A Form 1099-K is an information form typically provided to freelancers or small business owners who receive payments of income from a client via a third-party payment system (e.g., Venmo, PayPal, or Cash App) and it is often considered self-employment income. However, with the convenience of Venmo, PayPal, or Cash App, many individuals pay personal expenses as well as payments associated with goods and services with these apps.
For example, think about a group of friends who regularly has lunch or dinner together and one person pays the bill. After the meal, the friends send reimbursement through Venmo. Unless the account or payment is designated as personal, it will trigger a reporting requirement if the annual amount exceeds $600. The person receiving the funds could receive a Form 1099-K, and the IRS will expect to see that income reported on his or her tax return. Payments incorrectly classified as business (goods or services) will trigger a Form 1099-K. If a taxpayer believes it is not taxable and does not include the amount on his or her tax return, it will create a mismatch with IRS systems potentially triggering an IRS notice of adjustments and penalties. If not taxable, taxpayers will be required to provide support as to why the payments should not be included in income. Lowering the threshold from $20,000 to $600 substantially increases the number of Forms 1099-K that will be issued. The postponement should provide taxpayers additional time to familiarize themselves with the rules and, more importantly, to properly identify personal versus business payments to prevent misidentified payments being reported on a Form 1099-K at year-end. 6park.com
---------------------------- 6park.com
The IRS is delaying lowering the threshold for Form 1099-K reporting by a year. The $20,000 and 200 transactions thresholds remain in place through December 31, 2023.
 6park.com


贴主:jmzjmz于2023_01_10 10:19:12编辑