There still seems to be a lot of confusion around the new IRS tax reporting threshold of $600 starting in 2022.
No, the actual IRS tax law has not changed, only the IRS reporting requirements for online payment platforms. Anyone who generated a profit from selling anything online is expected to report income and pay income taxes regardless of whether or not they received a 1099-K. This includes popular online third-party payment processors Etsy, eBay, PayPal, Venmo, Facebook Marketplace, and Cash App.
Prior to this year, the old threshold was $20,000 per year and at least 200 transactions.
According to Zelle, this platform is actually exempt from the IRS reporting law
https://www.zellepay.com/faq/does-zelle-report-how-much-money-i-receive-irs
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Previously, the threshold was $20,000 and at least 200 transactions. This rule is part of the American Rescue Plan Act of 2021, applying to anyone who receives payments for goods/services processed by third-party payment networks. Income should be reported on an individual or business’s tax return.
Joining me in this episode is Mark Tew, CPA – known as Not Your Dad’s CPA – to clarify some of these items, answer questions, and help you tackle small business finances.
Connect with Mark – Not Your Dad’s CPA online!
https://www.youtube.com/c/NotYourDadsCPA
Accounting for Online Sellers free Facebook group:
https://www.facebook.com/groups/accountingforsellers/
Reseller Tax Academy: https://www.resellertaxacademy.com/
Mark’s website: https://notyourdadscpa.com/
https://www.instagram.com/notyourdadscpa/
Disclaimer: this video is for informational purposes only and does not constitute financial, accounting, legal or tax advice. Please consult a licensed professional about your own specific situation and small business needs.
The IRS Is Cracking Down on Small-Time eBay and Etsy Sellers
https://money.com/tax-1099-k-600-ebay-etsy/
It’s going to become harder to avoid telling the IRS about income from selling stuff online. Here’s what to know
https://www.cnbc.com/2021/03/26/its-going-to-get-harder-to-avoid-telling-the-irs-about-income-from-online-sales.html
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