Starting next year, Amazon’s 80 million U.S. customers and clients can use Venmo at checkout. PayPal is not yet a payment option for Amazon, but in 2022, Venmo users can pay for purchases on the mobile app and website. No date was announced for the feature launch, but when it is available, customers can pay either with their Venmo balance or their linked bank account.
Typically, Amazon accepts credit or debit cards and gift cards for payment. Amazon Global Payment Acceptance Director Ben Volk said in a statement:
We understand our customers want options and flexibility in how they make purchases on Amazon. We’re excited to team up with Venmo and give our customers the ability to pay by using their Venmo accounts, providing new ways to pay on Amazon.
While the Venmo tie-up is unlikely to move the needle for Amazon, it showed that the company is thinking strategically, which could make a difference in marginal purchases for users who prefer to use the convenience of Venmo.
Tax Changes Coming to Venmo
The American Rescue Plan new rule signed in March 2021 will impact business owners using third-party payment network providers. The IRS is recently cracking down on payments received through third-party payment networks such as PayPal, Zelle, or Cash App to ensure that they pay their fair share of taxes.
In the past, third-party payment networks were only required by the IRS to report payments exceeding $20,000 and over 200 transactions within a calendar year.
But, starting Jan. 1, 2022, third-party payment networks are required to send Form 1099-K to their users for transactions by mail or electronically. This new tax reporting requirement will impact the 2022 tax return filed in 2023.
In the future, Cash App or PayPal may request additional information to report all the transactions or provide EIN (Employer Identification Number, SSN (Social Security Number), or ITIN ( Individual Tax Identification Number if this information is not on file.
While this may sound like a new tax for Cash App or Venmo, this is merely a tax reporting change.
Written by Janet Grace Ortigas
Edited by Cathy Milne-Ware
Sources:
Business Insider: Venmo pushes toward profitability with new Amazon tie-up; by Grace Broadbent
Forbes: Venmo, Cash App And Other Payment Apps To Report Payments Of $600 Or More; by Kemberley Washington
Featured and Top Image Courtesy of simone.brunozzi’s Flickr Page – Creative Commons License
Inset Image Courtesy of Monito – Money Transfer’s Flickr Page – Creative Commons License
