New Form 1099-K reporting requirements – Be ready for many more of these forms!

29 Aug New Form 1099-K reporting requirements – Be ready for many more of these forms!

Get ready for many more of these tax reporting forms coming to your business soon!  What should you do?  Prior to calendar year 2022 the threshold for a reporting agency to remit Form 1099-K to the seller and the IRS was either $20,000 or more per calendar year in gross transactions or 200 or more transactions per calendar year per business or individual selling items through third-party networks and via credit and other payment card transactions.  These third-party networks include Ebay, PayPal, Amazon, Venmo, etc. and credit and other payment card transactions include credit cards, debit cards or stored-value cards. This threshold for reporting has now changed.  Now, starting 2022, that threshold for issuing 1099-K Forms has dropped to only $600 or more per year in gross transactions with any number of transactions.  The IRS has been matching the gross transaction dollar amounts reported on Form 1099-K to tax returns recently.  We expect many more Form 1099-K tax returns to be remitted to our clients, by these payment card and third-party network transaction vendors, due to these large decreases in reporting thresholds.  Be on the lookout for an increasing number of 1099-K Forms being sent to you, and make sure to provide all of them to us next tax season if you are a business selling goods or services settled through a third-party network.  For a further understanding about you Form 1099-K please visit https://www.irs.gov/businesses/understanding-your-form-1099-k.