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Tax newsletter update–1099K rules
Early Christmas gift. . . On December 23, 2022 the IRS decided to delay implementation of the 1099K reporting for tax year 2022.
Translation: The American Rescue Act (2021) required E commerce platforms (e.g. Ebay, Mercari, Amazon) to provide a 1099K form to sellers receiving more than $600 through the platform website. The E Commerce platform must also provide the IRS with a copy of the 1099K. The IRS matches the income reported on these forms. So if this income is not reported on the “Website seller’s” tax return, the IRS will issue a notice. This provision will not be enforced for 2022 tax year. Warning, it will be enforced in 2023.
Result: Delayed implementation means less taxpayer headache. Some E-Commerce platforms may issue 2022 1099K forms anyway.
Recommendation for E-Commerce sellers: IRS is trying to find unreported income. If selling merchandise on an e-commerce platform, consult with your tax professional on how to report to accurately reflect your profit (income less expenses) and taxes (if any ) due.