The IRS launched a delay inside the 1099-Okay reporting threshold. Lisa Greene-Lewis, CPA and TurboTax tax skilled, explains what you need to know to your 2022 taxes.
In December, the IRS launched a delay in reporting thresholds for third-party settlement organizations set to take influence for the 2022 tax submitting season.
Effectively-known third-party settlement organizations (TPSOs) embody Venmo, PayPal, and Money App.
That suggests that for the tax 12 months 2022, the prevailing 1099-Okay reporting threshold of $20,000 in funds from over 200 transactions will keep in influence.
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Lisa Greene-Lewis, CPA and TurboTax tax skilled, discusses all of the issues you need to know. Learn the entire Q&A beneath or watch the video above.
Video Transcript:
1099-Okay Reporting Requirement
Tracy Byrnes: Should you make the most of Venmo, PayPal, Money App, concentrate up. As a result of at one degree we thought you’ve been getting a tax doc. A 1099-Okay. Consider it as Okay for cash. Now you is probably not. Lisa Greene-Lewis, TurboTax skilled and CPA, is true right here with us correct now. Lisa, I was getting nervous about this on account of I do know my kids use Venmo and PayPal rather a lot. So I was presuming they’ve been going to have a reporting requirement, nevertheless maybe not rather a lot.
Lisa Greene-Lewis: Sure, numerous individuals have been frightened about this, like hundreds and hundreds further tax filers may have acquired this fashion. However on December 23, the IRS dominated to delay the reporting requirement. So the reporting requirement was going to go, do you have to had over $600 in third-party provider transactions, you’d get a sort 1099-Okay. However that delay made it so that you’ll not get one besides you’ve over 200 transactions and $20,000. A lot extra transactions and money sooner than you’d see this fashion.
Tracy Byrnes: I’m actually even pondering of parents that pay alimony to 1 one other. They possibly Venmo it currently. They might very properly get a 1099-Okay as a consequence of it.
Lisa Greene-Lewis: That may be potential. However I do know the IRS and third-party suppliers, they’re monitoring who’s a enterprise and who shouldn’t be. Like do you have to go into your Venmo app, they’ve an house for firms.
Self-Employed Reporting
Tracy Byrnes: I get that. OK, so if I definitely do get a 1099-Okay, what do I do with it? I’ve to report it I’m guessing someplace.
Lisa Greene-Lewis: Sure, you do must report it, notably do you have to’re self-employed. And one issue to degree out, this isn’t a model new tax laws. Self-employed have been on a regular basis alleged to report their net earnings whether it is $400 or further. And irrespective of any earnings, you’re alleged to report it. So it is just a reporting requirement for the third-party suppliers. They are often those who may be sending you these varieties. You’ll report irrespective of’s on that sort. Keep in mind, do you have to’re self-employed, though, there are tons of deductions which will lower your whole earnings and reduce the taxes you pay.
Tracy Byrnes: And the alternative issue you recognized, though, was that some states actually nonetheless have been giving these 1099-Ks out. How come?
Lisa Greene-Lewis: Yeah, it’s dependent upon the state. If that they’d conformity with the delay that the IRS issued. So it merely depends upon the particular person states.
Transactions on Third-Get together Suppliers (PayPal, eBay, Venmo)
Tracy Byrnes: So the underside line is do you have to provided an merchandise on eBay or one factor, you’re going to get a 1099-Okay if definitely you cross that threshold. Whether it is $600, though, you possibly gained’t.
Lisa Greene-Lewis: Sure, you possibly gained’t. One issue to degree out, people don’t perceive that ought to you promote non-public devices on eBay, you may be alleged to report these, although most people do have a loss. I suggest, most of the time they advertise for decrease than what they bought it for. So tax-wise, there wouldn’t be one thing to worry about do you have to had a loss.
Tracy Byrnes: All correct. So if I’m shocked and I get this 1099-Okay inside the mail, what do I do with it?
Lisa Greene-Lewis: One issue you shouldn’t have to worry with TurboTax. You’ll be able to snap a picture of your 1099-Okay and the information out of your 1099-Okay goes to the correct tax sort.
Tracy Byrnes: Lisa Greene-Lewis, TurboTax skilled and CPA, thanks for serving to us straighten that out. Pay consideration do you have to get a 1099-Okay. Thanks, Lisa.
Lisa Greene-Lewis: Thanks.
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