Lawmakers are making efforts to keep taxpayers honest next year…
Starting January 1, 2022, anyone who sells more than $600 worth of goods or services on platforms such eBay, Etsy and Facebook will receive a 1099-K. These 1099-K reports your relevant income to the IRS.
Reporting requirements will remain unchanged during 2021, as follows…
Understanding Your 1099-K
Form 1099-K, Payment Card and Third Party Network Transactions, is an IRS information return used to report certain payment transactions to improve voluntary tax compliance. You should receive Form 1099-K by January 31st if, in the prior calendar year, you received payments:
- from payment card transactions (e.g., debit, credit or stored-value cards), and/or
- in settlement of third-party payment network transactions above the minimum reporting thresholds of –
- gross payments that exceed $20,000, AND
- more than 200 such transactions
Your books and records should accurately reflect your income, including amounts reported to the IRS on Form 1099-K. You are required to report all income received on your tax returns.
Business income, also referred to as gross receipts, is usually received in the form of cash, checks, and card payments. When calculating gross receipts for your income tax return, be sure your income includes amounts shown on Form 1099-K, along with all other types of income received.