Whether it's splitting the restaurant bill with your friends or collecting payment for your restaurant or small business, you've likely been using PayPal and Venmo more than you expected to even a few years ago. Individuals and small businesses alike have adopted peer-to-peer (P2P) payment apps to make convenient mobile money transfers. It’s important to keep detailed records of your business income and expenses so you don’t overstate your business income and pay extra tax.Creating a P2P business account is a good way to avoid intermingling business and personal transactions.This threshold is reduced to $600 without regard to the number of transactions beginning in 2023.
For 2022, if you receive more than $20,000 and 200 transactions for business payments on a P2P platform during the tax year, the platform is required to send Form 1099-K to you and the IRS.Peer-to-peer payment platforms are required to report business transactions to the IRS when they exceed the reporting threshold.
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