YAY!! IRS delays $600 threshold for 1099-K reporting

caannie

caannie

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IRS delays $600 threshold for 1099-K reporting

The lower threshold threatened to generate millions of new forms going out to unsuspecting taxpayers and their accountants.
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The Internal Revenue Service postponed the $600 threshold Friday for filing a Form 1099-K to report on transactions involving services such as eBay, PayPal, Venmo, Etsy and third-party settlement organizations, which was scheduled to take effect in the New Year and generate millions of new forms going out to unsuspecting taxpayers and their accountants.

Organizations such as the American Institute of CPAs, the National Association of Tax Professionals, the National Taxpayers Union and others had been sounding the warning about the lower threshold, which was down from $20,000 previously. It was included as part of the American Rescue Plan Act of 2021 as a way to raise extra tax revenue, and lawmakers in Congress were lobbied heavily to forestall the change or at least raise the threshold.

As a result of the delay, the IRS said third-party settlement organizations won't 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. In tandem with the announcement, the IRS released guidance Friday stating that calendar year 2022 will now be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations including Venmo, PayPal and CashApp that would have generated Form 1099-Ks for taxpayers.

IRS announces delay for implementation of $600 reporting threshold for third-party payment platforms’ Forms 1099-K | Internal Revenue Service

IR-2022-226, December 23, 2022 — 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.
www.irs.gov www.irs.gov
 
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#9
Thank goodness!
I just got the dreaded email last week from VC asking for my SS for tax purposes. I guess I assumed since they were a European company we wouldn't be subjected to the $600 threshold since they had never asked for our SS numbers before, but I guess since they acquired Tradesy now they're a US company. Thank goodness they delayed it. Between ebay, Poshmark & VC I was well over the $600 limit and wasn't looking forward to the extra work of having to prove I lost money on the sales.
 
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#10
iluvmybags said:
Thank goodness!
I just got the dreaded email last week from VC asking for my SS for tax purposes. I guess I assumed since they were a European company we wouldn't be subjected to the $600 threshold since they had never asked for our SS numbers before, but I guess since they acquired Tradesy now they're a US company. Thank goodness they delayed it. Between ebay, Poshmark & VC I was well over the $600 limit and wasn't looking forward to the extra work of having to prove I lost money on the sales.
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I'm over $600, but less than $5000... basically letting go of items that no longer match my personal style. And... a few impulse purchases that I made while on vacation in 2022. :lol: I think that $5000 is fair; $600 really hurts the occasional gig worker and those clearing old things out of their homes more than anyone else.
 
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#13
I was happy to hear this too. Unloading the rest of my Coach bags from my personal collection and also stuff around the house. When you get older you will understand “Getting rid of stuff around the house”. Now to get rid of my Hallmark collection this year! Although I can show I am going to lose a small fortune on it.
 
#15
holiday123 said:
Mercari is still asking me to enter my w9 information. Did anyone else add this or will they eventually remove this due to the delay?
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They harass me with periodic emails because I’m approaching the $600 limit. Last year I ignored them and stopped selling when they disabled selling on my account (a buyer tried to purchase something from me but Mercari needed my SSN to complete the sale as it would push me over $600; I decided to not provide the info and lose the $10 sale). I was able to resume selling after January 1st. I think they send automated emails when you get close to the $600 limit. #nottaxadvice

ETA: what upsets me is Paypal tried to get me to give them my SSN after I received a recent Rakuten cashback payment. This is NOT taxable income; it is a refund of money spent. I find PayPal’s practice of asking for SSN to be misleading. It’s likely an automated email, but still.
 
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