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https://uhy-us.com/insights/2023/november/irs-revises-timeline-for-600-reporting-threshold-for-paypal-cash-app-others
Submission: On May 03 via manual from US — Scanned from US
Submission: On May 03 via manual from US — Scanned from US
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Life@UHY Leading with Gratitude * Join Our Team * Experienced * College Recruiting * Work for Our Clients * About Us * About UHY * Leadership * Diversity, Equity & Inclusion * UHY Cares * Header Search Go Search Go Back * Services * Industries * Insights * Careers * About Us * * UHY International * Locations * Contact Us * Find a Professional * Client Portal * Audit & Assurance * Tax * Consulting * Advisory * Business Valuation * Client Accounting Advisory Services * Corporate Finance * ESG Solutions * Forensic Accounting and Expert Witness Services * International Business * IPO Readiness and SEC Support * Resource Solutions * Risk Advisory Services * Transaction Services * Wealth Management * Cannabis * Construction * Dealerships * Financial Services * Government * Health Care * Manufacturing & Distribution * Not-For-Profit & Higher Education * Petroleum * Private Equity * Professional Employer Organizations * Real Estate * Staffing * Technology * All Insights * News * Events * Join Our Team * Experienced * College Recruiting * Work for Our Clients * About UHY * Leadership * Diversity, Equity & Inclusion * UHY Cares IRS REVISES TIMELINE FOR $600 REPORTING THRESHOLD FOR PAYPAL, CASH APP, OTHERS * * * * * The IRS recently announced that it would delay the $600 reporting threshold on platforms like PayPal, eBay, Etsy, Venmo, and Cash App until 2025. For the 2025 filing season (which includes transactions completed in 2024), the new reporting threshold will be $5,000 in business transactions to help phase in the $600 reporting threshold that was enacted under the American Rescue Plan Act of 2021. E-commerce companies will be required to report payments on 1099-K forms to the IRS and send a copy to individual customers with more than $5,000 in gross business transactions to help them record income on their tax returns and report these transactions appropriately. The IRS will continue to use the current $20,000 and 200 transaction thresholds for reporting for the upcoming filing season (2024). Controversial lower reporting threshold delayed again The $600 threshold that was included in the American Rescue Plan Act of 2021 was delayed for the first time in December 2022. At the time, opponents of the measure cited concerns regarding the timeline of implementation and confusion for taxpayers. The 2022 delay was meant to allow more time for taxpayers to understand how the new reporting threshold applies and for tax preparers and software providers to ensure they have the information necessary to assist taxpayers. The most recent delay comes as fears of unsuspecting taxpayers receiving the form and not knowing which transactions required reporting mounted. The IRS was anticipating 44 million 1099-K forms, an increase of about 30 million forms under the original $600 reporting threshold from the American Rescue Plan. More time for taxpayers, preparers, and the IRS Consumers and small casual sellers who were anticipating to receive the information return for the first time will have another year to prepare for the lower threshold and understand which transactions must be reported. Tax preparers will have more time to ensure they understand the new rules to effectively assist taxpayers. Leading up to the 2024 filing season, companies were building up their resources and systems to support the increased volumes of 1099-k forms expected under the new threshold. They now have an additional year and more time still before the $600 threshold takes effect. The IRS will also make changes to its annual income tax return form and schedules. Updating the form is complex and will take time, and the delay allows for additional feedback. Additional changes possible; feedback requested There is a possibility that Congress will draft legislation to raise the threshold or push for additional changes to the ruling, but the IRS wanted to make the change to benefit taxpayers. The $5,000 threshold was chosen after discussions with IRS employees, and the IRS is inviting feedback on the $5,000 threshold for tax year 2024 and other elements of the reporting requirement. Our national tax practice will continue to monitor updates to the 1099-k reporting threshold as well as other guidance from the IRS. Fill out the form on this page to connect with an income tax specialist. 11/28/2023 HAVE A QUESTION? Fill out the form to speak with one of our professionals. * * * Insights * About Us * Careers * UHY International * Locations * Contact Us * 中文 * * SERVICES * TAX * AUDIT & ASSURANCE * CONSULTING * Advisory * * QUICK LINKS * Join our Team * Find a Professional * Internships * News * * * Hide Firm Disclaimer ©2024 UHY LLP. ALL RIGHTS RESERVED. UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc., and its subsidiary entities. UHY Advisors, Inc.’s subsidiaries, including UHY Consulting, Inc., provide tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors” and “UHY Consulting”. 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