This Thanksgiving, let us give Thanks to the IRS for Form 1099-K Changes announced on Nov 21, 2023

Yesterday, we informed you about the American Rescue Plan of 2021, dramatically reducing the Form 1099-K reporting threshold to gross payments that exceed $600 (down from $20,000 for tax year 2022 and prior years) for tax year 2023 onwards in addition to removing the minimum transaction requirement of 200.

We have better news to share & brighten your Thanksgiving holidays with family & friends!

Please DISREGARD the write-up titled “2023 Form 1099-K – Do I need to report it?”

Why? — Because the IRS has announced on Nov 21, 2023 that it would delay the new $600 Form 1099-K reporting threshold.

Calendar Year 2023 will be an additional transition period

Payment card companies, payment apps (venmo, paypal etc.) and online marketplaces (amazon, ebay, etsy etc.) are not required to file 2023 Form 1099-K with the IRS nor send a copy to taxpayers for the lower $600 threshold amount.

For reporting the 2023 transactions, the existing $20,000/200 transaction threshold will remain in effect.

Who Should Get Form 1099-K for 2023 Tax Year?

Taxpayers receiving payments for items sold (including personal items), services provided or property rented that meet the $20,000/200 transaction threshold.

Third party settlement organizations that have performed backup withholding for a payee during calendar year 2023 must file a Form 945 and a Form 1099-K with the IRS and furnish a copy to the payee if total reportable payments to the payee exceeded $600 for the calendar year.

Note: Gifts or reimbursement of personal expenses from friends and family should not be reported on Form 1099-K since they are not payments for goods or services.

Threshold changes in the works…

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 of 2021.

What to do with 2023 Form 1099-K?

Taxpayers should be aware that while the reporting threshold remains over $20,000 and 200 transactions for 2023, companies could still issue the form for any amount. If you receive the 2023 Form 1099-K, use it with your other tax records to figure and report your correct income on your tax return.

Receiving a Form 1099-K for a Personal Item sold at a gain?

Receiving a Form 1099-K for a Personal Item sold at a loss?

Receiving a Form 1099-K in error?

Receiving a Form 1099-K with incorrect information?

Your HM&M advisor has the answers. Please contact us with any questions.