The law, requiring payment platforms like PayPal to file Form 1099-Ks for anyone receiving over $600 (down form $20,000) threatened mass taxpayer confusion.
that requires payment and e-commerce platforms like PayPal, Venmo, CashApp, eBay and Etsy to file Form 1099-K for anyone receiving over $600 in proceeds on their various platforms. The platforms, known as payment servicing entities in the law, previously only had to file the from if a taxpayer received had more than 200 transactions and $20,000 in revenue from the site.
The delay is a welcome reprieve to tax professionals who were expecting enormous confusion among taxpayers who have been doing a small amount of online selling but have never received this form in the past.
The reporting delay does not change the obligation of those doing business through the sites to report their income. But it does give taxpayers additional time to make themselves aware of the requirement and to educate themselves as to how to determine if the proceeds reported on the form are taxable income. Taxpayers will also get more time to learn about the options for correcting erroneous forms—or to make the decision to hire a tax professional to help them.
Finally, the delay gives Congress yet another chance to change the law, which was part of the 2021 American Rescue Plan Act and was intended to help close the tax gap. A
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