History repeats itself sometimes and this is a good time!
The IRS is again delaying the implementation of lower reporting thresholds for Form 1099-K. Form 1099-K is a form a taxpayer (in this case a homeschool group) will receive if they use third-party payor services like Paypal, Venmo, Stripe, etc. to receive payments.
Following feedback from taxpayers, tax professionals and payment processors and to reduce taxpayer confusion, the Internal Revenue Service today released Notice 2023-74 announcing a delay of the new $600 Form 1099-K reporting threshold for third party settlement organizations for calendar year 2023.
As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year. This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn’t expect one and may not have a tax obligation. As a result, reporting will not be required unless the taxpayer receives over $20,000 and has more than 200 transactions in 2023.
And more good news, after hearing from many taxpayers, the IRS is planning for a threshold of $5,000 for tax year 2024 as part of a phase-in to implement the $600 reporting threshold enacted under the American Rescue Plan (ARP). It’s a start!
If you’re wondering what this is all about and how if affects you as a homeschool group leader, my blog post from a year ago will explain the background: https://homeschoolcpa.com/irs-delays-implementing-new-600-threshold-for-form-1099-ks/
Carol Topp, CPA