IRS delays Implementation of $600 reporting threshold for third-party payment platforms.

As part of the American Rescue Plan of 2021, the IRS updated the reporting requirement for third-party settlement organizations. These are online platforms like Paypal, CashApp, Venmo, Etsy, etc.

The update required any user who made $600 or more from business transactions to receive a 1099-K from the platform. This is important because the 1099's are reported directly to the IRS, thus ensuring that taxpayers weren't hiding any income.

The online platforms raised several concerns in implementing the new rules, and on December 23, the IRS announced they were suspending the reporting requirement for 2022. This means the original rule of more than 200 transactions per year exceeding an aggregate of $20,000.

However, the IRS will implement the new rule for the 2023 tax season. So make sure to stay knowledgeable & follow Jacqi Law on Instagram or Facebook to stay up to date!