Every once in a while the IRS does something smart and listens to tax experts and taxpayers!
The IRS has wisely delayed implementation of the reduced threshold of $600 for third party payment processors to send Form 1099-Ks to payees.
“The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan,” said Acting IRS Commissioner Doug O’Donnell. “To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements.”https://www.irs.gov/newsroom/irs-announces-delay-for-implementation-of-600-reporting-threshold-for-third-party-payment-platforms-forms-1099-k
I’m glad to hear this news. The new threshold was creating a lot of confusion and received a lot of criticism. It is unclear when and if the IRS will enforce the new $600 threshold. There have been requests to set the threshold at $5,000 or even $10,000. We’ll wait and see!
What does this mean for homeschool group leaders?
So homeschool groups have another year to make sure their Paypal, Venmo, etc. accounts are set up using the organization’s name and EIN, not an individual’s name and SSN.
I composed a detailed blog post explaining what to do to check your Paypal, Venmo, etc accounts to be sure they are set up using the homeschool Group’s name and EIN number, not an individual’s name and SSN.
The IRS says that 2023 will be a “transition year” and give tax professionals and taxpayers more time to become aware of the new 1099-K forms and reporting requirements. The IRS says that “details on the delay will be available in the near future along with additional information to help taxpayers and the industry.” They want to “help ensure that 1099-Ks are only issued to taxpayers who should receive them” and “that taxpayers understand what to do as a result of this reporting.” Good!
It sure took the IRS long enough to make this change/delay, but I’m glad they did.