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IRS not requiring $600+ 1099Ks for 2022

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    derrybderryb Posts: 36,209 ✭✭✭✭✭

    Where's my LOL troll?

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    3stars3stars Posts: 2,282 ✭✭✭✭✭
    Previous transactions: Wondercoin, goldman86, dmarks, Type2
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    CoinPhysicistCoinPhysicist Posts: 597 ✭✭✭✭

    Yet the proposal to up the limit from $600 to $10000 per year to issue the 1099-K was voted down with the big spending bill.

    At least this stupid law is being delayed.

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    CatbertCatbert Posts: 6,604 ✭✭✭✭✭

    @CoinPhysicist said:

    At least this stupid law is being delayed.

    Must await all the IRS new hires to be processed.

    "Got a flaming heart, can't get my fill"
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    LakesammmanLakesammman Posts: 17,294 ✭✭✭✭✭

    Gotta love the IRS - still waiting to hear if my 2020 return was accepted as submitted. Usually never is .......

    "My friends who see my collection sometimes ask what something costs. I tell them and they are in awe at my stupidity." (Baccaruda, 12/03).I find it hard to believe that he (Trump) rushed to some hotel to meet girls of loose morals, although ours are undoubtedly the best in the world. (Putin 1/17) Gone but not forgotten. IGWT, Speedy, Bear, BigE, HokieFore, John Burns, Russ, TahoeDale, Dahlonega, Astrorat, Stewart Blay, Oldhoopster, Broadstruck, Ricko.
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    tyler267tyler267 Posts: 1,234 ✭✭✭✭

    IRS announces delay for implementation of $600 reporting threshold for third-party payment platforms’ Forms 1099-K
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    IR-2022-226, December 23, 2022

    WASHINGTON — The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season.

    As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.

    As part of this, the IRS released guidance today outlining that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations (TPSOs) that would have generated Form 1099-Ks for taxpayers.

    "The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan," said Acting IRS Commissioner Doug O'Donnell. "To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements."

    The American Rescue Plan of 2021 changed the reporting threshold for TPSOs. The new threshold for business transactions is $600 per year; changed from the previous threshold of more than 200 transactions per year, exceeding an aggregate amount of $20,000. The law is not intended to track personal transactions such as sharing the cost of a car ride or meal, birthday or holiday gifts, or paying a family member or another for a household bill.

    Under the law, beginning January 1, 2023, a TPSO is required to report third-party network transactions paid in 2022 with any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the number of transactions. TPSOs report these transactions by providing individual payee's an IRS Form 1099-K, Payment Card and Third-Party Network Transactions.

    The transition period described in Notice 2023-10PDF, delays the reporting of transactions in excess of $600 to transactions that occur after calendar year 2022. The transition period is intended to facilitate an orderly transition for TPSO tax compliance, as well as individual payee compliance with income tax reporting. A participating payee, in the case of a third-party network transaction, is any person who accepts payment from a third-party settlement organization for a business transaction.

    The change under the law is hugely important because tax compliance is higher when amounts are subject to information reporting, like the Form 1099-K. However, the IRS noted it must be managed carefully to help ensure that 1099-Ks are only issued to taxpayers who should receive them. In addition, it's important that taxpayers understand what to do as a result of this reporting, and tax preparers and software providers have the information they need to assist taxpayers.

    Additional details on the delay will be available in the near future along with additional information to help taxpayers and the industry. For taxpayers who may have already received a 1099-K as a result of the statutory changes, the IRS is working rapidly to provide instructions and clarity so that taxpayers understand what to do.

    The IRS also noted that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect.

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    derrybderryb Posts: 36,209 ✭✭✭✭✭

    Where's my LOL troll?

    Give Me Liberty or Give Me Debt

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    winestevenwinesteven Posts: 4,062 ✭✭✭✭✭

    Reposting my comment from a very similar thread:

    Gee, if I remember right, this provision was specifically put in place to raise a specific amount of projected revenue to cover part of the cost of the American Rescue Plan………..

    A day without fine wine and working on your coin collection is like a day without sunshine!!!

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    WQuarterFreddieWQuarterFreddie Posts: 2,548 ✭✭✭✭✭

    So what does this mean for Ebay sellers that got their 1099K for years 2020 and 2021 and I bet will get them for 2022?

    Don't be fooled. This waiver will only apply to the COMPANIES that are unable to generate and send them. Ebay and Amazon will still send them out in my opinion.

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    bigjpstbigjpst Posts: 3,033 ✭✭✭✭✭

    @WQuarterFreddie said:
    So what does this mean for Ebay sellers that got their 1099K for years 2020 and 2021 and I bet will get them for 2022?

    Don't be fooled. This waiver will only apply to the COMPANIES that are unable to generate and send them. Ebay and Amazon will still send them out in my opinion.

    If you are selling on ebay or amazon regularly, you should be reporting the sales already. 1099k means nothing to me. I record all my sales regardless of how or where I was paid.
    This delay is IMO buying them more time to figure out how to exclude grandma sending little Jimmy $800 to fix his car on Venmo. The amount of non business transactions that were about to be reported I assume would overload the already short staffed IRS. Once they get all the new agents and employees they will figure out how to implement the changes.

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    WQuarterFreddieWQuarterFreddie Posts: 2,548 ✭✭✭✭✭
    edited December 24, 2022 8:18AM

    @bigjpst said:

    @WQuarterFreddie said:
    So what does this mean for Ebay sellers that got their 1099K for years 2020 and 2021 and I bet will get them for 2022?

    Don't be fooled. This waiver will only apply to the COMPANIES that are unable to generate and send them. Ebay and Amazon will still send them out in my opinion.

    If you are selling on ebay or amazon regularly, you should be reporting the sales already. 1099k means nothing to me. I record all my sales regardless of how or where I was paid.
    This delay is IMO buying them more time to figure out how to exclude grandma sending little Jimmy $800 to fix his car on Venmo. The amount of non business transactions that were about to be reported I assume would overload the already short staffed IRS. Once they get all the new agents and employees they will figure out how to implement the changes.

    I am responding to the OP who has a misleading claim that sellers who do less than $20,000 will not receive a 1099K. The horse has already left the barn...those who sell more than $600 are going to get a 1099K for 2022 in my opinion because Amazon sent them for 2020, 2021 and Ebay/PayPal sent them for 2021.

    Those sellers WILL NOT get a reprieve in my opinion for 2022.

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    logger7logger7 Posts: 8,084 ✭✭✭✭✭
    edited December 24, 2022 9:08AM

    How will they fund the new Omnibus bill then?

    Work in all your deductions, might as well file even if you don't owe. I heard last time they published the number of non filers it was around 30%.

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    tyler267tyler267 Posts: 1,234 ✭✭✭✭

    @logger7 said:
    How will they fund the new Omnibus bill then?

    Work in all your deductions, might as well file even if you don't owe. I heard last time they published the number of non filers it was around 30%.

    The IRS is hiring. They are putting a lot of emphasis on Attorneys and Special Agents(criminal investigators). I think they really want to collect the approximately $400 billion in annual taxes on reported income. That's what the 1099k rules are all about. They just need time to hire and train.

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    logger7logger7 Posts: 8,084 ✭✭✭✭✭

    @tyler267 said:

    @logger7 said:
    How will they fund the new Omnibus bill then?

    Work in all your deductions, might as well file even if you don't owe. I heard last time they published the number of non filers it was around 30%.

    The IRS is hiring. They are putting a lot of emphasis on Attorneys and Special Agents(criminal investigators). I think they really want to collect the approximately $400 billion in annual taxes on reported income. That's what the 1099k rules are all about. They just need time to hire and train.

    Enforcement was negligible the last few years. https://www.irs.gov/pub/irs-pdf/p55b.pdf

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    jmlanzafjmlanzaf Posts: 31,943 ✭✭✭✭✭
    edited December 24, 2022 10:58AM

    @WQuarterFreddie said:

    @bigjpst said:

    @WQuarterFreddie said:
    So what does this mean for Ebay sellers that got their 1099K for years 2020 and 2021 and I bet will get them for 2022?

    Don't be fooled. This waiver will only apply to the COMPANIES that are unable to generate and send them. Ebay and Amazon will still send them out in my opinion.

    If you are selling on ebay or amazon regularly, you should be reporting the sales already. 1099k means nothing to me. I record all my sales regardless of how or where I was paid.
    This delay is IMO buying them more time to figure out how to exclude grandma sending little Jimmy $800 to fix his car on Venmo. The amount of non business transactions that were about to be reported I assume would overload the already short staffed IRS. Once they get all the new agents and employees they will figure out how to implement the changes.

    I am responding to the OP who has a misleading claim that sellers who do less than $20,000 will not receive a 1099K. The horse has already left the barn...those who sell more than $600 are going to get a 1099K for 2022 in my opinion because Amazon sent them for 2020, 2021 and Ebay/PayPal sent them for 2021.

    Those sellers WILL NOT get a reprieve in my opinion for 2022.

    It partly depends on the state you are in. Several states already have $600 thresholds.

    To my knowledge. EBay has been using the $20k number.

    https://www.ebay.com/help/selling/fees-credits-invoices/ebay-form-1099k?id=4794

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    derrybderryb Posts: 36,209 ✭✭✭✭✭

    @WQuarterFreddie said:
    So what does this mean for Ebay sellers that got their 1099K for years 2020 and 2021 and I bet will get them for 2022?

    Don't be fooled. This waiver will only apply to the COMPANIES that are unable to generate and send them. Ebay and Amazon will still send them out in my opinion.

    1099Ks will still be issued but under the same rules as 2020 and 2021. The plan to lower the reporting amount to $600 from $20,000 has been scrapped until next year. In other words, nothing is changing for 2022 tax reporting requirements as far as 1099Ks are concerned. Will some companies that have already begun processing 1099Ks under the "$600 rule" continue to process and send out those 1099Ks? Remains to be seen. 1099Ks should not make any difference to honest tax payers who report all income that is required to be reported. 1009Ks are simply reminders of income to the income earner and are notices to the IRS of income that should be included in what a taxpayer is reporting as income.

    1099Ks are the IRS's way of having payment processers do the IRS's job. They are designed to have the processers help the IRS identify tax cheats.

    Give Me Liberty or Give Me Debt

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    derrybderryb Posts: 36,209 ✭✭✭✭✭
    edited December 24, 2022 11:46AM

    @WQuarterFreddie said:

    I am responding to the OP who has a misleading claim that sellers who do less than $20,000 will not receive a 1099K. The horse has already left the barn...those who sell more than $600 are going to get a 1099K for 2022 in my opinion because Amazon sent them for 2020, 2021 and Ebay/PayPal sent them for 2021.

    Those sellers WILL NOT get a reprieve in my opinion for 2022.

    A payment processer who generates a 1099K needs all of the 2022 data to complete the form. 2022 1099Ks can not be generated until after Dec. 31. The tax year has not yet ended and 1099Ks for the current tax year have not been generated. Sellers should get a 2022 1099K that is generated using the 2021 and 2022 rules for $20K or more in income.

    Give Me Liberty or Give Me Debt

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    derrybderryb Posts: 36,209 ✭✭✭✭✭

    @WQuarterFreddie said:
    So what does this mean for Ebay sellers that got their 1099K for years 2020 and 2021 and I bet will get them for 2022?

    Don't be fooled. This waiver will only apply to the COMPANIES that are unable to generate and send them. Ebay and Amazon will still send them out in my opinion.

    This is not a waiver. It is a one year delay in changing the reporting threshhold that requires a 1099K from $20K to $600. 2021's 1099K threshhold rules will remain in place for 2022. Tax cheats who have less than $20K income in 2022 from a single payment processer such as ebay or Paypal will have another year to take their chances with an even hungrier IRS.

    Give Me Liberty or Give Me Debt

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