Over the past few years the popularity of mobile payment apps like CashApp, PayPal, and Venmo has grown. At One Step Software, we work with hundreds of recovery home programs that accept their rent or program fees through these sorts of mobile payment apps. One of the reasons we hear is the convenience, and lack of fees or tax burdens. However with a new tax law taking effect January 1 2022, that perceived convenience will come with fees and taxes now and in the near future.
But our fellow recovery home programs do not worry, because we have the perfect feature already built into your One step account to help you automate, and organize all your program fees collection and process.
First, let\’s look at the changes to a few of the mobile payment apps.
PayPal
If you are using PayPal to charge for business services, like program fees, then you are now supposed to sign up with their Merchant account. When you accept payment for your services, you are now charged a 2.98% transaction fee and a fixed fee which is .49 cents!
Also, if you thought PayPal was a nice way to avoid reporting taxes for the services you charge through their platform that would be incorrect. You do need to report PayPal transactions via a IRS 1099-K form if you process more than only $600 per year.
CashApp
Similar to PayPal, your business transaction via CashApp Business accounts also need to be reported using a 1099-k form for processing of $600 per year. CashApp’s fees for transactions are 2.75% per transaction.
Venmo
Lastly, Venmo also falls into the same situation requiring you to report earnings to the IRS via the 1099-K form if you process more than $600 in a calendar year.
For all three of these options listed above, income reporting becomes a lot more complicated if you mix the use of the apps for business and personal use. If you process more than $600 or more for your services through these sorts of payment apps, these payments will now be reported to the IRS. Who really needs more IRS reporting headaches?
One Step Payment Feature:
We built a Payment feature as part of the One Step platform that allows you to easily collect payments, process payments by credit card or ACH, and report all of this information for you in a clean and easy to read dashboard. You also get to send automated receipts, and invoiced emails. Why not leverage your One Step account further, and start using the Payment feature for all program fee collection?
If you haven’t yet activated your Payment feature for processing, reach out to customers@onestepsoftware.com for assistance with the easy set up process.