1120S or 1065 and you receive a Form 1099-K in your name:
  • If you report your business income on a Form 1120, 1120S or 1065 and you receive a  Form 1099-K  in your name as an individual (showing your social security number), contact the PSE listed on the Form 1099-K to request a corrected Form 1099-K showing the business’s TIN. In addition, request that the PSE use the business’s TIN on all future Forms 1099-K. Report the income from the Form 1099-K along with any other sources of income on the appropriate income tax return. Retain all correspondence with the PSE to show that this error was corrected.
• If you shared your credit card terminal with another person or business:
  • If you shared your credit card terminal with another person or business, your  Form 1099-K  will include payment card transactions belonging to the person or business that shared your terminal, in addition to your own payments. Where required, you should file and furnish the appropriate information return (e.g., Form 1099-K or  Form 1099-MISC) for each person or business with whom you shared a card terminal. The information return should include the total payment card transaction amount in addition to any other income belonging to the other person or business. You should retain records of payments issued to each person or business sharing your terminal, including but not limited to shared terminal written agreements and cancelled checks.
• If you bought or sold your business during the year:
  • If you bought or sold your business during the year, your  Form 1099-K  may include payments for transactions made before you purchased or after you sold the business. This can occur when the tax identification number and business name associated with a credit card terminal are not updated with the new owner’s information. You should request a corrected Form 1099-K from the PSE/Filer listed on the form. Its name and telephone number are on the form. Also keep a copy of corrected Form(s) 1099-K with your records and retain the purchase or sales agreement that substantiates the timing of the ownership change.
• If you changed your business entity structure during the year:
  • If you changed your business structure during the year, such as incorporating or converting from a sole-proprietorship (Schedule C) to a partnership (Form 1065), or vice versa, and continued using the same card terminal, the amount shown on the  Form 1099-K  will not correspond with your new entity’s tax return. Be sure to timely notify your merchant acquirer of any change to the name and tax identification number that links the terminal to your current business structure. Be sure to maintain documentation to support the correct income and deductions for both business entities.
• If you allow your customers to receive cash back when they use their debit cards for purchases:
  • If you allow your customers to receive cash back when they use their debit cards for purchases, the  Form 1099-K  you receive will include those cash back amounts as part of the gross amount of payment card transactions. Generally, you would not include cash back amounts as part of your business’s gross receipts on your income tax return, nor would you claim such amount paid to a customer as a business expense. It is important that you maintain records of customer cash back activity over the course of your tax year.
• If your business (or businesses) has multiple sources of income:
  • If your business (or businesses) has multiple sources of income, you may report business income on more than one line of a return or on multiple returns or schedules.  For example, assume you operate a retail business and have rental income. You accept payment cards for both businesses, but because you have only one credit card terminal to process these transactions, your  Form 1099-K  will include gross payment card receipts for both businesses. You should use your books and records to ensure that all gross receipts are reported on the appropriate line or schedule. In this case, the gross receipts from the retail business should be reported on Schedule C, and the amounts related to the rental activity included in the rental income reported on the Schedule E.

Visit IRS.gov for more information.

Celebrity News Update- Premier Jewelry designer and manufacturer fashion house  ParisJewelry.com  has started manufacturing a new custom line of celebrity jewelry designs with 30% Off and Free Shipping. Replenish Your Body- Refilter Your Health with  OrganicGreek.com  Vitamin Bottles, Vitamins and Herbs.

Amazon plans to launch two internet satellites in 2022, for the first time