We’ve curated some of the top topics circulating the web regarding independent contractors over the last month.
New Form 1099-K Filing Requirements
Starting in January 2022, if you accept payments through a third-party network company such as Venmo, PayPal, Cash App, Square, and others, you may be getting a Form 1099-K. Formerly, Forms 1099-K were only sent to those whose transactions amounted to $20,000 or more. The threshold for 2022? $600. If you receive a 1099-K form, you must claim the income when you file your taxes.
The change has a few congress people saying what many of us are thinking: “$600 seems like an awfully low threshold, doesn’t it?” Criticism has already amassed, citing the difficulty in differentiating between a lucrative yard sale and an actual business. Critics believe that many Forms 1099-K will be sent in error. If you receive a Form 1099-K that includes non-reportable payments (i.e. rent transactions between roommates, non-professional selling of goods such as yard sales, etc.), you will need to contact the third-party network company to get the form corrected. If you frequently use these apps for your business and personal life, be sure to keep clear records of personal and business payments.
Need to know more? Here’s an informative article from the US Chamber of Commerce to help answer your questions.
The Crypto Crash
Whether or not you personally invested in cryptocurrencies, you’re probably aware that things aren’t going well for Bitcoin. Or Ethereum. (But Dogecoin saw a little spike thanks to a tweet by Elon Musk.) If you’re having a hard time following the crypto craze and subsequent crypto crash… you’re not alone.
So, what happened? Different opinions abound, from tips that the crash is par-for-the-course and values will climb again, to opinions that it was all a grand Ponzi scheme. Still others have found a way to bring Kim Kardashian into it.
Whether or not you invest in crypto is up to you, but it’s probably best to consider it a gamble rather than a sure-fire investment.
Federal Rate Hike
In an attempt to combat inflation, the Federal Reserve has increased its benchmark interest rate by .75%. That means everything affected by an interest rate (credit cards, personal loans, student loans, etc.) will be affected by the rate increase.
This will affect some people more than others. People hit hardest at the moment are those looking to buy homes, as mortgage rates are now much higher than they were earlier this year. (Though still significantly lower than they were in the 1980s.)
People with money in savings accounts, however, will likely see a modest increase in the interest rate their banks offer.
The important thing to remember is that markets are often volatile, and experts urge people not to bail on their investments.
“Revenge Travel”
Remember that time we barely did anything for *checks watch* two years? With the possibility of travel back in play, record numbers of American families are hitting the road (or sky) this summer. Despite the cost of airfare surging past inflation rates, Americans are traveling at record numbers. American travel to Europe is up 600%!
One problem: airline and airport staff shortages are causing huge delays and an uptick in canceled flights. One news outlet predicts “mayhem.” Cool cool cool. That staycation is sounding better all the time, isn’t it?
If you are planning to catch a flight in the upcoming months, be sure to arrive at the airport early in anticipation of potentially long lines and wait times. Whether you travel to Europe or your favorite local spot this summer, have a wonderful trip.