The IRS has delayed, for a year, when payment services like Paypal and Venmo and e-commerce companies such as eBay, Etsy and Poshmark will have to issue tax forms to individuals whose business transactions through those platforms exceed $600.
The agency on Friday said that such third-party platforms won't have to use that threshold for when they report 2022 tax-year transactions on a Form 1099-K, which goes to both the IRS and taxpayer. Instead, they can rely on pre-2022 threshold of more than 200 transactions worth an aggregate above $20,000.
The American Rescue Plan Act of 2021 dropped the threshold to just $600. And even a single transaction can trigger a form.
More from Personal Finance:
Here are 10 ways to avoid the early withdrawal penalty for IRAs
Wells Fargo settlement includes $2 billion for wronged customers
These are the 10 best metro areas for first-time homebuyers
"To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes," Doug O'Donnell, acting IRS commissioner said in a statement.
"The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements."
The agency said it will issue additional details on the delay, as well as guidance for taxpayers who may have already received a 1099-K as a result of the American Rescue Plan changes.
Even without the new reporting requirement in place, income from business transactions through such platforms is still taxable — meaning sellers must report it. The delay only means business activity won't generate a 2022 tax form at that low threshold.
Tax pros had 'deep concerns' about the $600 threshold
Tax professionals and consumers are likely to cheer the delay.
Tax pros had flagged the lower tax reporting threshold as a possible pain point for filers, with the risk of receiving 1099-Ks for personal transfers on platforms like Venmo and PayPal, such as gifts or reimbursements.
"As tax preparers, we are more or less expecting the worst," Albert Campo, a certified public accountant and president of AJC Accounting Services in Manalapan, New Jersey, told CNBC earlier this month.
"We're expecting most of our clients to get these things," he said. "So we're trying to be proactive in addressing it."
Last week, the American Institute of CPAs shared "deep concerns" about the $600 tax reporting threshold in a letter to the Senate Finance Committee and the House Ways and Means Committee.
The professional group said it supported a National Taxpayers Union Foundation recommendation to raise the threshold to "a level sufficient to exempt casual or low-level online activity."
AICPA said even a $5,000 threshold would be "significant progress."
CNBC's Kate Dore and Kelli Grant contributed reporting.
"payment" - Google News
December 24, 2022 at 03:57AM
https://ift.tt/Wotu0iI
IRS delays tax reporting change for 1099-K on Venmo, Paypal business payments - CNBC
"payment" - Google News
https://ift.tt/pvQlnEq
https://ift.tt/xcZjV2y
Bagikan Berita Ini
0 Response to "IRS delays tax reporting change for 1099-K on Venmo, Paypal business payments - CNBC"
Post a Comment