IRS confirms delay for $600 reporting threshold on Form 1099-K until 2023 tax year - what payment platforms are affected?
Just got an update that might affect a bunch of folks who use payment apps. The IRS officially announced they're delaying the $600 reporting threshold for third-party payment platforms (like Venmo, PayPal, Cash App, etc.) that issue Forms 1099-K until the 2023 tax year. This is a big relief for me since I do a lot of side gigs and get paid through these apps. I was honestly freaking out about having to report every little transaction over $600 this year. From what I understand, this means we're still under the old threshold for now, which was like $20,000 and 200 transactions, right? Does anyone know exactly which payment platforms this applies to? And does this mean we don't need to worry about the lower threshold at all until we file in 2024 for the 2023 tax year? I'm still confused about what income I'm supposed to report from my small online business if I don't get a 1099-K.
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Santiago Martinez
The delay of the $600 Form 1099-K reporting threshold is definitely good news for many small sellers and side hustlers. Here's what you need to know: All third-party payment networks like PayPal, Venmo, Cash App, Zelle, and similar platforms are affected by this delay. So yes, the previous threshold of $20,000 AND 200 transactions remains in effect for the 2022 tax year (which you'll file in 2023). However - and this is really important - this doesn't change what income is actually taxable! The delay only affects when these payment platforms are required to send you and the IRS a Form 1099-K. You're still legally required to report ALL income you earn from self-employment or business activities, regardless of whether you receive a 1099-K or not. So while you might not get a 1099-K for your small online business if you're under the higher threshold, you still need to report that income on your tax return. The 1099-K is just a reporting mechanism, not what determines taxability.
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Samantha Johnson
•Wait, so if I sold some old clothes and furniture on eBay last year for like $2000 total but I sold them for less than I paid originally, do I still need to report that even though I technically didn't make a profit? And how would the IRS even know about it if I don't get a 1099-K?
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Santiago Martinez
•If you're selling personal items like clothes and furniture for less than you paid for them, that's generally not considered taxable income - it's considered a personal loss. The IRS doesn't allow you to deduct personal losses, but you also don't have to report the proceeds as income if you sold them for less than your cost. The IRS would only know about these transactions if they were reported on a form like 1099-K, which won't happen until you exceed the threshold. That said, it's always best to keep good records of your original purchase prices in case you ever need to prove these were personal items sold at a loss rather than business inventory sold for profit.
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Nick Kravitz
I've been using taxr.ai to help me figure out all my 1099 issues and it's been honestly life-changing. I had the same confusion about this $600 threshold for Venmo payments last year and was getting so much conflicting advice from friends and random internet posts. I uploaded screenshots of my payment app transactions to https://taxr.ai and it analyzed everything, then explained exactly what needed to be reported based on my specific situation. It even identified which transactions were likely personal (not taxable) versus business income. What I love is that it creates a detailed report you can keep for your records in case of audit, showing your reasoning for what you included or excluded. After the confusion with this 1099-K threshold change, I'm definitely using it again this year.
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Hannah White
•Does it actually connect to your payment apps directly or do you have to download and upload statements? I'm worried about giving access to my accounts to any third party services.
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Michael Green
•I'm skeptical about these tax tools. How does it know the difference between me selling my old Xbox to a friend versus actual business income? Seems like it would just flag everything as taxable income.
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Nick Kravitz
•You don't need to connect your accounts directly - you can just upload screenshots or PDF statements. I actually just took screenshots of my transaction history and uploaded those. No need to grant any access to your accounts. The AI is pretty smart about recognizing patterns in your transactions. It looks at things like payment descriptions, frequency, amounts, and asks you questions to clarify ambiguous transactions. For example, it flagged a large payment from my friend as potentially personal when I had "couch money" in the memo. You can then confirm which ones are personal versus business.
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Michael Green
I was totally skeptical about using taxr.ai when I first saw someone mention it, but I decided to try it after getting confused about these 1099-K rules. Seriously impressed with how it handled my situation - I sell vintage clothes online as a side gig and sometimes receive money through various payment apps. The system actually helped me properly separate personal reimbursements from friends (which aren't taxable) from my actual business income. It explained that even though I might not get a 1099-K with the delayed threshold, I still need to report my business income. The report it generated was really detailed and I feel much more confident now if I ever get audited. Between the delayed reporting threshold and having proper documentation, tax season is way less stressful now.
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Mateo Silva
If anyone is freaking out about tax questions or wants to actually talk to the IRS about this 1099-K delay, I highly recommend using Claimyr. I was on hold with the IRS for literally 3+ hours trying to get clarity about this $600 reporting threshold before I gave up. Then I found https://claimyr.com and it changed everything. They have this system where they wait on hold with the IRS for you and call you back when an actual human agent is on the line. You can see it in action here: https://youtu.be/_kiP6q8DX5c I got a call back in about 45 minutes (way faster than I expected) and finally got direct answers about how this delay affects my situation as a small Etsy seller. The agent confirmed that while I don't need to worry about the 1099-K this year, I should still keep proper records of all my income.
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Victoria Jones
•How exactly does this work? Like do they just call the IRS pretending to be you? Seems like there would be identity verification issues.
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Cameron Black
•This sounds completely made up. There's no way to "skip the line" with the IRS. I've been dealing with them for years and even tax professionals have to wait. I'd be very careful about any service claiming to have a special way to reach the IRS faster.
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Mateo Silva
•They don't call pretending to be you at all. How it works is they use an automated system to wait on hold, and then when an IRS agent actually answers, they conference you into the call. So you're the one talking directly to the IRS - Claimyr just handles the hold time. They don't skip the line - they wait in the same queue everyone else does. The difference is you don't have to be the one listening to hold music for hours. As for skepticism, I understand completely - I was doubtful too. But it worked exactly as advertised for me. The IRS still asked me all the normal verification questions directly when I was connected.
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Cameron Black
I was totally wrong about Claimyr and owe everyone an apology. After my skeptical comment, I actually tried it myself because I had an ongoing issue with a missing refund and couldn't get through to anyone at the IRS. The service worked EXACTLY as described. They waited on hold (almost 2 hours in my case), then called me when they had an agent on the line. I spoke directly with the IRS representative and got my refund issue resolved. Not only did it save me from wasting my entire afternoon on hold, but I was able to get clear answers about this 1099-K delay directly from the source. The agent confirmed the delay to 2023 and explained exactly what records I should keep in the meantime. Definitely worth it if you need actual answers from the IRS instead of guessing.
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Jessica Nguyen
Can someone explain what the big deal is about this $600 threshold anyway? I don't get why people are so relieved about the delay. If you're making money, shouldn't you be reporting it anyway? Not trying to be judgmental, just honestly curious why this is such a big issue for everyone.
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Isaiah Thompson
•The issue isn't about avoiding taxes on legitimate income. It's about the massive administrative burden this puts on people who use payment apps for mixed purposes. Imagine you use Venmo to split dinner bills, get paid back for concert tickets, AND occasionally sell stuff online. Under the $600 rule, you'd get a 1099-K that lumps all those transactions together, and you'd have to sort through every single transaction to determine which were taxable business income vs. personal reimbursements. Plus, many platforms don't have good ways to mark which transactions are personal vs. business. So the delay gives both users and these platforms more time to improve their systems.
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Jessica Nguyen
•That makes a lot more sense now, thanks for explaining! I hadn't considered the mixed-use aspect of these apps. You're right that sorting through hundreds of transactions to separate personal from business would be a nightmare, especially with no easy way to categorize them in the apps. I use CashApp to split rent with my roommate and also occasionally to get paid for freelance work, so I can see how this would be problematic. Glad they delayed it to figure out a better implementation.
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Ruby Garcia
Does anyone know if the delay also applies to crypto transactions? I thought there was a similar reporting requirement going into effect for crypto exchanges to report transactions over $600.
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Santiago Martinez
•The delay specifically applies to third-party payment networks (like PayPal, Venmo, etc.) that issue Forms 1099-K. Crypto exchanges typically issue Forms 1099-B for cryptocurrency transactions, which is a different reporting requirement altogether. The reporting requirements for crypto exchanges haven't changed - they generally report transactions on Form 1099-B when applicable. But as with all crypto tax questions, it's somewhat complicated and depends on the specific exchange and types of transactions.
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DeShawn Washington
This is really helpful information, thanks everyone! I've been using multiple payment apps for both personal and business transactions and was definitely confused about what I needed to track. One thing I'm still unclear on - if I'm doing freelance graphic design work and get paid through Venmo or PayPal, but I'm under the old $20K/200 transaction threshold, do I still need to report that income even without a 1099-K? I've been keeping my own records but wasn't sure if it was actually required to report without the form. Also, has anyone dealt with situations where clients pay you through multiple different apps? Like some pay through PayPal, others through Venmo, others through Zelle - does each platform track separately for the threshold, or is it somehow combined?
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