IRS FORM 1099-K: Changes and Implementation?

Posted on December 5, 2024 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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2024 LATE YEAR UPDATE

Who sends Form 1099-K?

Payment card companies, payment apps and online marketplaces are required to fill out Form 1099-K and send it to the IRS each year. They must also send a copy to you by January 31st. 2025

CITE: https://www.r2library.com/Resource/Title/0826102549

Who gets Form 1099-K:

You should get Form 1099-K for these situations:

1. If you take direct payment by credit or bank card for selling goods or providing services

If your customers or clients pay you directly by credit, debit or gift card, you’ll get a Form 1099-K from your payment processor or payment settlement entity, no matter how many payments you got or how much they were for.

Find what to do with Form 1099-K.

2. If you used a payment app or online marketplace and received a Form 1099-K

A payment app or online marketplace is required to send you a Form 1099-K if the payments you received for goods or services total over $5,000. However, they can send you a Form 1099-K with lower amounts. Whether or not you receive a Form 1099-K, you must still report any income on your tax return.

This includes payments for any:

  • Goods you sell, including personal items such as clothing or furniture
  • Services you provide
  • Property you rent

The payments can be made through any:

  • Payment app
  • Online community marketplace
  • Craft or maker marketplace
  • Auction site
  • Car sharing or ride-hailing platform
  • Ticket exchange or resale site
  • Crowdfunding platform
  • Freelance marketplace 

If you accept payments on different platforms, you could get more than one Form 1099-K.

Personal payments from family and friends should not be reported on Form 1099-K because they are not payments for goods or services.

Find what to do with Form 1099-K.

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DAILY UPDATE: New IRS 1099-K Reporting Rule

Posted on November 13, 2022 by Dr. David Edward Marcinko MBA MEd CMP™

By Staff Reporters

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IRS

The IRS just noted that there are no changes made to the taxability of income but only in the reporting rules for Form 1099-K. Taxpayers are still required to report all income on their tax return unless it is excluded by law. This is whether they receive a Form 1099-NEC, Nonemployee Compensation; Form 1099-K; or any other information return.

Previously businesses would generally receive a 1099-K tax form only when their gross payments exceeded $20,000 for the year and the business conducted at least 200 transactions.

According to the new 1099-K rule, the gross payments threshold has been lowered to just over $600 for the year with the transactions threshold no longer applying. Now a single transaction exceeding $600 can trigger a 1099-K. This includes transactions through credit cards, debit cards, banks, PayPal, Uber, Lyft, and other third-party payment settlement entities.

The 1099-K form includes information about the payment processor and the company receiving payments, and a monthly breakdown of total payments, among other information.

According to the IRS, the lower information reporting threshold and the summary of income on Form 1099-K will make it easier for taxpayers to track the amounts received.

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ORDER: https://www.routledge.com/Comprehensive-Financial-Planning-Strategies-for-Doctors-and-Advisors-Best/Marcinko-Hetico/p/book/9781482240283

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