On Friday, the Internal Revenue Service (IRS) in the nation said that a new rule that expected gig workers and others who were paid through third party apps to report more extensively was being delayed. There were many complaints that the rule was too complex and so the IRS was deferring the rule till next year.
The agency said, “The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan.” It also said that the rule will apply for money earned in 2023.
On Friday, the IRS said that the law “is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill.”
A few tax professionals believe that the new rule has the potential to cause a lot of confusion. Many people might use the apps for both business and personal transactions. They might potentially pay more than necessary in taxes. They might also have to spend a lot of time to separate their financial dealings. Fans are super excited.
The rule that forms a part of the COVID-19 relief bill called the “American Rescue Plan” would have required those who had paid more than $600 in 2022 for payments made through third party apps such as PayPal or Venmo to report these amounts as income to the IRS. Earlier, the reporting amount was 200 transactions or $20,000.
Freelance gigs are the method by which millions of Americans earn a large amount of their income. They earn through websites such as Etsy, eBay and Poshmark as well as through home rental apps. Many online sellers, who might be selling items as a hobby, might not have kept track of their actual income or the expenses related to these small business endeavors, according to some experts.
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