Pay Foreign Independent Contractors With Venmo In Fulton
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Reporting requirements for Venmo users For tax year 2024, payment apps like Venmo are mandated to issue a Form 1099-K for users who receive more than $5,000 in payments for goods or services within a single tax year.
Independent contractors and freelancers might find it attractive to use the app for its convenience in taking payments, especially on the go. However, Venmo may not be the best option. Using Venmo can come with risks, including potential violations of Venmo's terms of service.
While this opens doors to diverse talent and skill sets, it also introduces unique challenges in terms of tax compliance. One critical aspect of this compliance involves Form 1099, which US-based businesses may need to issue to foreign contractors for reporting payments made during the tax year.
The IRS requires a flat 30% withholding on ALL types of payments to foreign national individuals UNLESS: The individual has a U.S. tax identification number (SSN or ITIN) and qualifies for a tax reduction under the tax treaty between the U.S. and their country of tax residency.
Form 1099 is used to report payments made to an independent contractor. Expat business owners may need to file Form 1099 when working with contractors abroad. Failing to file Form 1099 as required could result in penalties.
However, the IRS doesn't require a company to withhold taxes or report any income from an international contractor if the contractor is not a U.S. citizen and the services provided are outside the U.S. filing forms 1099 is required if: The contractor is located internationally but is a U.S. citizen.
Form 1099 is used to report payments made to an independent contractor. Expat business owners may need to file Form 1099 when working with contractors abroad. Failing to file Form 1099 as required could result in penalties.
New reporting requirements So if you receive $600 or more in payments for services or goods through Venmo, you won't receive a Venmo 1099-K. Instead, the IRS will follow the old regulation for one more year. The Venmo 1099 K will be issued to people that meet these criteria: Earning at least $20,000 during the year.
