IRS Cancels $600
IRS Cancels $600 1099-K Reporting Threshold Requirement for 2023

IRS announces delay in Form 1099-K reporting threshold for third party platform payments in 2023.Following feedback from taxpayers, tax professionals and pay...

Source: IRS

The 1099-K Reporting Threshold Change

“Hello from Freedom Tax Accounting. Breaking news from the IRS: the IRS just made next year’s tax season a lot easier for a lot of people, especially 44 million people. Why? Let’s see the news.”

The Shift in 1099-K Reporting Requirements

“The IRS just made a news release that they are changing the rules for the 1099-K reporting threshold. This is going to affect a lot of people. In the past, platforms like PayPal, Venmo, eBay, and Shopify didn’t have to send you a 1099 form unless you made over $20,000 or had 200 transactions. A couple of years ago, the IRS wanted these platforms to report more income, so they set the threshold at $600.”

IRS’s Decision for the 2023 Tax Year

“For the 2023 tax year, the IRS is going to keep the $20,000 threshold. They expected that if they kept the $600 threshold, 44 million more people would receive a 1099-K. So, for 2023, the requirement is only if you sell over $20,000 or have more than 200 transactions.”

Future Plans for Reporting Threshold

“Starting in 2024, the IRS is planning for a threshold of $5,000 for the tax year 2024 as part of a phasing period. Eventually, they aim to get down to the $600 threshold.”


Conclusion and Recommendations

“This is good news and a great idea, as many third-party platforms were overwhelmed with the need to generate 44 million more 1099s. Remember, even if you don’t get a 1099, you should report any income on your tax return. Thank you for watching this video. If you receive valuable information, like it, share it with another business owner who can take advantage of this information. God bless you, bye-bye.”

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