The Ultimate 1099 Cheat Sheet
As of 12/23/2022 Congress and the IRS has delayed sending out 1099Ks. I wrote The Ultimate 1099 Guide and was getting it ready for January when I got this from the IRS:
Delay for implementation of $600 reporting threshold
for third-party payment platforms’ Forms 1099-K
WASHINGTON — The Internal Revenue Service today announced a delay in reporting thresholds for third-party settlement organizations set to take effect for the upcoming tax filing season. As a result of this delay, third-party settlement organizations will not be required to report tax year 2022 transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount enacted as part of the American Rescue Plan of 2021.
As part of this, the IRS released guidance today outlining that calendar year 2022 will be a transition period for implementation of the lowered threshold reporting for third-party settlement organizations (TPSOs) including Venmo, PayPal and CashApp and others that would have generated Form 1099-Ks for taxpayers.
“The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan,” said Acting IRS Commissioner Doug O’Donnell. “To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”
Everybody dodged a bullet! Trust me if this law had been implemented and you didn’t know about the 1099K you would have filed your taxes and odds are you would have gotten a tax bill. With this cheat sheet you will be ready for the IRS in 2024 but you have to start tracking January 2023!
Other info that's stilll relevant!
Next year a lot of people are gonna be mad as F!
Yep! It's gonna get crazy and the IRS knows this!
My new book or shall I call it a guide is dropping knowledge about the new tax forms a lot of ya'll are gonna get.
I’ve always prepared my own taxes even as a teenager.
I guess ever since they started taking money out of my paycheck I paid attention.
Now years later I’m still on top of the tax game and have a pass from the IRS to process any type of tax return.
Personal, business and payroll taxes.
Taxes is a skill I stay on top of because taxes are never going anywhere. Ever.
Now here’s the thing…
The taxman kept the country flowing by giving out money via unemployment incentives along with stimulus checks during COVID.
Now he wants the money back for all people who took advantage of COVID.
Soooo….it’s gonna get ugly next year with the tax situation and I’m warning you now in September 2022.
Disclaimer: I’m not giving you tax advice I’m just saying look for a 1090-K in 2023 if you use a 3rd party for payments to you such as Paypal, Square, Venmo, Etsy, Ebay, Amazon to name a few in 2022.
For now not Zelle (I personally think the IRS has a plan for Zelle people). A lot of people use Zelle for collecting money. Especially indy contractors.
Anyway if anybody pays you at least $600 in 2022 for something you sold to get money or if you used a 3rd party such as Paypal, Square, Venmo, Etsy, Ebay, Amazon to name a few you will get a 1099-K.
Maybe several 1099-K's.
See what’s happenin’ is the IRS wants the 3rd parties to be the gatekeeper. A gatekeeper who will snitch you out if you get paid more than $600.
Thing is you could get more than one 1099-K and if you do not report the money you made, and the snitch (3rd party) does, you will get an audit letter with an estimated amount due.
I sold a motorcycle on eBay for 1,000 I will get a 1099-K.
I sold 50 t-shirts on Etsy for $15 each I will get a 1099-K.
I fixed Joes computer and he paid me $650. He asked if I take Paypal and of course I do because I want to get paid. I will get a 1099-K.
I sold an old couch for $700 on Craigslist. The buyer asked if I take Square. Of course I do because I want to get paid. I will get a 1099-K.
Yes you have already paid taxes on this couch. Tax man said you earned income so you will be taxed on the $700.
If I sold stuff on Etsy, Ebay and Amazon and earned over $600 for each one, I will get three 1099-K’s from each snitch I mean middle man, seriously I mean the 3rd party.
So I’m a indy contractor (not a corp or LLP). I get paid via check from some customers and I use Paypal and square. The company that pays me by check I earned $3,600. I will receive a 1099-NEC.
I also had some payments go thru Paypal and Square and they were both over $600. Will I get two extra 1099-K’s? You bet buddy!
I got paid 6,000 via Zelle. Will I get a 1099-K from Zelle? Nope! Not yet anyway because the money goes directly into you bank account.
So if that is the case will the IRS ask you to submit your bank statements? Oooh it’s gonna get hot and ugly next year!
*Update - The bank's 3rd party will send you a 1099-K! Example Chase uses Payment Tech.
See this is all about taxes on the money you received.
The only way you can by pass any of this is to receive cash. Real green dollars.
But I don’t offer tax advice.