Do you know if the same $600 threshold applies for multiple small refunds? Like if I had 5 different returns/refunds through PayPal that total over $600 but none individually over that amount?

Yes, the $600 threshold applies to the cumulative total of all transactions processed through the payment platform during the tax year, not individual transactions. So if you had multiple smaller refunds that added up to more than $600 total, PayPal would still issue a 1099-K. This is exactly why so many regular consumers are suddenly getting these forms when they weren't in previous years. The threshold used to be much higher ($20,000 AND 200 transactions), but now it's just the $600 total regardless of how many transactions it took to reach that amount.

How long did it take for the IRS to send you that letter? I think I might be in the same boat from last year's taxes...

This is a good point! My company does this and it caused massive confusion for me. I thought I had all my shares but actually about 40% had been sold automatically for withholding. The transaction history in my brokerage account showed this, but it wasn't obvious at first glance.

Does this work for state tax overpayments too? I overpaid New York state by about $3k and wondering if there's an equivalent process.

For New York State overpayments, the process is different. You'll need to contact the NYS Department of Taxation and Finance directly. They don't have a direct equivalent to the IRS transcript system, but you can request an account statement by calling 518-457-5181. For a $3k overpayment to NYS, you should file Form DTF-973 "Request for Refund of Overpayment or Credit Balance." Include all documentation showing both payments (bank statements, canceled checks, confirmation numbers). New York is generally faster than the IRS in processing these requests - typically 4-6 weeks rather than 8-12 weeks.

That's how my accountant works too. We get a secure message that says "APPROVAL REQUIRED" in the subject line with a breakdown of what's owed and a checkbox to authorize payment. Nothing happens automatically.

Thanks for confirming! I'm going to stick with my current accountant then, as that process seems much safer. I think the takeaway here is that we should all clearly establish payment procedures with our tax preparers at the beginning of the engagement, and get it in writing. As tax preparation becomes more digital, these authorization processes need to be more explicit, especially when we're talking about potentially large sums of money being transferred. I'd recommend everyone have a specific conversation about payment authorizations with their accountant before tax season next year.

That's a great tip! Do you know which international shipping methods the IRS accepts as proof of delivery? I'm in Germany so I assume Deutsche Post has some options, but not sure which ones the IRS recognizes.

Any service that provides tracking and delivery confirmation should work. DHL, FedEx, and UPS are all recognized by the IRS. Deutsche Post's registered mail service (Einschreiben) should also work fine. The key is getting a tracking number and delivery confirmation you can save. The IRS doesn't specify which carriers they prefer - they just need verifiable proof you sent it by a certain date and that they received it.

This isn't entirely accurate. An unsigned return is technically not a valid return, even if taxes were paid. The IRS can assess failure-to-file penalties in some cases if they don't receive a valid signed return, regardless of payment.

That's a really helpful suggestion! Did the IRS accept your return with the spreadsheet attachment without any issues? And did you organize the spreadsheet in exactly the same format as Form 8949 or did you use a different layout?

Yes, the IRS accepted it without any issues. I organized the spreadsheet to match Form 8949's column structure exactly - description of property, date acquired, date sold, proceeds, cost basis, gain/loss, etc. I made sure to include all the same information that would be on the official form. I also included subtotals at the bottom of each page and made sure those matched what I reported on the summary section of the official 8949. The key is making sure your attachment contains all the required information in a clear, organized format that an auditor could easily follow if needed.

I tried both last year. Koinly was better for my situation since it handled DeFi transactions more accurately. Still had to manually fix some things though. The exported 8949 forms worked fine with TurboTax.