1099K IRS NEWS

[pa-louie]

IRS just issued " notice 2024-85"  for rules for 1924 and 2025 and beyond . Maybe new

administration will change it back someday 

[dhbookds]

Form 1099-K threshold is $5,000 for calendar year 2024

https://www.irs.gov/newsroom/irs-provides-transition-relief-for-third-party-settlement-organizations...

WASHINGTON — The Internal Revenue Service today issued Notice 2024-85 PDF providing transition relief for third-party settlement organizations (TPSOs), also known as payment apps and online marketplaces, regarding transactions during calendar years 2024 and 2025.

Under the guidance issued today, TPSOs will be required to report transactions when the amount of total payments for those transactions is more than $5,000 in 2024; more than $2,500 in 2025; and more than $600 in calendar year 2026 and after.

Notice 2024-85 also announces for calendar year 2024, that the IRS will not assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax during the calendar year.

TPSOs that have performed backup withholding for a payee during calendar year 2024 must file a Form 945 and a Form 1099-K with the IRS and furnish a copy to the payee.

For calendar year 2025 and after, the IRS will assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax.

[dbfolks166mt]

     Remember that is at the Federal level. A number of states have their own laws regarding the 1099-K issuance threshold and since the 1099-K is a federal form if you are in one of those states by default the 1099-K will be issued to the IRS at the Federal level as well. 

     Even if the "new administration" changes it to something else it will not effect the state laws and it would not surprise me to see any number of states enact their own laws should the Fed revert back to the old 20K threshold. 

[jerseyboymusic]

@pa-louie 

1099 or not, you are still supposed to report your income to the IRS on your taxes (and pay what you owe)

[fern*wood]

Do you have many 1099ks to issue?

[kensgiftshop]

Hopefully they'll fix it so all the income is reported.

[monroe67]

The date of the announcement was Tuesday, November 26, 2024, one week ago today. 

The second paragraph very clearly sets out the minimum dollar amount for 2024 ($5,000), 2025 ($2,500), and 2026 and future years ($600), which is the amount the ARPA set for 1099-Ks.  

There will still be gnashing of teeth and hue and cry from some eBay sellers after the end of January when the 1099-Ks are issued.  

I sure wish eBay would put some kind of announcement about this IRS update into the Seller News.  In my humble opinion, this official guidance on 1099-Ks is as important for US sellers to know as the info about the Canadian postal strike and weather conditions.  

[kensgiftshop]

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@monroe67 wrote:

 this official guidance on 1099-Ks is as important for US sellers to know

---

It's only important to the tax dodgers.

Those of us that already report our income like we are supposed to, it doesn't make any difference.

[fern*wood]

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@kensgiftshop wrote:

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@monroe67 wrote:

 this official guidance on 1099-Ks is as important for US sellers to know

---

It's only important to the tax dodgers.

Those of us that already report our income like we are supposed to, it doesn't make any difference.

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Evidently that is a pretty big number.

Back before 1099ks were sent out for any amount, a common rule of thumb used to see which sellers were reporting their sales and which didn't, was to see which ones were collecting/paying sales tax.   Back then sales tax being reported pretty much indicated someone was selling and needed to file on their income taxes.  Now ebay collects the sales tax to remit and no one seems to think that's a tip off for fed or state tax collectors.

[lux.ra_14]

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@pa-louie wrote:

IRS just issued " notice 2024-85"  for rules for 1924 and 2025 and beyond .

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1924? At least we have some good years left before the market crash and the Depression.

[monroe67]

"@monroe67 wrote:

 this official guidance on 1099-Ks is as important for US sellers to know

It's only important to the tax dodgers.

Those of us that already report our income like we are supposed to, it doesn't make any difference."

That is both an interesting and accurate observation.  
For years (eons?) the 1099-K reporting minimums were $20,000 and 200 transactions.  
Hypothetical people who sold $30,000 (or more!) in "only" 195 transactions did not receive a 1099-K.  Moreover, the IRS did not know about them, because  no 1099-K was issued.  

I have no way to know for sure, of course, but I think probably more that just a few of those hypothetical people who did not receive a 1099-K simply omitted that less-than-$20,000 (or possibly more) of income when they created their tax returns.  Which is, of course, a LIE, and truly illegal.  They just need to be caught.  

Finally, the IRS and the rest of federal government opened their eyes.  
And the threshold for issuing 1099-K reports was decreased to $600.00 with no transaction minimum.  

And the lying tax dodgers and cheaters are being caught.  Like dangerous animals, they scream when they are caught.  

[krazzykats]

Would selling a personal car on eBay for $30,000 result in the issuance of a 1099-K form? 

[monroe67]

"Would selling a personal car on eBay for $30,000 result in the issuance of a 1099-K form?"

Was the car sold during 2024?

Was the entire transaction handled on and through eBay?  Meaning, did the buyer pay eBay, and eBay processed the payment, and eBay sent the sale proceeds to the seller (you?), into that seller's bank account, which the seller provided to eBay when the seller registered to use eBay?    

Then, probably, yes, that seller would receive a 1099-K from eBay.  

Remember that these 1099-K regulations apply to eBay.  

Even if that seller does not receive a 1099-K from eBay, the SELLER -- assuming he/she is a United States income tax payer
-- is expected to list ALL of his/her income on his/her federal tax return form 1040 (or the appropriate version).  

[nobody*s_perfect]

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@pa-louie wrote:

IRS just issued " notice 2024-85"  for rules for 1924 and 2025 and beyond . Maybe new

administration will change it back someday 

---

As noted in one of the other posts, the announcement came out a week ago. There has been at least one thread every day about it.  Looks like we're going to have just as many new threads about this announcement as we had about "what's the 1099-K threshold going to be".

[stephenmorgan]

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@krazzykats wrote:

Would selling a personal car on eBay for $30,000 result in the issuance of a 1099-K form? 

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I believe the issuance of a 1099K is only based on money that goes through a money processor.  There are different ways to sell a vehicle on eBay and one way you are just paying eBay to advertise the vehicle and the sell is not binding. The decision to buy or not is made after inspection of the vehicle and the payment is made outside of eBay. The payment arrangement outside of eBay would not be reported on the 1099K because eBay did not transfer the money to you.  If a down payment was made through eBay then that would be subject to 1099K reporting.