Why we now have to charge 9% to run credit cards.

Payment app providers now must issue you and the IRS a Form 1099-K on your business transactions if, combined, they total more than $600 A YEAR. A business transaction is defined as payment for a good or service, INCLUDING tips. It does not include personal transactions, such as being reimbursed by a friend for dinner or receiving money to pay for a group gift.

The new requirement — included in the American Rescue Plan, which was signed into law last year — will apply to tax year 2022 and beyond.

So, in Layman’s terms, combined totals of more than $600 PER YEAR will now be taxed if paying via PayPal, CashApp, Venmo, Square or most any other money transferring app.