(IntegrityPress.org) – The Form 1099-K has recently undergone significant change in the context of the American Rescue Plan Act of 2021. Previously, taxpayers only needed to file it if they had 200 transactions worth more than $20,000 annually. Now, however, one transaction of $600 or more will create a requirement to complete one, meaning a host of taxpayers will need to do so for the first time.
The Internal Revenue Service (IRS) has warned those intending to file their taxes early who will have to return a Form 1099-K. You may not receive the form until after January 31 of next year, the deadline for companies to send them. If you send your tax returns early without a necessary form, you may have to refile. Officials are advising filers to wait until February or March if they may need to return a Form 1099-K.
Before the "American Rescue Act", the reporting threshold for filing a 1099k report when using third-party transaction processors like PayPal and Venmo was $20,000. Now, you will be taxed and at risk of being over transactions totaling $600. https://t.co/JnFazC2ZxA
— ATR (@taxreformer) December 12, 2022
The Form 1099-K is for people who receive money through third-party payment providers like PayPal. However, experts are warning that some taxpayers may receive the form in error because incoming personal transactions on their statements might appear taxable to the IRS when in reality, they aren’t. Examples might include the return of money from a friend or family member on a personal loan. Should this happen in your case, the official advice is to contact the agency to seek a correction.
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