Episode 399
Feb 4, 2022
Allissa and Michael discuss the tax-reporting changes on Paypal, Venmo, CashApp and more.
Listen to "E399: Venmo, PayPal, and More Are Making Some Changes" on Spreaker.EPISODE 399
Weekly Roundup
Discussion Topic
- PayPal, Venmo, Cash App, Zelle are going to be reporting transactions to the IRS.
- Starting in 2022
Major Tax-Reporting Change for Users of Venmo, PayPal and Others
Venmo, Cash App, PayPal to report transactions of $600 or more to IRS - Marketplace
- If you have unreported income from Jan 1 to now, make a note of it now so you can report properly.
- Separate your biz & personal $ apps
Quick Tips
- WaterPik = game changer
Sponsors
Transcript:
Sponsor message:
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Michael Reynolds:
Hey, everyone. Welcome to the Massage Business Blueprint Podcast, where we help you attract more clients, make more money and improve your quality of life. I'm Michael Reynolds.
Allissa Haines:
I'm Allissa Haines.
Michael Reynolds:
We're your hosts. Welcome, on this... Well, for me, it's a cold day. It's a cold day for you too, from what [crosstalk 00:01:34]. Your headphones were making your ears cold.
Allissa Haines:
It is. It was so cold even the foamy part of my headphones was cold because I didn't turn my heat on early enough this morning in the little office. But more exciting than that, happy episode 399.
Michael Reynolds:
Oh my goodness. I just noticed that. Holy cow.
Allissa Haines:
Right? We have absolutely nothing special planned for episode 400, but I have a week to come up with something. So I'm working on it.
Michael Reynolds:
We may or may not have something special.
Allissa Haines:
We may or may not. We might just not even mention the episode number if I can't think of anything fun enough to do.
Michael Reynolds:
So what are you reading or watching or listening to or consuming?
Allissa Haines:
I have been watching, have you watched Space Force?
Michael Reynolds:
I have. It's hilarious.
Allissa Haines:
Oh my God.
Michael Reynolds:
So good.
Allissa Haines:
It's so good. Okay. So it is, I'm going to totally read right from Wikipedia. It's an American workplace comedy starring Steve Carell, John Milkovich, Lisa Kudrow has some little bits in and out of there. And it's so good. Let me say this. Walt and I started watching it, and I love Steve Carell, I liked The Office but I actually didn't watch it all that much because I don't like that really uncomfortable feeling you get when something is so awkward in middle school. So I liked The Office and I liked the cast, but I did not like the awkwardness of Steve Carell, it always just made me feel bad for him at the core of my being.
Allissa Haines:
So this is not like that. There's a little bit of that, but in such a... It's just sweet and funny and John Milkovich just freaking amazing. It's a really good show. It's on Netflix and I heard that the second season is coming out in February, so soon.
Michael Reynolds:
Oh good. I was wondering about that.
Allissa Haines:
Yeah. Actually, it says February 18th. So we're not finished the first season yet. But Space Force is really good so you should watch that.
Michael Reynolds:
I'm glad you watched that.
Allissa Haines:
And that's all I have. Have you been reading anything or no?
Michael Reynolds:
Nothing to report today but I do like the review you posted here. That was fun.
Allissa Haines:
Yeah. Why don't you tell people about that?
Michael Reynolds:
Sure. So we occasionally go look at our reviews and Allissa looked at our reviews recently and found a really nice one so we're going to share it. This is from, I think it's C Ridgy, is the username.
Allissa Haines:
Cridgy. I call him Cridgy.
Michael Reynolds:
So Cridgy says, "Hi. I got to say, you two are so helpful and very informative on so many topics. Even the ones I don't want to think about, having been a massage therapist for almost 22 years; taxes, social media, COVID and more. So grateful to have found you. So valuable for a self employed massage therapist." Thank you so much. That's awesome.
Allissa Haines:
And actually, you're probably right about being C Ridgy because after I posted this on our Instagram, I just did a little screenshot. I got a message from someone and it's from someone named Cristi who we're connected with on Instagram and we've messaged a little bit here and there. Cristi puts really great videos up on Instagram. I'm just going to share their username. I don't have permission to do that but I'm sure it'll be fine if they told me that. And now I can't find... Oh man, how do I get to their profile? Okay, Adams Wellness Massage. I think it's a Cristi Adams. I, they do some really great stuff with video and I think it's worth your look. If you're on the Instagram, check out what they're doing because it might be some good stuff to emulate.
Michael Reynolds:
All right. So it may or may not be Cristi, but thank you for the review. We appreciate it. We really do. It's nice to get the feedback. It helps us feel like we're not just shouting into the void.
Allissa Haines:
Yeah. And with the bad reviews, it gives me something to shout to the void about.
Michael Reynolds:
There you go.
Allissa Haines:
It was our sponsor, Michael.
Michael Reynolds:
Our friends at the lovely ABMP.
Allissa Haines:
Yay. Let's talk about the ABMP Education Center. You can go to Abmp.com/learn and you're going to see 600 hours plus of CE courses included with ABMP membership, also available for purchase to non-members, at a price that is lower than what another organization charges their members for online CE. I'm just going to slip that in there. You have all kinds of topics, hands on techniques, ethics, self-care cultural competency, all kinds of courses from massage educators themselves, which is so important. AMBP members get free CE for all the courses included with their level of membership, a great way to meet CE requirements, to try out new presenters before you slap down a ton of cash on live events with these presenters and save your CE budget for those kinds of live courses that you want. So you can check out the ABMP Education Center at Abmp.com/learn.
Michael Reynolds:
All right. So there's a thing that came up from a tax standpoint with some apps and you're going to tell me about it. So I'm all ears.
Allissa Haines:
I totally am. And I just got to click over back to my notes here. So first of all, we have a member, Joan, who is fantastic and sees all these neat little news bits and over the couple of years has just dropped us an email and been like, "Hey, did you see this? It's probably relevant." And half the time, it's something that I completely missed. So thank you, Joan, for giving us today's topic, which is about the change beginning in 2022, so don't panic right this second because you got time to make this all be okay, there's a change in tax reporting from these money transfer services essentially, like Venmo and PayPal and Zelle and Cash App. Beginning 2022, these services are going to start sending tax documents to the IRS, doing a W-9 for anyone who has received a total of $600 in payments for goods or services during the calendar year. So what this means, and I'm going to just put this in the context of what it means for me. I use Venmo within my household.
Allissa Haines:
I do the grocery shopping so I usually put the groceries on my credit card and then I come home and we have separate finances because we're not married. And even if we were, we would have separate finances. And then I look at the receipt and I Venmo Walt the percentage. I request via Venmo his percentage of the groceries for him and his kids. And usually within a day or two, or if I nag him more, he does the little payment button on Venmo and he sends me that cash. It is definitely more than $600 a year of grocery transfers. So what this sounds like is that at the end of the year, Venmo's going to send me a W-9 and they're going to be like... I don't know, because they never say W-9 within any of these articles. They just say "will be reported to the IRS." So even though this is a personal money transfer, it sounds like Venmo is going to tell the IRS, "Hey, Allissa received three grands worth of transfers into her Venmo. You might want to keep an eye on that."
Allissa Haines:
And the IRS is going to see that and they're going to decide if they want further information from me, if they want me to demonstrate that it was truly just a personal bank transfer, a personal money transfer, or an actual business transaction. Now this is happening because so many businesses, especially service based businesses and especially businesses where people get tips, I could accept a Venmo or PayPal or Cash App transaction as if it was a personal transaction from a client. And then I'm not recording that income as business income. That's what they're trying to catch. Also, people who work as employees at spas and larger places, a lot of times their customers, their clients are tipping them directly with one of these apps. So you also have a lot of service people who accept gratuities who are doing it through these personal apps and not claiming that income.
Allissa Haines:
This is not new. As long as there have been in taxes, there have been people who only accept cash or whatever in order to not have to report all of their income. So if you've been doing that, know that there's a greater chance you're going to get caught and audited or have to prove that income beginning in 2022. So Michael, so far, has that been clear?
Michael Reynolds:
Yeah. I was doing a little bit of searching while you were talking, and they're actually going to issue a 1099. It's only for business transactions, does not include personal transactions such as being reimbursed by a friend for things.
Allissa Haines:
Right. But they may not know what's what.
Michael Reynolds:
Right.
Allissa Haines:
And if you've been using it for business purposes and you've been using it in a personal account, you could really end up struggling because half of those transactions in that account are actually business and half of them are personal and if they find that you've been lying about the business ones, they're probably going to pin you on the personal ones too. They're going to be like, "You lied about those so we're just going to assume they're all business expenses and are business income and you're going to have to pay taxes and fees and penalties on top of all of that, for the tax that you would've owed on that income had you reported it." So here's what you got to do, I think, and I'm going to put links to a couple articles in the podcast notes, if you want to look into it a little bit more yourself. If you are using these apps for accepting payments or tips, one, use the business version. I believe that Venmo and PayPal all have business versions now. Yeah, You're going to get a fee taken out just as if you accepted a credit card.
Allissa Haines:
And again, that's part of the reason why people are using these, because they don't get fees taken out if they pretend it's a personal transaction. Sign up for the business version of the app and people can tip you and pay you that way. Then it's all recorded. It's all legit. If you are super resistant to that and you insist on using the personal version to avoid fees, set up a separate account under your business email or a separate email then don't use the same Venmo for getting reimbursed for groceries that you're using to get payments and tips from your clients. At the very least, set up a separate account. I would also make sure that you are keeping track. So make a little note when a client Venmos you something. Have a little spreadsheet on your computer that's easy to access or have a notepad or whatever, but I would make a note so that you have a very clear record of what expenses came in via your business especially if you're mixing it all.
Allissa Haines:
I would now, while you're early in the year, if you have accepted any business related payments and income via any of these apps from January 1st through whatever date you're listening to this, I would go back and make sure you are making note and separating the personal and the business transactions up until this date because moving forward, you know better and you're not going to use that account for business transactions anymore. So a little bit of record keeping. We don't ever condone people hiding income, but it happens and certainly earlier in my career I pocketed a cash tip or two before I realized the implications of that. My hope is that fewer and fewer people are doing that now.
Allissa Haines:
Also because people who didn't report their income, they got a lot less aid in unemployments and in PPP loans and stuff because they had reported so little income that the government didn't feel they were entitled to. You only got your aid based on what had been previously reported. So my hope is that a lot of people have moved away from that model of hiding income, but it's still happening and it's happening certainly in fields other than massage. But now you know. If you're still doing it, there's a greater likelihood you're going to get caught using these apps. So change your system. That's it.
Michael Reynolds:
Yeah. Thanks for sharing. I wasn't aware of this so thanks for sharing this and thanks Joan for pointing it out to us. One more great reason to keep your business and personal finances separate. I just can authorize that enough. One more good reason to do it.
Allissa Haines:
Yeah. It's super important.
Michael Reynolds:
Yeah.
Allissa Haines:
Okay. Michael, this is so exciting, but who's our next sponsor?
Michael Reynolds:
We have a new sponsor. Woo. So excited. Our new sponsor today is Happyface. [inaudible 00:14:29]
Allissa Haines:
I love the name.
Michael Reynolds:
It's fun to say.
Allissa Haines:
It's so fun to say. So listen, face cradles, man. They can be so uncomfortable for the clients and the pressure and the stuffiness that they get face down in a massage cradle can really ruin the whole massage experience. Happyface is the most comfy face cradle so you can give the most relaxing massage of your client's life. It is a really cool innovative heart shape design that eliminates sinus pressure and eye pressure. You will likely not have to be adjusting it during the massage. No wrinkles on the face, no makeup smearing. It's really cool. It's made in the USA and it's seamless and it's got a super easy to clean surface. So cleaning right now, I'm so excited that I'm like losing my space in my notes here, but that seamless thing, I'm noticing the seam on my face cradle, the vinyl starting to chip away the seam because I think my office mate was really cleaning it too hard. But we're all super hypervigilant about cleaning.
Allissa Haines:
This has a seamless surface. I'm so excited. It's about same dimensions as all the other massage face cradles. So your face cradle covers are going to fit just fine. It is designed to fit on all massage tables and all massage shares. It's got Velcro fully on the entire back surface so you don't have to worry about matching up little Velcro strips. The whole thing's just going to stick where you put it. You can get 20% off your entire purchase at Massagebusinessblueprint.com/happyface using code MASSAGEBB at checkout. And that's Massagebusinessblueprint.com/happyface.
Michael Reynolds:
So fun to say. I can't wait to say it more. Happyface.
Allissa Haines:
I know. And actually, mine's coming in the mail today. So by the time we record, I can give you some more feedback. But I did look around at what other massage therapists have been saying about it and it's all good things and I'm really excited to get mine.
Michael Reynolds:
Awesome.
Allissa Haines:
And I bought it. That's not like they didn't send it to me free so I would say nice things. I bought it, folks. Because that's what we do here. We're consumer reports. We're not messing around.
Michael Reynolds:
Not messing around. All right. Quick tip time.
Allissa Haines:
I don't have one but yours sounds riveting.
Michael Reynolds:
Yes. Mine is riveting. It's all about dental care. So my quick tip today is that in my opinion, the water pick is a game changer. Here's why. I don't know how bad at you're flossing, Allissa, but I'm really bad at flossing. I hate it. I don't do it. Every time I go to the dentist, they're like, "You need to floss." I'm like, "Oh, I know." And I floss for three days after then I stop flossing because I just hate doing it. And so last time I went, I was just being honest again. I was like, "Oh, I just hate flossing. I know I need to do it. I just never get around to it." She's like, "Hey, what about a water pick?" And I'm like, "What?" And yeah, so the dentist took me through how a water pick works and showed me some different models.
Michael Reynolds:
It was like, "Yeah, this is really good for people who don't like to floss because you just fill up the thing and you can take it in the shower with you and you just shoot water at your teeth for 90 seconds and it's the same thing. That's really effective." I'm like, "Tell me more." So I bought a water pick for me and my wife and, and we've both been using it and it is game changing. I actually use this thing at least a few times a week now, which is dramatically more than I used floss. And it's super convenient. I got the cordless version because you can take it in the shower. So basically you charge it when you're not using it. And then you just pull the charger off, you take in the shower with you, fill up the reservoir and you just put it in your mouth and floss your teeth with the high pressure water thing. And it's so easy to use. So for me, it's a game changer. It actually helps me take care of my teeth better because I'm someone who hates flossing. So I wanted to share that.
Allissa Haines:
Rock on. I also hate flossing but I learned it was because I didn't like touching the dental floss, especially winding it around my fingers and stuff. So I just got those little flossing picks and now I'm like a championship flosser.
Michael Reynolds:
Yeah. I had those too and I just still don't use those either.
Allissa Haines:
Really?
Michael Reynolds:
So I'm flawed.
Allissa Haines:
No, I think it's personal and I think it's really exciting that this is an option. Actually, It might be a good option for one of the kids in my house who has a trouble with the sensory aspect of flossing. But they're okay with brushing. So maybe this would be an option for them. I'm going to look into this a little more. Thank you, Michael.
Michael Reynolds:
Yeah. It's not cheap. Mine was about $70. But like I said, for me it's worth it. It definitely gets my teeth in better shape.
Allissa Haines:
That's the price of like a low level rechargeable electric toothbrush, is the word I was looking for. So that's reasonable. That's totally reasonable.
Michael Reynolds:
It's an investment.
Allissa Haines:
Thanks, Michael, for changing our lives.
Michael Reynolds:
You're welcome. All right. Anything else?
Allissa Haines:
That's it. This is a super efficient episode.
Michael Reynolds:
We're good. All right. Thanks everyone for joining us today. We appreciate you being a listener. As always, you can find us on the web at Massagebusinessblueprint.com. And I know we say it a lot, but it's because it's amazing. If you're not a member of our community called Blueprint Mastermind, check it out. There's a 30 day free trial. Go to our website to learn more and you can join our super smart community of other massage therapists to help each other every day with stuff and we'd love to have you be a member. So again, that's Massagebusinessblueprint.com. Thanks for joining us today. Have a great day. We'll see you next time.
Allissa Haines:
Bye.