Updated: Nov 23, 2023
"IR-2023-221, Nov. 21, 2023 — Following feedback from taxpayers, tax professionals and payment processors and to reduce taxpayer confusion, the Internal Revenue Service today released Notice 2023-74 announcing a delay of the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023."
The IRS will continue to provide information on IRS.gov/1099k.
*Note that 2024 threshold will be lowered to $5000 & 2025 threshold will begin at $600.
What does this mean? If you use apps like Venmo, cashapp, or PayPal, the IRS requires that these third party vendors to submit a form (1099k) to the IRS for anyone that has more than 200 transactions or more than $20,000 in transfers.
The IRS has postponed their original downward shift to the threshold (of $600) until 2025, increasing to $5000 in 2024.
How can I avoid this all together? If you are using a third-party app for business related purchases, you can't, however if you are using it for personal uses you will receive a 1099k should be prepared to document your purchases.
Reach out to your Hometown Accountant today for more info. Shelley H. Morales is your Hometown Accountant
352-358-1413 info@hometownaccountant.com