Understanding Schedule 1099-K

The rules for information reporting for third-party network transactions—processors of credit cards, electronic payments, etc.—were supposed to change for 2022, but the IRS has kept the old rules in place for now and updated its FAQs on 1099-K. This means sellers will be receiving Form 1099-K by January 31, 2023, to report their 2022 transactions only if the total from any third-party party platform exceeded $20,000 AND there were more than 200 transactions. A simple $600 threshold was supposed to apply to 2022 transactions, but there’s been a lot of pushback on this threshold. Sellers may receive multiple forms. Watch for possible legislation to permanently restore the old threshold or at least increase the $600 amount for 2023 transactions. Note: The IRS move doesn’t void the laws in California, Massachusetts, and Vermont, that have a $600 threshold and require third-party platforms to issue Form 1099-K accordingly. #IdeaoftheDay