1099K

[i_am_not_obsolete]

Just read following. Does it mean we're back to 20K for tax year 2025?

Tax Bill Changes 1099 Reporting Thresholds

By William Hays Weissman

The “One Big Beautiful Bill Act” signed into law on July 4, 2025, makes two important changes to tax reporting requirements that should be of interest to employers. 

1099 Reporting Threshold Increased to $2,000 and Indexed for Inflation

Payments to non-employees for personal services must be reported on an “information return,” commonly called a Form 1099-NEC, if the payment is $600 or more in a calendar year. Similarly, payments of non-wages, such as for a settlement that includes penalties or emotional distress-type damages, are reportable on Form 1099-MISC if the payment is $600 or more.1 

Beginning in 2026, however, Section 70433 of the new Act increases the $600 threshold to $2,000, which will then be adjusted for inflation beginning in 2027. In addition, requirements relating to backup withholding – required when the payee fails to provide a valid Form W-4 or Form W-9 using the taxpayer’s correct taxpayer identification number – will similarly be increased to $2,000 and then also be indexed for inflation beginning in 2027. 

While amounts below the new reporting thresholds will still constitute income subject to taxation, an employer will no longer be required to issue a 1099 or engage in backup withholding at the lower amounts. This could significantly reduce the number of 1099s that employers are required to issue.

Form 1099-K Reporting Reverts to Original Thresholds

Another important tax reporting change addresses third-party network reporting, which is required on Form 1099-K.2 When such reporting was originally enacted, there was a de minimis exclusion from required reporting if the total amount of such payments was less than $20,000 and involved fewer than 200 transactions. The American Rescue Plan Act of 2021 eliminated the transaction requirement entirely and reduced the reporting threshold to $600, with these changes originally intended to take effect in 2022. The IRS delayed implementation of these changes, most recently stating that it would impose a $2,500 threshold for 2025. Section 70432 of the new Act, however, reinstates the $20,000 and 200 transactions thresholds for required reporting, retroactive to 2022. The Act also applies these standards to backup withholding requirements, effective for 2025. 

These adjustments appear to be good news for employers and businesses that regularly make such payments because they should substantially reduce their administrative burdens, particularly with respect to payments made to independent contractors.

[orangehound]

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@i_am_not_obsolete wrote:

Just read following. Does it mean we're back to 20K for tax year 2025?

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It means that eBay doesn't have to issue a 1099 to a seller if their gross receipts were under 20K or 200 transactions, unless a state has tighter limits.

This slightly reduces administrative burdens for employers and businesses.  It doesn't reduce the administrative burden for an eBay seller who is honest and pays their taxes - sellers who sell on eBay for profit ... and I don't mean those who are just clearing out the attic of used stuff like a garage sale ... are still liable for taxes with or without receiving a 1099 from a payment processor.

But, let's be real here ... avoid a lengthy thread ... and cut to the chase:  The only people who are concerned about 1099 thresholds are those who are trying to figure out how to cheat on their taxes without getting caught.  So, for anyone reading this, the answer is ... 

"Yes, the IRS will not know of your eBay earnings without a 1099, and so long as you keep your gross receipts and sales below these levels, then you can lie about your actual income on your tax returns." 

[a_c_green]

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@orangehound wrote:
But, let's be real here ... avoid a lengthy thread ... and cut to the chase:  The only people who are concerned about 1099 thresholds are those who are trying to figure out how to cheat on their taxes without getting caught.  So, for anyone reading this, the answer is ... 

"Yes, the IRS will not know of your eBay earnings without a 1099, and so long as you keep your gross receipts and sales below these levels, then you can lie about your actual income on your tax returns." 

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I had a giggle over one part of that announcement: "retroactive to 2022." I can see a whole bunch of sellers filing amended returns, saying, "Wait! I didn't really gross $19,999 on eBay! Forget about that! It was an administrative error! It was a misplaced decimal point! It was global warming! I blame sunspots!" etc...

[i_am_not_obsolete]

Sorry, didn't know you were GOD almighty and knew everyone's situation.

"But, let's be real here ... avoid a lengthy thread ... and cut to the chase:  The only people who are concerned about 1099 thresholds are those who are trying to figure out how to cheat on their taxes without getting caught. 

[jameshen1]

Looks like they hit a nerve with you.

[i_am_not_obsolete]

Nah, it's all good. Just got to remember that the world is full of them. 

[kensgiftshop]

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@i_am_not_obsolete wrote:

Sorry, didn't know you were GOD almighty and knew everyone's situation.

"But, let's be real here ... avoid a lengthy thread ... and cut to the chase:  The only people who are concerned about 1099 thresholds are those who are trying to figure out how to cheat on their taxes without getting caught. 

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Right.

Doesn't matter if you get a 1099K or not, you still have to report your income.

[caldreamer]

You should understand that 1099 "reporting threshold" has nothing to do with paying your income tax.   IRS still requires that you declare your "gross sales" and pay taxes on your income.

Only thing change in reporting threshold does is eases the bookkeeping burden from large corporation (such as EBAY, Amazon).

Also be aware that each state has different threshold.   Threshold your state of Pennsylvania is 600 dollars.

[orangehound]

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@i_am_not_obsolete wrote:

Sorry, didn't know you were GOD almighty and knew everyone's situation.

"But, let's be real here ... avoid a lengthy thread ... and cut to the chase:  The only people who are concerned about 1099 thresholds are those who are trying to figure out how to cheat on their taxes without getting caught. 

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I'm not God ... I don't know everyone's situation ... and, of course, there are those rare unicorns out there who are intrigued by tax laws that don't apply to them.

Still, every time a person posts a thread about 1099's, there is a chorus of "It doesn't matter what the threshold might be ... you still have to report your taxes".  So, the assumption of everyone on these forums is that whenever a person is posting about 1099 threshold levels, their motivation is to avoid paying taxes.

I apologize if what I posted offended you.  Wasn't the intent.

[mam98031]

@i_am_not_obsolete 

"...Tax Bill Changes 1099 Reporting Thresholds"  The Tax laws did NOT change.  Just the thresholds on this FORM did.  You are still responsible for reporting your income to the IRS.  Just because the threshold on this FORM was increased to 20K & 200 transactions, does NOT mean you have $19,999 of tax free income.

Myth: If taxpayers didn't receive a Form 1099-K, they don't have to report income.
Fact: According to federal law, all income is taxable unless it is specifically excluded by tax law. Taxpayers should report any profits from selling goods or services, regardless of if they receive a Form 1099-K.

https://www.irs.gov/newsroom/irs-never-mind-the-myths-know-the-facts-about-receiving-a-form-1099-k-i...

[stainlessenginecovers]

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@i_am_not_obsolete wrote:

Sorry, didn't know you were GOD almighty and knew everyone's situation.

"But, let's be real here ... avoid a lengthy thread ... and cut to the chase:  The only people who are concerned about 1099 thresholds are those who are trying to figure out how to cheat on their taxes without getting caught. 

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I didn't think there were any special 'situations' regarding Federal Filing Requirements from one scenario to another? I believe Anyone making more than $600 in a year are required to file, then various deductions can be made (blind, over 65 etc.) along with any/all other deductions. 

By the way, I believe Pennsylvania has a 1099 requirement of $5000; so ebay would have to 'abide' by that state (as well as many other states that have a 'lower than $20k' requirement for a 1099 to be issued). 

[paxilill]

The government doesn't need the working stiffs money, esp when that money is from used personal items that they just happen to be moving on. Yeah sure someone could break it out, but the current admin can take a hike. 

Some seem to take the holier than thou act like they reported the $5.00 they got a yard sale for a dead Murray lawnmower with a bent crankshaft and a tank full of fuel that's turned into something else 

No 1099 = not happening 

[mam98031]

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@stainlessenginecovers wrote:

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@i_am_not_obsolete wrote:

Sorry, didn't know you were GOD almighty and knew everyone's situation.

"But, let's be real here ... avoid a lengthy thread ... and cut to the chase:  The only people who are concerned about 1099 thresholds are those who are trying to figure out how to cheat on their taxes without getting caught. 

---

I didn't think there were any special 'situations' regarding Federal Filing Requirements from one scenario to another? I believe Anyone making more than $600 in a year are required to file, then various deductions can be made (blind, over 65 etc.) along with any/all other deductions. 

By the way, I believe Pennsylvania has a 1099 requirement of $5000; so ebay would have to 'abide' by that state (as well as many other states that have a 'lower than $20k' requirement for a 1099 to be issued). 

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@stainlessenginecovers 

If you look at the link I gave just a post or two above yours, there is no $600 minimum.  There certainly are some exceptions, but there is no minimum on income that has to be reported per the rules of IRS.

You are correct, some states have their own 1099K requirements and some of those states are as low as $600..  But it is JUST a FORM.  With or without it, as I know you know, you must report your income.

[mam98031]

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@paxilill wrote:

The government doesn't need the working stiffs money, esp when that money is from used personal items that they just happen to be moving on. Yeah sure someone could break it out, but the current admin can take a hike. 

Some seem to take the holier than thou act like they reported the $5.00 they got a yard sale for a dead Murray lawnmower with a bent crankshaft and a tank full of fuel that's turned into something else 

No 1099 = not happening 

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Well that isn't true @paxilill .  The majority of income taxes collected by our government come from the average Joe.

No one is saying that the $5 someone earned for some chore is taxable.  But to have a productive conversation you do need to realize what is taxable income and what is not.

https://www.irs.gov/filing/taxable-income

[mommaknows]

No matter where you live and your particular threshold for the 1099, income is income and needs to be reported.

Just saying.