The way we make and spend money has changed dramatically in recent years. Cash transactions are less and less common, and you rarely, if ever, see someone bring out a checkbook. Simultaneously, electronic payment apps like PayPal, Venmo, CashApp, and Zelle are becoming increasingly popular.
The IRS has delayed its plan to tax payments made through e-payment services like PayPal. However, spouses getting divorced may still need to address payments received through these types of apps.
Is Money Received Through a Payment App Considered Income?
For decades, American workers received their weekly paycheck in the form of just that – a check. However, direct deposit and other electronic forms of payment have become much more commonplace. Money received through direct deposit during the marriage is part of the marital estate. Moreover, any money that comes into a divorcing spouse’s account via electronic payments, such as PayPal or Apple Pay, is also considered marital income. This money will need to be addressed during the property division process in a divorce. Spouses may be able to negotiate an agreement regarding the division of marital property, or they may have to go to court if an agreement cannot be reached.
Do E-Payments Count as Income for Child Support or Spousal Support Calculations?
It is important to note that any e-payments are also considered income for child support and spousal maintenance calculations. Illinois law states that net income is used to calculate support payments. Net payments include income, bonuses, commissions, and payments from other sources. So these payments can influence child support and spousal support calculations.
If you receive a substantial amount of your income through payment apps or electronic payment services, make sure you disclose this on your financial affidavit forms during divorce. You could be accused of hiding income or assets if you fail to disclose them.
If you think that your spouse is receiving more income than he or she is admitting to during your divorce, it is important to contact a skilled divorce attorney. A lawyer can help uncover unreported income and assets that may influence your divorce case.
Contact our Palatine Divorce Lawyer
Financial issues are often some of the most complex and frustrating aspects of the divorce process. For legal help you can depend on, contact the Law Office of Nicholas W. Richardson, P.C. Our Arlington Heights divorce lawyer can assist with property division, child support, and much more. Call 847.873.6741.
Source:
https://www.cnbc.com/2022/12/23/irs-delays-tax-reporting-change-for-1099-k-on-venmo-paypal-payments.html