The American Rescue Act and how it may afffect you

[RiverpointeTax]

Starting January 1, 2022, The American Rescue Plan requires third party payment processors, such as PayPal, Venmo, Cash App, Zelle, and others, will start sending you a 1099 for transactions exceeding the aggregate total exceeding $600 for the year. The previous two element thresholds of $20,000 and more than 200 transactions no longer applies.

This means you may get two 1099s for the same transaction(s); one from the payment processor and the second directly from your client (signing service, Title Co., Law Office, Lender. etc.). This is where it’s extremely important to keep accurate records of every transaction.

The Joint Committee on Taxation estimates that this change in the 1099 rules will collect more than $8 billion in new taxes over the next 10 years from unreported transactions.

[cNsa5]

@RiverpointeTax => Thank you very much for this info.

[walshmobilenotary]

So we’ll be double taxed?

[RiverpointeTax]

You won’t be double taxed. Your income from a single source is being reported twice, two 1099s that will cover one income source. If you keep good bookkeeping records, you’ll have no problem keeping things clear.

The reason for the change is income under-reporting.