Latest Newsletter Edition
IRS Delays Implementation of New Rules for 1099-K Forms
Under a new rule enacted in 2021, third-party payment processors must issue a Form 1099-K to any individual who receives $600 or more in payments for goods or services during a year. However, IRS officials have noted that this rule could cause widespread confusion, since many transactions completed through online payment platforms have no tax impacts. Examples of non-taxable transactions include settling up with friends and selling used personal items.
Therefore, the IRS will not enforce the new rules for tax year 2023. Instead, third-party payment processors may operate under the prior rules, only sending 1099-K forms to users who received over $20,000 in payments through over 200 transactions. In addition, 2024 will serve as a phase-in year, with the 1099-K reporting threshold set at $5,000. Full implementation of the $600 threshold will not occur until at least 2025.
A.P.T. Services P.L.L.C.
Accounting, Payroll, and Tax Services
7670 E. Broadway Blvd, Ste. 280
Tucson, AZ 85710
Phone: (520) 300-4971
Fax: (520) 885-2466