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FYI: Big 1099-K Reporting changes for US sellers in 2022

shorty4568shorty4568 Posts: 176
edited January 2022 in Lost Dogs
I wanted to give everyone a heads up about changes for people accepting paypal and venmo for goods and services this year. Be smart and keep good records so you don't have a heart attack next year at tax time. 

Beginning in 2022, the new gross payment threshold is $600. Going forward, this means that you are required to file a 1099-K form and report it to the IRS if you exceed $600 of transactions in a year. A big change from 20K

https://newsroom.paypal-corp.com/2021-11-04-New-US-Tax-Reporting-Requirements-Your-Questions-Answered
Post edited by shorty4568 on

Comments

  • DRintheHouseDRintheHouse Posts: 190
    Any tax savvy folks to confirm?:  no issues sending/receiving via friends and family up to the $16k gift limit from one individual to another?
  • Go AnimalGo Animal Posts: 5,618
    DRintheHouse said:
    Any tax savvy folks to confirm?:  no issues sending/receiving via friends and family up to the $16k gift limit from one individual to another?
    I think they're on to the whole Gift loophole. If you take any sum of money over $50 on a frequent basis via a digital wallet of some sorts, I'd keep records.
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  • TH113769TH113769 Posts: 439
    DRintheHouse said:
    Any tax savvy folks to confirm?:  no issues sending/receiving via friends and family up to the $16k gift limit from one individual to another

    DR - no issues on friends and family - nothing will be reported.  It's just goods and services and even if you get a 1099-K you then reduce the income by your cost basis of what you sold.  It does really suck from a record keeping standpoint - you were a smart man to sell last year.  Sincerely, your laundry room landlord.  
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  • mace1229mace1229 Posts: 9,268
    I’m curious how strictly this is going to be enforced, since you’re also required to claim stolen goods and drug deals on your taxes too. Is PayPal going to be sending a 1099 or some other form to the IRS? That’s the only way it would be enforced.
  • on2legson2legs Standing in the Jersey rain… Posts: 14,951
    mace1229 said:
    I’m curious how strictly this is going to be enforced, since you’re also required to claim stolen goods and drug deals on your taxes too. Is PayPal going to be sending a 1099 or some other form to the IRS? That’s the only way it would be enforced.
    Yes… they’re going to send it to the IRS and to the individual. 
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  • Jimmydean55Jimmydean55 Posts: 1,280
    This law started a year or two ago in IL, so I try to sell via Friends & Family as much as possible. Keep a record of who you have sold to as they can be used as references so the buyer knows you’re legit. It helps calm peoples nerves about paying F&F when it comes for bigger ticket items. 
  • Merkin BallerMerkin Baller Posts: 11,076
    MA has had this $600 threshold for some time now. 
  • tempo_n_groovetempo_n_groove Posts: 40,132
    The $600 law was always there it was just never enforced.  W the rise of online sales the Gov't is forcing these money changing companies to make us all honest.
  • PJamminPJammin Posts: 606
    Jimmydean55 said:
    This law started a year or two ago in IL, so I try to sell via Friends & Family as much as possible. Keep a record of who you have sold to as they can be used as references so the buyer knows you’re legit. It helps calm peoples nerves about paying F&F when it comes for bigger ticket items. 
    This is true. I'm also in IL and was shocked to get a 1099 last year from Paypal for like $7500 in crap sold on Ebay. You just offset most of it with a cost of goods sold amount close to the income on the 1099 and you're good. 
  • on2legson2legs Standing in the Jersey rain… Posts: 14,951

    1996: Randall's Island 2  1998: East Rutherford | MSG 1 & 2  2000: Cincinnati | Columbus | Jones Beach 1, 2, & 3 | Boston 1 | Camden 1 & 2 2003: Philadelphia | Uniondale | MSG 1 & 2 | Holmdel  2005: Atlantic City 1  2006: Camden 1 | East Rutherford 1 & 2 2008: Camden 1 & 2 | MSG 1 & 2 | Newark (EV)  2009: Philadelphia 1, 2 & 4  2010: Newark | MSG 1 & 2  2011: Toronto 1  2013: Wrigley Field | Brooklyn 2 | Philadelphia 1 & 2 | Baltimore  2015: Central Park  2016: Philadelphia 1 & 2 | MSG 1 & 2 | Fenway Park 2 | MSG (TOTD)  2017: Brooklyn (RnR HOF)  2020: MSG | Asbury Park  2021: Asbury Park  2022: MSG | Camden | Nashville  2024: MSG 1 & 2 (#50) | Philadelphia 1 & 2 | Baltimore


  • StardogChamp79StardogChamp79 Posts: 1,011
    https://www.cnet.com/personal-finance/taxes/taxes-on-venmo-cash-app-paypal-do-you-report-that-money/
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  • BIGDaddyWilBIGDaddyWil Michigan Posts: 3,065
    ^^^^^^Thanks!
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