Tax Tip #171

The IRS announced another delay of the new $600 Form 1099-K reporting threshold for third-party settlement organizations for calendar year 2023.

Reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.

The IRS is planning for a threshold of $5,000 for tax year 2024 as part of a phase-in to implement the $600 reporting threshold enacted under the American Rescue Plan.

Reporting requirements do not apply to personal transactions such as birthday or holiday gifts, sharing the cost of a car ride or meals, or paying a family member or another for a household bill. These payments are not taxable and should not be reported on Form 1099-K.

However, the casual sale of goods and services, including selling used personal items like clothing, furniture, baseball cards & other household items for a loss could generate a Form 1099-K for many people, even if the seller has no tax liability from those sales.

For more information on Form 1099-K, refer to tax tip #118.