IRS delays 1099-K reporting req to 2024

[cathy63]

The IRS has officially delayed the implementation of the ARP requirement for 3rd party payment processors to issue 1099-Ks to anyone who has over $600 in business transactions in a year.

https://www.irs.gov/newsroom/irs-an...d-of-5000-for-2024-to-phase-in-implementation

As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year. This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn't expect one and may not have a tax obligation. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.

Given the complexity of the new provision, the large number of individual taxpayers affected and the need for stakeholders to have certainty with enough lead time, the IRS is planning for a threshold of $5,000 for tax year 2024 as part of a phase-in to implement the $600 reporting threshold enacted under the American Rescue Plan (ARP).

 

[freedomatlast]

I hadn't seen this. Thanks for posting.

 

[MichaelB]

Thanks for the heads up

 

[gauss]

Thanks Cathy63,

Good to know at this point in the game.
-gauss

 

[disneysteve]

Another year for people to cheat on their taxes. Great.

Now for all of the posts to start in my reselling groups.

 

[ownyourfuture]

Great news for people who use PayPal, Venmo, sell on eBay, etc. *1099-K*

Hopefully someone hasn't already posted this

Someone reported this on CNBC yesterday morning.

The obstacle comes from a revised portion of the tax code included in President Biden’s American Rescue Plan of 2021, which requires sellers to report transactions over third-party networks that exceed $600 — a considerable shift from the previous $20,000 threshold.

UPDATE 11/21/2023: IRS issues revised Form 1099-K reporting guidance & tax Fact Sheet.

On November 21, 2023, the IRS issued Notice 2023-74 delaying the requirement for third-party electronic payment networks to report transactions over $600 to the IRS on a Form 1099-K, Payment Card & Third Party Network Transactions, until 2025.

The $20,000 & 200 transactions thresholds remain in place until December 31, 2023, & will then decrease to $5,000 for the 2024 tax year.

https://thehill.com/policy/equilibr...-sellers-balk-at-new-tax-reporting-threshold/

I'm hoping once we get closer to 2025, they decide to leave it at $5,000
I'm all for people paying their fair share of taxes, but the $600 threshold is/was ridiculous IMHO. I'm sure the average garage sale brings in more than that, & I'm reasonably sure people don't report the proceeds from those. OTOH, if you decide to have that garage sale via eBay or something similar, a 1099-K is generated.

A big thank you to whoever is responsible for convincing the IRS to back off

 

[MichaelB]

Threads merged

 

[ownyourfuture]

Threads merged

Thanks Michael.
I did a search to see if anyone had already posted the news, but somehow missed it.

 

[Montecfo]

Another year for people to cheat on their taxes. Great.

Now for all of the posts to start in my reselling groups.

Well every year is a year people cheat on their taxes. The $20K threshold is a good place to start IME.

And of course everyone can voluntarily report, and in fact they should, it is taxable income.

 

[cathy63]

...I'm hoping once we get closer to 2025, they decide to leave it at $5,000...

In order to leave the threshold at $5K, the tax code has to be changed. This decision is not up to the IRS, they just implement the laws that Congress writes. They've chosen to implement this requirement in a step-wise fashion $20K --> $5K --> $600, but they can't sit on the $5K step forever. It really depends on whether the next Congress has an appetite for rewriting this part of the code or not.

 

[disneysteve]

Well every year is a year people cheat on their taxes. The $20K threshold is a good place to start IME.

And of course everyone can voluntarily report, and in fact they should, it is taxable income.

Of course they should, but they don't. That's the issue.


The problem I have with the 20K threshold, or even the 5K threshold, is that as an active ebay seller who does everything by the book, I'm competing against sellers who ignore the law and don't pay taxes. Those folks can sell things cheaper than I can because I need to account for the tax owed on the sale and they don't.


I'm 100% in favor of the $600 threshold, and actually a number of states have already adopted it so the Fed delay doesn't even matter. I'm in NJ and our threshold is already $1,000 so I got a 1099-K last year even though the Fed didn't require it. I'm perfectly fine with that. It's as it should be.

 

[rk911]

IRS cancels gig worker tax reporting this year

Some good news for some people from the IRS.

https://justthenews.com/politics-policy/regulation/irs-cancels-gig-worker-tax-reporting-year-after-democrats-pushed

 

[Ian S]

Good news for tax cheats maybe.

 

[Markola]

I wouldn’t trust that site to tell me what day of the week it is.

 

[gauss]

Prior thread from earlier this week on this:

https://www.early-retirement.org/forums/f28/irs-delays-1099-k-reporting-req-to-2024-a-120000.html

-gauss

 

[MichaelB]

Threads merged