Thanks to new legislation that went into place at the beginning of this year, I predict that a lot of unsuspecting small business owners are about to fall victim to a fresh scam.
The scam will relate to legislation around new tax reporting rules that will affect millions of freelancers and small businesses. As I explained in an earlier column, beginning for the 2022 tax year, if you receive more than $600 in total payments during the course of the year from a payment service like PayPal, Venmo (which is owned by PayPal), Square, Stripe or online sales of your products made through Amazon, Etsy and other marketplaces – regardless of how many customers are paying – that payment service is required to report that amount to the IRS and to you by sending a Form 1099-K – used for reporting payments via these third parties – in early 2023.
