Just recently, in its IR-2022-226 dated December 23, 2022, the IRS announced the delay in the implementation of the $600 reporting threshold for third party payment platforms’ Form 1099 K.
This means that Payment Settlement Entities (PSEs) will not be required to report tax year 2022 transactions on a Form 1099 K for the lower $600 threshold enacted as part of the American Rescue Plan of 2021.
However, the PSEs shall issue the Form 1099 K for those transactions whose:
- Gross payments exceeded $20,000.00 and
- More than 200 transactions
Calendar year 2022 will be a transition period for the lowered threshold and the delay in the implementation will give the taxpayers more time to prepare and familiarize with the rules for Form 1099 K.
IRS Form 1099-K, Payment Card and Third-Party Network Transactions, is an IRS information return issued for payments made in settlement of reportable payment transactions using any of the following:
- Debit cards, credit cards, stored-value cards (gift cards)
- Third party-network providers like Venmo, PayPal, Stripe, Shopify etc.
Generally, 1099s should serve only as verification tools of your gross receipts. It is always best practice to keep accurate records of all our business income and expenses.
At 1099 Accountant, we are your online bookkeeping, tax and accounting service firm and we will help you with your bookkeeping and tax filing while you go about your business.
Contact us at (855)529-1099, or make an appointment at https://1099accountant.com/contact/ or send us an email at help@1099accountant.com. We love referrals.
