The Internal Revenue Service revised its frequently asked questions on the Form 1099-K to alleviate confusion this filing season.
The Form 1099-K has been of particular concern in recent years after the threshold for reporting transactions from payment cards and third parties like eBay, Venmo, PayPal and Airbnb was lowered from $20,000 to $600 as a result of the American Rescue Plan Act of 2021. That was expected to produce millions more 1099 forms being sent last year to unsuspecting taxpayers, but the IRS has moved to
To reduce the uncertainty about the requirements, the IRS posted a new
After hearing feedback from taxpayers, tax professionals and payment processors, and to reduce taxpayer confusion, the IRS issued
The IRS is still working to implement the new law, but it’s treating 2023 as another transition year. As a result, 1099-K reporting won’t be required unless a taxpayer receives over $20,000 and has more than 200 transactions in 2023, although taxpayers may still receive a form for amounts less than the required reporting amount.
The updates to the FAQs contain substantial changes within each section:
- General Information;
- What to Do If You Receive a Form 1099-K;
- Common Situations;
- Third Party Filers of Form 1099-K; and
- Should My Organization Be Preparing, Filing and Furnishing Form 1099-K?
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