In a last minute about face, the IRS is rolling back the
requirement for third-party payment providers to issue 1099-Ks for anyone
receiving payments over $600 in 2022. They are moving the reporting
requirement back to $20,000 in activity and 200 or more transactions as
they transition to the lower threshold in 2023.
Why the change
The
bottom line? The IRS is not ready to figure out how to automate the
auditing of those under-reporting their income from things like Ebay, Esty
and Amazon sales or from sales of tickets and other goods through payment
systems like Venmo and Ticketmaster.
What does not change
While
this last-minute change may keep you from receiving a 1099-K this year,
don’t count on it. Many providers are already geared up to send them out
and will probably do so, since the IRS reprieve in reporting is temporary.
So keep your eyes open for these forms throughout January and early
February.
While
the IRS informational return reporting is temporarily changing, what is not
changing is your requirement to report this income. So if you have
activities that provide income to you, including your side hustle buying
and selling event tickets, that activity is reportable on your tax return.
Stay tuned
In
further developments, Congress is up to their old tricks in changing the
rules at the end of the year. Preliminary review, of the yet unsigned bill,
indicates the major changes will impact 2023 and beyond. So stay tuned,
future tax tips will lay out the basic tax law changes and how you can take
advantage of them.
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