if I don’t have a business account for PayPal or Venmo, will my income from those apps be taxed ? Or only if they are “business accounts”. I don’t accept credit cards so never opened a business profile on either app. Thanks !
According to their web sites PayPal will only send you a 1099-K if you have a business account. Venmo on the other hand states a 1099-K will be sent if you make over $600 on the sale of good or services.
Any income received from the process of a business needs to be reported to the IRS even if the source you use to receive that income doesn't report it.
If you are self-employed, it's likely you need to fill out an IRS Schedule C to report how much money you made or lost in your business. Freelancers, contractors, side-giggers and small business owners typically attach this profit or loss schedule to their Form 1040 tax return when filing their taxes. This article is a great help when you have a personal business you need to report on your tax return https://turbotax.intuit.com/tax-tips/self-employment-taxes/-what-is-a-schedule-c-irs-form/L7v0iDelI .
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The IRS is trying to capture previously hidden business activity but they have cast a very wide net.
Basically, all your business income must be reported, even if you don't get a 1099. On the other hand, if you get a 1099 for personal activity, just getting a 1099 does not make it automatically taxable, but the IRS will want to see an explanation. (Some types of personal activity, like hobbies and casual sales, are taxable even if you don't engage in regular activity that could be classified as a business.)