Last week the IRS announced a delay of their planned implementation of a $600 reporting threshold for third-party payment platforms. This announcement delays the expanded form 1099-K reporting requirement for annual transactions in excess of $600 from online platforms like Ebay, Etsy, Venmo, and CashApp.
The IRS issued the following statement on the delay: “The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan. . . . The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”
This article from USA Today explains the practical impact of the delay. Those earning at least $600 from e-commerce platforms must still pay taxes on that income, but the IRS’s delay means there won’t be as much government oversight of how much ecommerce owners owe in taxes.
NFIB released a statement and press release on the delay. Vice President of Federal Government Relations Kevin Kuhlman stated, “The one-year Administrative delay by the IRS allows small businesses to breathe a sigh of relief from being inundated with new Form 1099-K reporting early next year.” He continues, “The delay provides more time to increase the thresholds and reduce the paperwork burden on small businesses. NFIB urges Congress to continue working to provide relief from this burdensome reporting requirement.”
In their announcement, the IRS notes that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect.
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