Just a reminder, it has always been true that you must report all worldwide income on your tax returns. The tax reporting form 1099-K has been around since 2008 which requires all credit card companies and third-party processors like Amazon and PayPal to report sales to the IRS. This was issued to anyone who’s sales volume was over $20,000 and more than 200 transactions.

Flash forward to the American Rescue Plan passed in 2021 where Congress has made a small but impactful change to the reporting requirements for 1099-K. A 1099-K will now be issued to anyone who’s third party sales are over $600, regardless of how many transactions were made. This is going to include those who use any third party payment processors from Visa to Venmo. Again, all money that you receive from your customers is income subject to tax, regardless of whether it is reported on a 1099 or not.

The IRS has been phasing this requirement in over the next few years. While the IRS changed the reporting requirements for tax years 2022 and 2023, taxpayers should be aware that they could still receive 1099-K forms for these tax years.

NEW: Just before the 2023 filing season began, the IRS suspended this requirement again until next year. Therefore, you may or may not receive a 1099-K for 2023 but you will for 2024. If you did receive a 1099-K for 2023, we may need to deal with it on the tax return, so include it with your paperwork!