Best Tax Preparation Services in West Allis, WI

Delayed Implementation of New 1099-K Rules – Did You Know?nnUnder 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 potentially 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.nnTherefore, 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. nnRegardless of 1099 reporting rules, payments received through third-party platforms for self-employment activities or selling goods for profit are generally taxable income. A tax professional can help you properly report your 2023 income, and prepare for the future implementation of a lower threshold for 1099-K forms.