Starting in 2023, the reporting threshold for companies that use third-party apps, akin to Venmo, Etsy, StubHub and Airbnb, was set to lower considerably, from $20,000 to $600.
Now, the Inside Income Service has delayed the decreased reporting threshold for one more 12 months and introduced that it’s going to start to section within the lowered threshold beginning in 2024, beginning at $5,000 for the 2024 tax 12 months. 2023, then, will merely be handled as one other transition 12 months.
The American Rescue Plan Act of 2021 additionally eliminated the de minimis threshold, which beforehand allowed an exception to submitting Kind 1099-Ok. In prior years, Kind 1099-Ok was required to be issued for third-party networks transactions provided that the variety of transactions exceeded 200 for the 12 months and the combination quantity of those transactions exceeded $20,000.
We requested two professors and authors of ALM’s Tax Information with opposing political viewpoints to share their opinions about the newest delay within the efficient date for the decreased Kind 1099-Ok threshold.
Under is a abstract of the talk that ensued between the 2 professors.
Their Votes:
Bloink
ByrnesTheir Causes:
Bloink: This newly decreased threshold goes to create widespread confusion for unusual taxpayers. Utilizing on-line cash switch providers has change into extraordinarily widespread. The regulation would require advanced calculations to correctly report acquire or loss — and can apply to many taxpayers who’ve by no means been topic to these kinds of reporting necessities. We want the additional time to create a system that avoids confusion and widespread misinterpretation.
