The IRS introduced a delay within the 1099-Ok reporting threshold. Lisa Greene-Lewis, CPA and TurboTax tax professional, explains what you have to know to your 2022 taxes.
In December, the IRS introduced a delay in reporting thresholds for third-party settlement organizations set to take impact for the 2022 tax submitting season.
Well-known third-party settlement organizations (TPSOs) embody Venmo, PayPal, and Cash App.
That implies that for the tax 12 months 2022, the prevailing 1099-Ok reporting threshold of $20,000 in funds from over 200 transactions will stay in impact.
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Lisa Greene-Lewis, CPA and TurboTax tax professional, discusses all the things you have to know. Read the complete Q&A beneath or watch the video above.
Video Transcript:
1099-Ok Reporting Requirement
Tracy Byrnes: If you utilize Venmo, PayPal, Cash App, pay attention up. Because at one level we thought you have been getting a tax doc. A 1099-Ok. Think of it as Ok for money. Now you may not be. Lisa Greene-Lewis, TurboTax professional and CPA, is right here with us proper now. Lisa, I used to be getting nervous about this as a result of I do know my youngsters use Venmo and PayPal a lot. So I used to be presuming they have been going to have a reporting requirement, however perhaps not a lot.
Lisa Greene-Lewis: Yes, lots of people have been frightened about this, like thousands and thousands extra tax filers could have acquired this manner. But on December 23, the IRS dominated to delay the reporting requirement. So the reporting requirement was going to go, should you had over $600 in third-party supplier transactions, you’d get a type 1099-Ok. But that delay made it so you’ll not get one except you’ve over 200 transactions and $20,000. So much more transactions and cash earlier than you’d see this manner.
Tracy Byrnes: I’m truly even pondering of folks that pay alimony to one another. They in all probability Venmo it lately. They would possibly very nicely get a 1099-Ok due to it.
Lisa Greene-Lewis: That might be potential. But I do know the IRS and third-party suppliers, they’re monitoring who’s a enterprise and who shouldn’t be. Like should you go into your Venmo app, they’ve an space for companies.
Self-Employed Reporting
Tracy Byrnes: I get that. OK, so if I certainly do get a 1099-Ok, what do I do with it? I’ve to report it I’m guessing someplace.
Lisa Greene-Lewis: Yes, you do need to report it, particularly should you’re self-employed. And one factor to level out, this is not a brand new tax legislation. Self-employed have been all the time alleged to report their web earnings if it is $400 or extra. And no matter any earnings, you are alleged to report it. So it is only a reporting requirement for the third-party suppliers. They can be those that might be sending you these varieties. You would report no matter’s on that type. Remember, should you’re self-employed, although, there are tons of deductions that may decrease your total earnings and decrease the taxes you pay.
Tracy Byrnes: And the opposite factor you identified, although, was that some states truly nonetheless have been giving these 1099-Ks out. How come?
Lisa Greene-Lewis: Yeah, it is dependent upon the state. If that they had conformity with the delay that the IRS issued. So it simply is dependent upon the person states.
Transactions on Third-Party Providers (PayPal, eBay, Venmo)
Tracy Byrnes: So the underside line is should you offered an merchandise on eBay or one thing, you’re going to get a 1099-Ok if certainly you cross that threshold. If it is $600, although, you in all probability won’t.
Lisa Greene-Lewis: Yes, you in all probability won’t. One factor to level out, folks do not understand that should you promote private gadgets on eBay, you might be alleged to report these, though most individuals do have a loss. I imply, more often than not they promote it for lower than what they purchased it for. So tax-wise, there would not be something to fret about should you had a loss.
Tracy Byrnes: All proper. So if I’m stunned and I get this 1099-Ok within the mail, what do I do with it?
Lisa Greene-Lewis: One factor you do not have to fret with TurboTax. You can snap an image of your 1099-Ok and the data out of your 1099-Ok goes to the proper tax type.
Tracy Byrnes: Lisa Greene-Lewis, TurboTax professional and CPA, thanks for serving to us straighten that out. Pay consideration should you get a 1099-Ok. Thank you, Lisa.
Lisa Greene-Lewis: Thank you.
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