The IRS Already Knows Your Income Level

Episode Transcript

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From square readers to Venmotransfers to your booking

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platform, the way clients payfor services has evolved
dramatically.
Last week, the IRS releasednotice 2024-85 which enclosed
important changes to how digitaltransactions are tracked and
reported.
When we talk about digitaltransactions, specifically
payments, we're talking aboutthird party settlement
organizations, these arecompanies like PayPal, Venmo,

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Cash App Square, your bookingplatform.
These companies act as themiddleman between your client's
payments and your bank account.
And they're required to reportyour transaction data to the
IRS.
When you hit the followingthresholds for 2024, it's a 5,
000 threshold for 2025, it's a2, 500 threshold for 2026.

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And beyond it's a 600 threshold.
There is no minimum transactioncount required moving forward.
And this is a significant dropfrom the previous 20, 000 and a
200 transaction threshold.
According to recent federalreserve data.
Digital payments now account forover 70 percent of all business

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transactions.
These new reporting requirementsaim to create a more accurate
picture of the modern economy.
The IRS has specificallydesigned this as a phased
approach to give businesses timeto adapt.
For 2024, they're even providingrelief from certain penalties
related to these reportingrequirements, making this the
perfect time to ensure yourdigital payment systems are

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properly set up.
Important note, these changesdon't affect how you can accept
payments.
They only change how paymentprocesses report your
transactions to the IRS.
As we move forward toward anincreasingly digital economy,
staying informed about thesechanges helps position your
business for success.
These reporting changes areabout modernizing how business

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income is tracked, not limitinghow you can accept payments from
your clients.
Remember the most successfulbarbers aren't just great with
clippers.
They're smart with their money.
Listen, the choice is yours, butthe clock is ticking.
Don't let the IRS give you ahaircut.
You can't style your way out ofyour move boss.