Last year, buried in one of the stimulus bills that gave millions of dollars to American taxpayers, there was a provision that would guarantee even more tax revenue. It was that there would be a 1099K issued to everyone for income over $600 in a year from third-party platforms like PayPal, Venmo, Etsy, and all other similar platforms.
Good News: IRS Delaying $600 Reporting Rule
That was a disaster for many, and not just because the threshold had been lowered from $20,000 to $600. It was a disaster due to the amount of confusion and extra work it was going to create for both taxpayers and accountants. Imagine getting 1099-K reporting forms from PayPal because people had paid you a total of $605 in a year – and you didn’t realize it and you weren’t looking for it!
Well, the IRS has listened to all of this and has announced a delay on the law requiring 1099-Ks being sent for money over $600 received on third-party platforms. You can read all about it here, at the IRS website.
This does not mean that you don’t owe taxes on money received via these platforms. It just means that these things will not be reported to the IRS and it is up to you to file any profits received through these platforms. Just to note – if you receive money, through PayPal for example, that comes as Friends and Family, it doesn’t apply for the 1099-K limit.
So, you won’t have to worry about waiting for these forms for this tax year. The delay is kicking this ball down the road until next year. To be clear, this means that if you receive money via these platforms in 2023, you will receive forms in early 2024 that apply to the 2023 tax year. That is, unless the IRS kicks it down the road again (you know, like the US government keeps kicking the REAL-ID ball down the road!).
What’s tax policy have to do with travel industry and Boarding Area? What’s next a story on the Chiefs game tomorrow? Would be cool if you’d post trip reports and stories related to travel
It’s of major interest to the many people who generate points for travel with resale deals. I understand that there are many, like you, who do not do that but there are many others that do so that’s what this has to do here.
Also, believe it or not, more people read this kind of post than travel reports. It stinks, to me as the writer, since those take a lot more time to do. And I will have some more soon because I like doing them. Merry Christmas to you!
People in the miles and points community tend to take advantage of Bank, Rebate, Sign Up, and Product Deals. These are often paid buy PayPal. Some of these deals require you to spend an X amount of $ so the $100 paid in PayPal is not $100 in profit. Record keeping, having proof, the risk of an audit, and etc. makes this a nightmare for people who earned a few bucks on PayPal.
A $600 will likely bring in more tax revenue