Policies & IssuesFeb 01, 2022
OSHA Withdraws ‘Vaccine or Testing’ MandatePolicies & IssuesFeb 02, 2022
Jewelers Using Payment Apps Should Know This New Tax Rule
For tax year 2022, the IRS has substantially lowered the threshold for receiving a 1099-K for business transactions made via payment apps.
A new tax reporting rule requires payment app providers to issue a 1099-K if business transactions total more than $600 per year.
New York—Jewelers, designers and service providers using payment apps like Venmo or PayPal should make note of a recent change to a tax reporting rule.
A new IRS tax reporting rule, effective as of Jan. 1, requires payment app providers to issue users and the IRS a form 1099-K if the user’s business transactions total more than $600 per year.
Previously, payment app providers would need to send a 1099-K only if a user had more than 200 business transactions in a year that totaled at least $20,000.
A business transaction means any payment, including tips, for goods and services.
The rule applies to purchases made via a payment app both in store and online, like through Instagram, eBay, Etsy, or any other selling platform.
The rule does not apply to personal transactions, like splitting dinner with a friend or sending birthday money.
App users won’t pay any additional taxes for purchasing goods or services.
Related stories will be right here …
A new IRS tax reporting rule, effective as of Jan. 1, requires payment app providers to issue users and the IRS a form 1099-K if the user’s business transactions total more than $600 per year.
Previously, payment app providers would need to send a 1099-K only if a user had more than 200 business transactions in a year that totaled at least $20,000.
A business transaction means any payment, including tips, for goods and services.
The rule applies to purchases made via a payment app both in store and online, like through Instagram, eBay, Etsy, or any other selling platform.
The rule does not apply to personal transactions, like splitting dinner with a friend or sending birthday money.
App users won’t pay any additional taxes for purchasing goods or services.
The change was signed into law last year as part of the American Rescue Plan, the $1.9 trillion stimulus bill passed, in part, to provide COVID-19 relief, but it also amended parts of the Internal Revenue Code.
The law will apply to tax year 2022, so those eligible for these 1099-Ks will receive them starting in 2023.
The reporting requirement is new, but the tax isn’t.
For this year, individuals are still required to report taxable income received through these platforms on their income tax return.
“Third-party information reporting has been shown to increase voluntary tax compliance and improve collections and assessments within [the] IRS,” said the agency in the FAQ section of its website about the change.
Payment providers like Cash App, PayPal, and Venmo have added updated guidance to their websites.
Payment app Venmo allows users to tag goods and services purchases in its app.
Venmo customers may receive an in-app notification or an email about confirming information for tax purposes.
For example, PayPal and its subsidiary Venmo offer an option for customers to tag their transactions as either a personal one or as a goods and services purchase.
Users are encouraged to select “goods and services” when they are sending someone money to purchase an item. Doing so also makes these transactions eligible for coverage under PayPal and Venmo’s purchase protection program.
In its FAQ section, Venmo noted that customers may receive an in-app notification or email asking them to confirm information they use when filing taxes, like a social security number and address.
Venmo noted that some amounts may be excluded from gross income, and therefore not subject to income tax, like if a user sells a personal item at a loss.
“We encourage customers to speak with a tax professional when reviewing their 1099-K forms to determine whether specific amounts are classified as taxable income,” said Venmo in a statement on its website.
Notably, payments for a good or service made via Zelle, which sends money between U.S. bank accounts, are not subject to this reporting rule.
Zelle would not need to provide a 1099-K because while it facilitates the sending of money between financial institutions, it doesn’t hold that money or participate in settling the funds.
The change to the reporting rule follows the announcement of a plan from the U.S. Treasury to close the “tax gap,” meaning the difference between what the government is owed and what it receives in taxes.
The American Families Plan Tax Compliance agenda, announced in May 2021, aims to raise an additional $700 billion over the next decade through new tax compliance measures.
“These unpaid taxes come at a cost to American households and compliant taxpayers as policymakers choose rising deficits, lower spending on necessary priorities, or further tax increases to compensate for the lost revenue,” said the department in its plan.
The treasury found the tax gap was nearly $600 billion in 2019.
“Working to close the tax gap reflects a commitment to ending our two-tiered tax system, one where most American workers pay their full obligations, but high earners who accrue income from opaque sources often do not,” said the treasury.
For more information about changes to tax reporting rules and the 1099-K form, visit the IRS website.
Users are encouraged to select “goods and services” when they are sending someone money to purchase an item. Doing so also makes these transactions eligible for coverage under PayPal and Venmo’s purchase protection program.
In its FAQ section, Venmo noted that customers may receive an in-app notification or email asking them to confirm information they use when filing taxes, like a social security number and address.
Venmo noted that some amounts may be excluded from gross income, and therefore not subject to income tax, like if a user sells a personal item at a loss.
“We encourage customers to speak with a tax professional when reviewing their 1099-K forms to determine whether specific amounts are classified as taxable income,” said Venmo in a statement on its website.
Notably, payments for a good or service made via Zelle, which sends money between U.S. bank accounts, are not subject to this reporting rule.
Zelle would not need to provide a 1099-K because while it facilitates the sending of money between financial institutions, it doesn’t hold that money or participate in settling the funds.
The change to the reporting rule follows the announcement of a plan from the U.S. Treasury to close the “tax gap,” meaning the difference between what the government is owed and what it receives in taxes.
The American Families Plan Tax Compliance agenda, announced in May 2021, aims to raise an additional $700 billion over the next decade through new tax compliance measures.
“These unpaid taxes come at a cost to American households and compliant taxpayers as policymakers choose rising deficits, lower spending on necessary priorities, or further tax increases to compensate for the lost revenue,” said the department in its plan.
The treasury found the tax gap was nearly $600 billion in 2019.
“Working to close the tax gap reflects a commitment to ending our two-tiered tax system, one where most American workers pay their full obligations, but high earners who accrue income from opaque sources often do not,” said the treasury.
For more information about changes to tax reporting rules and the 1099-K form, visit the IRS website.
More on Policies & Issues
The Latest
Events & AwardsJun 06, 2025
Here Are the 2025 Retailer Hall of Fame InducteesThis year’s honorees include a Midwest retailer and two multi-store independents, one in New York and the other in New England.
CollectionsJun 06, 2025
Piece of the Week: Harwell Godfrey’s ‘Granny Squares Eleanor’ Necklace As an homage to iconic crochet blankets, the necklace features the nostalgic motif through a kaleidoscope of cabochon-cut stones.
Events & AwardsJun 05, 2025
The 12 Fresh Faces in Couture’s Design AtelierDiscover the dozen up-and-coming brands exhibiting in the Design Atelier for the first time.
Brought to you by
The True Power Behind the Counter: Why Sales Associates Are the Heart of the Jewelry BusinessWhen investing in your jewelry business, it's important not to overlook the most crucial element of success: the sales associates.
SourcingJun 05, 2025
A Rare Suite of Rubies Has Arrived in Las VegasThe “Royal Ruby” Collection is a quintet of untreated rubies curated by collector Jack Abraham.
Weekly QuizJun 05, 2025
This Week’s QuizTest your jewelry news knowledge by answering these questions.
Events & AwardsJun 05, 2025
Daymond John to Give Keynote at JCK Las VegasThe entrepreneur and “Shark Tank” star will share his top tips for success.
MajorsJun 05, 2025
Platinum Guild International Updates Leadership TeamTwo existing executives have been given new roles.
Brought to you by
Clienteling Isn’t a Buzzword. It’s an Essential Business Model.More shoppers are walking out without buying. Here’s how smart jewelers can bring them back—and the tool they need to do it right.
Events & AwardsJun 05, 2025
Zillion Announces 'Women in STEM' Scholarship RecipientMeredith Tiderington, an electrical engineering student, was selected for the award.
Lab-GrownJun 04, 2025
GIA Reverting to More General Terminology for Lab-Grown DiamondsIt will quit assigning the stones specific color and clarity grades in favor of applying “new descriptive terminology.”
Events & AwardsJun 04, 2025
As JCK Talks Returns, Don’t Miss These 12 SessionsFrom design trends to sustainability, here’s a roundup of can’t-miss education sessions at JCK Las Vegas.
CrimeJun 04, 2025
10 Safety Tips for the Las Vegas Shows The Jewelers’ Security Alliance offers advice for those attending the annual trade shows.
MajorsJun 04, 2025
Amy Curran Promoted at Hill & Co.Her new role is director of strategic initiatives.
CollectionsJun 03, 2025
In Her Latest Collection, Viviana Langhoff Is Leaning Into GoldThe designer is embracing bold pieces with weight to them in “AU79,” a collection she celebrated with a creative launch party.
FinancialsJun 03, 2025
Signet Jewelers Sees Turnaround in Q1 With Sales Ticking Up 2%On an earnings call, CEO J.K. Symancyk discussed what’s working for the company and how it’s preparing for the potential impact of tariffs.
SurveysJun 03, 2025
Consumer Confidence Improves in May The index partially rebounded after months of decline, due in part to the U.S.-China deal to temporarily reduce import tariffs.
CollectionsJun 03, 2025
Dakota Johnson Is Roberto Coin’s New Brand AmbassadorThe actress stars in the latest campaign set in Venice, Italy, and is set to participate in other creative initiatives for the jeweler.
GradingJun 03, 2025
Mason-Kay Jade Adds ‘Fei Cui’ to Jade ReportsThe company has joined other labs, including GIA and Lotus Gemology, in adopting the Chinese term for "jadeite jade."
SourcingJun 02, 2025
Gemfields’ June Auction to Include 36-Carat RubyThe large stone will be offered at its June sale along with a selection of secondary-type rubies from a new area of the Montepuez mine.
GradingJun 02, 2025
GSI Opens New Lab in Thailand Located in Bangkok, the laboratory is Gemological Science International’s 14th location worldwide.
TrendsJun 02, 2025
Amanda’s Style File: Three Gems for June Those born in June have a myriad of options for their birthstone jewelry.
SourcingJun 02, 2025
David Allouche Joins Grandview Klein DiamondsThe diamond industry veteran has been named its senior sales executive.
FinancialsMay 30, 2025
Movado’s Q1 Sales Slip Amid ‘Challenging’ Retail Environment The company plans to raise the prices of select watches to offset the impact of tariffs.
CollectionsMay 30, 2025
Piece of the Week: Renato Cipullo’s ‘Hematite Blaze’ NecklaceDesigned by founder Renato and his daughter Serena Cipullo, it showcases a flame motif representing unity and the power of gathering.
CollectionsMay 29, 2025
Britney Spears Files Trademark for New Jewelry LineThe pop icon is one step closer to launching her “B Tiny” jewelry collection, a collection she first began posting about last fall.
Supplier BulletinMay 29, 2025
Inoveo Platinum Grain, Exclusively Distributed by StullerSponsored by Stuller
SourcingMay 29, 2025
Grizzly Auctions 6,620-Carat EmeraldIt was featured in the miner’s latest sale, which brought in $24.8 million.
