Posted on 11/26/2022 2:32:48 PM PST by TigerClaws
The IRS on Tuesday shared tips for the upcoming tax season — including a reminder about the new $600 threshold for receiving Form 1099-K for third-party payments.
The change applies to payments from third-party networks, such as Venmo or PayPal, for transactions such as part-time work, side jobs or selling goods, according to the IRS.
Before 2022, the federal Form 1099-K reporting threshold was for taxpayers with more than 200 transactions worth an aggregate above $20,000. However, Congress slashed the limit as part of the American Rescue Plan Act of 2021, and a single transaction over $600 may now trigger the form.
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Aimed at closing the tax gap — a top priority of the Biden administration — the provision is estimated to bring in $8.4 billion from fiscal year 2021 to 2031, according to the Joint Committee on Taxation.
"It's going to be a new form for a lot of people," said Adam Markowitz, an enrolled agent and vice president at Howard L Markowitz PA, CPA in Windermere, Florida. "And the worst thing they can do is ignore it." Who may receive Form 1099-K for 2022
Companies file Form 1099-K, known as an "information return," annually to report credit card and third-party payments, with a copy going to taxpayers and the IRS.
Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida, said the business income on your return must include what's reported on Form 1099-K. Otherwise, you may trigger an automatic IRS notice or even an audit, he said. The challenge with the new lower threshold amount of $600 for Form 1099-K is that personal payments and reimbursements could be incorrectly reported as taxable transactions. Justin Miller national director of wealth planning at Evercore Wealth Management
It's possible you'll receive Form 1099-K for transactions you don't expect, such as reselling Taylor Swift tickets at a profit, for example, warned Justin Miller, national director of wealth planning at Evercore Wealth Management in San Francisco.
But selling items at a loss, such as used furniture, may be less clear.
"Obviously, if you sell a $2,000 couch for $1,000, there's not taxable transaction there," Markowitz said. "You don't get a capital loss for it, and you don't have a gain." What happens if you get a 1099-K by mistake
Although the change aims to collect taxes on income, not personal transactions, experts say it's possible some filers may receive Form 1099-K by mistake.
"The challenge with the new lower threshold amount of $600 for Form 1099-K is that personal payments and reimbursements could be incorrectly reported as taxable transactions," Miller said.
A frequently asked questions page from the IRS says you shouldn't receive Form 1099-K for personal transfers, such as reimbursements for splitting meals, gifts or allowances.
However, if you receive the form for personal transactions, the agency says to contact the issuer for a correction. If the company doesn't fix the error, you can attach an explanation to your tax return while reporting your income correctly, the IRS says.
$600 for Mom sending $ to a college kid. Paying the babysitter. Paying the lawn boy.
All tax consequences now - for those with a 'low social credit score.'
This is really going to suck.
Does this Audit include a free Rectal exam?
I am just assking for my friend Brandon Hunter.
Communism rearing it’s ugly head
Another step toward CBDC, total control.
“You paid that guy $500 cash to fix your fence??? CRIMINAL!! Get a lawyer! The DOJ is bringing charges!”
[One of the 87,000 new IRS agents found this out, BTW.]
Meanwhile, Sam Bankman Fried [FTX], 30+ billion dollars GONE, lounges on the beach outside his mansion in the Bahamas....No calls for extradition, NOTHING.
As millions walk freely across the Mexican border, to get on DHS buses to your town....
Where they will be ahead of you in every line for every service.
It’s been $600 a year for YEARS!
CNBC are idiots. I managed accounting offices in big hotels in 90s and 2000 to 2012. We had to send and file 1099s for any contractor over $600. Had a special program and filed through ADP.
They must be talking private transactions but those were always “technically” supposed to be reported but who even knows that.
The government is out of control if they want an extra $10 on $600. My mom makes more dog sitting than baby sitting. No one sends her a 1099.
That is NOTHING over a 10 year period. Biden gives more than that to the Ukraine every friggin week. So for a pittance, they are going to press their jack boots into the necks of honest citizens, intruding into our lives in unacceptable ways.
Where is the 4th Amendment? Where is SCOTUS? "Oh, Miss Amy she don't know nothin' 'bout no 4th Amendments … jes li'l chilluns … an' designer fambleys …"
American Rescue Plan Act of 2021, and a single transaction over $600 may now trigger the form.
—
Flick’s Rule of Reverse Meaning: Every law passed by Congress means the exact opposite of its title.
eff the Fake Government.
Different 1099. That 1099 is if you at someone for work more than $600. The 1099-K means you’ve received $600 or more in payments.
Good luck on them getting compliance on this petty garbage.
You explained it awfully well. You can literally f-ck little girls or boys on an island 10-20=30x with Presidents, CEO’s and royalty and do no time. The First Crackhead can bang his niece while funding the Wuhan labs and getting a kickback with dozens of SAR’s with not a peep.
Trump keeps a signed cocktail napkin in his keepsakes and Garland raids his home.
Nancy and thousands of FedGov workers in agencies know where the funding goes and invest in those companies with APPROVAL of the ethics board of the unions/government.
All these things land you in the clink for years, they are afforded these luxuries. Like missing a Congressional hearing for a vacation on a private, government-supplied jet like Wray did.
Until the border is sealed and the maggots are jailed, nothing will stop. Mark on the Beast incoming.
The Inflation Reduction Act = causes inflation.
Gender Affirmation Surgery = denial of gender.
Goes on and on with libs.
Family Protection Act = destruction of families and targeting of any religious group that objects.
Was thinking the same thing. Small business, use quick books, it auto-generated the 1099s every year based on downloaded tax tables.
Hopefully people will just ignore this like they did the mileage tracking requirement 20 or so years ago.
I eventually was scrapped.
Holy crap. They’re actually doing it.
.
All those $3.5 and $5 Million dollar payments are going to hit Hunter and brother James Biden bad.
After 2024 they will be reducing the taxable requirement to 50 cents...
Those 87,000 IRS Gestapo agents will be very busy...
The government class dictatorship is sealing in its power hold on the peasants.
“ Holy crap. They’re actually doing it.”
Probably the exact words that will be uttered when they ship people off to relocation centers for not getting chipped.
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