1099-K
tyler267
Posts: 1,248 ✭✭✭✭
Nothing has changed, here is an email we just sent out, this is not tax advice just some general info, all of which was previously posted on other threads.
We have an important update to share regarding the 1099-K filing threshold, which may have significant implications for many taxpayers.
The American Rescue Plan Act of 2021 introduced a lower filing threshold for 1099-Ks, originally planned for 2023 but delayed by Notice 2023-10. This change requires third-party payment vendors to report information to the IRS for transactions of at least $600, and taxpayers must report this on their tax returns.
Previously, the threshold was higher, requiring at least 200 transactions and $20,000 in gross sales. The new provision could cause confusion and frustration for individuals who sell on platforms like eBay, Venmo, Facebook Marketplace, Etsy, etc.
The IRS has not provided clear guidance on how they'll address this confusion or the expected increase in paperwork.
One concern is that the new threshold might lead to taxpayers receiving a 1099-K form for non-taxable events, like selling personal goods for less than their purchase price or transferring money to family and friends through smartphone apps, or the issuer including other charges like shipping and handling in the gross amounts reported. It is important that you understand what is being reported by the issuer otherwise it may result in accidental overreporting of income.
Various legislative fixes have been proposed, but nothing is in place yet, and the new threshold is set to take effect at the year's end.
Comments
This will certainly impact those who are not dealers, but casual sellers. Good record keeping is necessary. Cheers, RickO