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.
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