Service Providers, Others May Receive 1099-Ks for Sales Over $600 In Early 2023

Service Providers, Others May Receive 1099-Ks for Sales Over $600 In Early 2023

The Internal Revenue Service reminds taxpayers earning income from selling goods and/or providing services that they may receive Form 1099-K, Payment Card and Third-Party Network Transactions, for payment card transactions and third-party payment network transactions of more than $600 for the year. Which differs from reporting prior to 2022 where 1099-K was issued if the total number of transactions exceeded 200 for the year and the aggregate amount of these transactions exceeded $20,000.

There is no change to the taxability of this income; the only change is to the reporting rules for Form 1099-K. Income, including from part-time work, side jobs or the sale of goods, is still taxable. Taxpayers must report all income on their tax return unless it is excluded by law, whether they receive a Form 1099-NEC, Nonemployee Compensation; Form 1099-K; or any other information return.  

The IRS emphasizes that money received through third-party payment applications from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable. 

Source:

https://www.irs.gov/newsroom/reminder-service-providers-others-may-receive-1099-ks-for-sales-over-600-in-early-2023

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The Cultural Alliance of Greater Washington has worked with Bormel, Grice & Huyett, P.A., since 1988. Their knowledge of the arts and the arts community make their services invaluable. They can translate accounting terminology into a comprehensive language. For many organizations, the accounting firm of Bormel, Grice & Huyett provides the financial "information bridge." We whole-heartedly recommend Bormel, Grice & Huyett, excellent accountants who care about our arts organizations.
Jennifer Cover Payne, Executive Director, Cultural Alliance of Greater Washington

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