The IRS has delayed forcing gig workers to report payments over the $600 threshold made through third-party payment apps like Zelle, Cash App, Venmo, and PayPal. announced this week.
The rule’s extension is a victory for gig workers who hold multiple jobs to make ends meet in President Joe Biden’s struggling economy.
Sixteen percent of Americans participate in the so-called “gig economy,” but not all of those surveyed are paid through third-party apps, Pew Research found. found.
“It is clear that an additional delay to the 2023 tax year will avoid problems for taxpayers, tax professionals, and others in this area,” IRS Commissioner Danny Wuerfel said in a statement.
The delay could cost the Treasury about $2 billion. wall street journal report:
For the second year in a row, the IRS has delayed enforcement of a law that would require these e-commerce and payment platforms to send information to the agency about many of their users who earn more than $600 a year.
The old thresholds (revenue greater than $20,000 and number of transactions greater than 200) remain in effect for the 2023 tax year. The IRS will begin transitioning him to the new system starting with his 2024 tax year, the same year he will use the $5,000 threshold.
A delay does not change the amount of tax someone owes. Only the taxes that online platforms must report to the IRS will change. The move could ease tax headaches for many people. The IRS said Tuesday that it is concerned about large-scale disruption if an estimated 44 million Form 1099-Ks are sent to taxpayers and the IRS in early 2024.
The rule is a result of Biden’s American Rescue Plan Act of 2021 and is intended to force American workers to “pay their fair share,” an idea Biden has promoted to the wealthy and now is pushing the average American.