Warning to Sellers: New $600 threshold for third-party payment reporting, IRS.
- UPDATED 2024 June- see NOTE below Paul's post!
People, who sell meteorites, need to remember there is a new $600 threshold for reporting on IRS Form 1099-K for third-party payments.
IRS warns taxpayers about new $600 threshold for third-party payment reporting.
Kate Dore, CFP®, CNBC
https://www.cnbc.com/2022/11/23/heres-why-you-may-get-form-1099-k-for-third-party-payments-in-2022.htmlThere is a bill in Congress that would change it to 5,000 dollars.
S.3840 - Cut Red Tape for Online Sales Act
https://www.congress.gov/bill/117th-congress/senate-bill/3840“This bill modifies requirements for third party settlement organizations to eliminate their reporting requirement with respect to the transactions of their participating payees unless they have earned $5,000 or more. A third party settlement organization is the central organization that has the contractual obligation to make payments to participating payees (generally, a merchant or business) in a third party payment network.”
Yours,
Paul H.
NOTE- I HAVE FOUND ONLINE AS OF 2024 JUNE- LMH...TOKYO
For tax year 2023, payment apps and online marketplaces are required to file a 1099-K for personal or business accounts that receive over $20,000 in payments from over 200 transactions for goods or services. There are no changes to what counts as income or how tax is calculated. -Mar 13, 2024
https://www.irs.gov/businesses/understanding-your-form-1099-k#:~:text=Back%20to%20top-,Reporting%20threshold,or%20how%20tax%20is%20calculatedIf you used a payment app or online marketplace and received a Form 1099-K
A payment app or online marketplace is required to send you a Form 1099-K if the payments you received for goods or services total over $20,000 from over 200 transactions. However, they can send you a Form 1099-K with lower amounts. Whether or not you receive a Form 1099-K, you must still report any income on your tax return.
This includes payments for any:Goods you sell, including personal items such as clothing or furniture
Services you provide
Property you rent
The payments can be made through any:Payment app
Online community marketplace
Craft or maker marketplace
Auction site
Car sharing or ride-hailing platform
Ticket exchange or resale site
Crowdfunding platform
Freelance marketplace
If you accept payments on different platforms, you could get more than one Form 1099-K.
Personal payments from family and friends should not be reported on Form 1099-K because they are not payments for goods or services.
https://www.irs.gov/businesses/understanding-your-form-1099-k#:~:text=Back%20to%20top-,Reporting%20threshold,or%20how%20tax%20is%20calculated.https://www.irs.gov/businesses/understanding-your-form-1099-k#:~:text=Back%20to%20top-,Reporting%20threshold,or%20how%20tax%20is%20calculated
