As 2023 approaches, little-noticed tax regulation changes have come about that may affect you. As part of March’s American Rescue Plan, those who use apps like Venmo or PayPal regularly might have a new form to fill out. Anyone who was paid more than $600 for selling goods or services using a third-party money app should get a 1099-K form to detail that money. Though the whole thing might get confusing pretty quickly.
Many experts worry the IRS doesn’t have the resources to deal with the amount of these forms they could receive. Some even worry the IRS could get forms that people send in unnecessarily.
Before the law was changed in March, 1099-Ks only went to those who took in more than $20,000 through more than 200 transactions. Though now, micro-business owners, like Etsy sellers, and side hustlers would be getting the form. Though good news for them is if their income isn’t high enough they might not end up having to pay anything. The whole situation just makes more work for everyone involved and adds an extra level of panic to tax season.
It has been said that personal transactions, like splitting the dinner bill or paying back a friend for coffee, shouldn’t trigger the need for 1099-Ks but some forms may be sent out in error which would then need to be called on and questioned.
This is all in an effort to close the “tax gap,” or the money owed to the agency that goes unpaid. Though many are increasingly worried both the IRS and the private sector need time to better prepare for the implementation of the law. While it will undoubtedly be a pain for the majority of Americans, the impact on pocketbooks around the county will likely be minimal.
Unreal. The Feds have more then enough money from us, now they want more. The little guys is the ones being screwed by Biden and his gang of thieves. Would be nice if the demos where screwenized on where and how they spend money.