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Tax News--For Tax Year 2022

Change is effective Jan. 1, 2022. All third-party payment platforms are required to issue Forms 1099-K when payments to merchants for goods and services exceed $600. What is reported on a 1099-K? If you accepted $600 or more in 2022:

  • by payment cards for good and services, you will receive one Form 1099-K for the total amount of the payments from each payment card.

  • from a third-party payment app, you will receive one Form 1099-K from that organization for the total amount.

When will I get the 1099-K and what should I do with it? 2022 Forms 1099-K must be furnished to the payee by January 31, 2023. Use this information return with your other tax records to determine your correct tax. What is not reported on a 1099-K? Money received as a gift or reimbursement of a share of a meal or rent should not be reported on a 1099-K. Payments should indicate whether they are personal to family and friends or a business transaction for goods and services. Ensure tax records are complete before filing. The IRS cautions people in this category who may be receiving a Form 1099 for the first time – especially “early filers” who typically file a tax return during the month of January or early February – to be careful and make sure they have all of their key income documents before submitting a tax return. A little extra caution could save people additional time and effort related to filing an amended tax return. And, if they have untaxed income on a Form 1099 that isn’t reflected on the tax return they initially file, that could mean they need to submit a tax payment with an amended tax return. What if the information is wrong? If the information is incorrect on the 1099-K, contact the payer immediately, whose name appears in the upper left corner on the form. Keep a copy of all correspondence with the payer with your records. If you cannot get the form corrected, you may attach an explanation of the error to your tax return and report your income correctly. The IRS cannot correct inaccurate Forms 1099-K.

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