IRS announces changes to 1099-K requirements

[BrewOne]

By royal fiat? Anyway, doing what Congress should have, IRS has announced for 2023, filing requirements of 3rd party payers will be the same as 2022.  And 2024 will have a $5,000 threshold for issuing a 1099-K (as reported in NY Times)

[Lee B]

What a mess!

[Medlin Software, Dennis]

Maybe the PTB are waiting for a TY where there is not a huge concert series and the resale profit... but seriously, likely comes down to perceived profit. Maybe the cost of processing the increase in forms is not thought to be covered by increased revenue?. Or maybe even easier, not in a presidential election year.

[Lee B]

The IRS probably received a lot of pressure from the entities required to submit the 1099 Ks saying they weren't ready to comply.

[BulldogTom]

So help me understand this.   

If I pay a vendor for a business expense with a credit card, and it is over $600 but less than $10,000, I have no reporting requirements (because it was paid by CC) and the CC company will not report (because it is under their threshold).   Next year, the same scenario but as long as the transactions total less than $5,000 the transactions don't get reported to the IRS.

Conversely, if a business client pays me on a credit card more than $600 but less than $10,000 in 2023, I will not get a 1099NEC from the client, nor will I get a 1099K from my CC processor.  In 2024 same but under $5,000 fee.

Do I have this right?  You think anyone is going to set their fee at $4,999 in 2024? (not like anyone would game the system to avoid income being reported).

Tom
Longview, TX

[TexTaxToo]

22 minutes ago, BulldogTom said:

Do I have this right?

This has nothing to do with the requirements for issuing 1099-NEC, nor with the requirement that credit card processors report ALL credit/debit payments to merchants on a 1099-K.

This is only for third party payment processors (e.g., Paypal, CashApp, Uber, AirBnB, etc), where a third party accepts a payment on behalf of someone.  See the announcement here: https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5000-for-2024-to-phase-in-implementation

[BulldogTom]

1 hour ago, TexTaxToo said:

This has nothing to do with the requirements for issuing 1099-NEC, nor with the requirement that credit card processors report ALL credit/debit payments to merchants on a 1099-K.

This is only for third party payment processors (e.g., Paypal, CashApp, Uber, AirBnB, etc), where a third party accepts a payment on behalf of someone.  See the announcement here: https://www.irs.gov/newsroom/irs-announces-delay-in-form-1099-k-reporting-threshold-for-third-party-platform-payments-in-2023-plans-for-a-threshold-of-5000-for-2024-to-phase-in-implementation

Thanks

Tom
Longview, TX