FYI: Important Update on Tax Forms for IRS

on2legs

“The IRS has decided, in the absence of Congressional action, to delay for one year the implemtation of a law that requires payment and e-commerce platforms like PayPalPYPL, Venmo, CashApp, eBayEBAY and Etsy to file Form 1099-K (to taxpayers and the IRS) for anyone receiving over $600 in proceeds on their various platforms.”

Hopefully we get a permanent fix from Congress in 2023. 

https://www.forbes.com/sites/ambergray-fenner/2022/12/23/after-senate-fails-to-change-law-irs-grants-reprieve-to-1099-k-filing-requirement/amp/

1SunShower0

Thanks for posting this.  What would this mean for those who received 1099-k forms based off that new threshold last year already I wonder?  I received 1099 forms from Ebay and Paypal from 2021 sales (over $600 but well under $20,000) and filed them with my 2021 taxes, how is that possible if the IRS now claims they are delaying the new threshold?  This whole change is/was absolutely ridiculous.  

2-feign-reluctance

Yep, this is why I am done selling shit. It’s not some side hustle for me, but I’m getting lumped in with those folks. That’s unnerving. If I get any forms, I’m not doing anything with them in light of this news. 

on2legs

You shouldn’t get a 1099k form based on this info, but if you do you need to account for it on your tax return.  Otherwise you risk the IRS the sending you a cp2000 letter.  The letter will be a bill for the tax you owe as well as interest. 

on2legs

1SunShower0 said:

Thanks for posting this.  What would this mean for those who received 1099-k forms based off that new threshold last year already I wonder?  I received 1099 forms from Ebay and Paypal from 2021 sales (over $600 but well under $20,000) and filed them with my 2021 taxes, how is that possible if the IRS now claims they are delaying the new threshold?  This whole change is/was absolutely ridiculous.  

Did you have a lot of smaller sales? The 1099k is also triggered if you have over 200 transactions regardless of the amount.  

on2legs

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JOEJOEJOE

If you get a 1099, be sure to report on your tax return, however, also be sure to report the cost of goods sold to help lessen the tax related to the 1099 income.

1SunShower0

on2legs said:

1SunShower0 said:

Thanks for posting this.  What would this mean for those who received 1099-k forms based off that new threshold last year already I wonder?  I received 1099 forms from Ebay and Paypal from 2021 sales (over $600 but well under $20,000) and filed them with my 2021 taxes, how is that possible if the IRS now claims they are delaying the new threshold?  This whole change is/was absolutely ridiculous.  

Did you have a lot of smaller sales? The 1099k is also triggered if you have over 200 transactions regardless of the amount.  

Apparently IL and NJ send a 1099 for anything over $1000.  I moved to IL in 2020 so received the 1099 based off IL threshold.  

Gern Blansten

2-feign-reluctance said:

Yep, this is why I am done selling shit. It’s not some side hustle for me, but I’m getting lumped in with those folks. That’s unnerving. If I get any forms, I’m not doing anything with them in light of this news. 

yeah like 2legs said...if you get a 1099 don't ignore it. If you don't want to pay tax on it just report an expense equal to the income. If you ignore it they will bill you for tax/interest/penalty in a few years and it will be a pain in the ass.

foodshop65

everyone's getting 1099s in January 24. all these companies have to send them over $600 for 23. shouldn't be a big deal with anyone cause paying more taxes is fun! Yeah government

danofun

on2legs said:

“The IRS has decided, in the absence of Congressional action, to delay for one year the implemtation of a law that requires payment and e-commerce platforms like PayPalPYPL, Venmo, CashApp, eBayEBAY and Etsy to file Form 1099-K (to taxpayers and the IRS) for anyone receiving over $600 in proceeds on their various platforms.”

Hopefully we get a permanent fix from Congress in 2023. 

https://www.forbes.com/sites/ambergray-fenner/2022/12/23/after-senate-fails-to-change-law-irs-grants-reprieve-to-1099-k-filing-requirement/amp/

foodshop65 said:

everyone's getting 1099s in January 24. all these companies have to send them over $600 for 23. shouldn't be a big deal with anyone cause paying more taxes is fun! Yeah government

F Me In The Brain

This cover stubhub sales as well?

on2legs

F Me In The Brain said:

This cover stubhub sales as well?

It’s supposed to cover all the 3rd party payment processing sites so Stubhub should be included. 

danofun

F Me In The Brain said:

This cover stubhub sales as well?

The threshold is not sales channel specific. The remaining question is which companies will still send a 2022 1099 to those who fall short of the 200/$20,000 mark?

foodshop65

danofun said:

F Me In The Brain said:

This cover stubhub sales as well?

The threshold is not sales channel specific. The remaining question is which companies will still send a 2022 1099 to those who fall short of the 200/$20,000 mark?

No one will because they don’t have to for 22, it’s was suspended because they didn’t have their act together 

danofun

foodshop65 said:

danofun said:

F Me In The Brain said:

This cover stubhub sales as well?

The threshold is not sales channel specific. The remaining question is which companies will still send a 2022 1099 to those who fall short of the 200/$20,000 mark?

No one will because they don’t have to for 22, it’s was suspended because they didn’t have their act together 

It’s a very interesting situation. A law was passed and the IRS delayed its launch because they, not the payment processors, are ill prepared to handle the volume of additional work that will be required. At least that’s my understanding.

This is a one year stopgap. As @on2legs stated in the OP, “Hopefully we get a permanent fix from Congress in 2023.”

SHZA

foodshop65 said:

danofun said:

F Me In The Brain said:

This cover stubhub sales as well?

The threshold is not sales channel specific. The remaining question is which companies will still send a 2022 1099 to those who fall short of the 200/$20,000 mark?

No one will because they don’t have to for 22, it’s was suspended because they didn’t have their act together 

They don't have to but some still might. I received one for ebay for 21 and was nowhere close to 20k or 200 transactions 

Get_Right

I suspect this may include StockX as well. And you need to support your cost basis and related expenses if want to offset the tax due.  Not necessarily hard, but something you have to do. I had an inquiry on a $2000 deduction/credit for 2021 andit was a major hassle.

SHZA

SHZA said:

foodshop65 said:

danofun said:

F Me In The Brain said:

This cover stubhub sales as well?

The threshold is not sales channel specific. The remaining question is which companies will still send a 2022 1099 to those who fall short of the 200/$20,000 mark?

No one will because they don’t have to for 22, it’s was suspended because they didn’t have their act together 

They don't have to but some still might. I received one for ebay for 21 and was nowhere close to 20k or 200 transactions 

I received a 1099 from ticketmaster for 2022. A few thousand in payments but nowhere close to 20k. I think it's almost all Pearl Jam F2F sales so it should be a wash for tax purposes. 

RS65573

I got one from ebay, no where near 20k or 200 items, however I believe in NJ you still must file the form for 2022.

Im very interested to see where I can put the cost of those items in turbotax or if it even prompts for this obvious money grab. 0 chance I pay 1 cent in taxes on this shit.

on2legs

SHZA said:

SHZA said:

foodshop65 said:

danofun said:

F Me In The Brain said:

This cover stubhub sales as well?

The threshold is not sales channel specific. The remaining question is which companies will still send a 2022 1099 to those who fall short of the 200/$20,000 mark?

No one will because they don’t have to for 22, it’s was suspended because they didn’t have their act together 

They don't have to but some still might. I received one for ebay for 21 and was nowhere close to 20k or 200 transactions 

I received a 1099 from ticketmaster for 2022. A few thousand in payments but nowhere close to 20k. I think it's almost all Pearl Jam F2F sales so it should be a wash for tax purposes. 

There’s a bunch of states that have very low thresholds for reporting like the currently unenforced federal regulation.  If you live in one of those states that could be what triggered you to receive one.