What is the positive part about the 1099k requirements through 3rd party being delayed another year?

Submitted by sprinklesnglitz t3_zyd0gu in personalfinance

I just want clarification. Throughout 2022, sellers were told that all 3rd party marketplaces like eBay, Etsy, PayPal, etc were required to send a 1099k for any sales above $600 (as opposed to $20,000 previously). The other day they delayed it another year to help sellers prepare better, and sellers were super thrilled about this.

I am wondering what the perk is here? I mean even if you don't get a 1099k sent to you, you are still supposed to file taxes on all your sales through a different form anyways and go through the same meticulous process. What's the huge perk here? How does 'not' getting the 1099k sent to you this year take a load off your shoulders?

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Werewolfdad t1_j2545ly wrote

It’s not a perk. It’s an extension so the irs can develop guidance and the payment processor can become compliant

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Rave-Unicorn-Votive t1_j254p36 wrote

>I mean even if you don't get a 1099k sent to you, you are still supposed to file taxes on all your sales through a different form anyways and go through the same meticulous process.

The majority of people affected do not understand this part.

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nothlit t1_j255rmk wrote

I would venture to guess that the average person has no idea what any of this is about. Based on the posts here over the last year, people’s understanding of this new 1099-K rule tends to be something along the lines of “if my friend Venmos me $600 (regardless of the reason) I have to pay taxes on it.” They don’t understand that it only applies to goods & services payments, and that the amount reported may not be entirely taxable, so they hear about this delay and they are relieved because they get to put off figuring it out until a year from now when they will all start to panic once again.

> even if you don't get a 1099k sent to you, you are still supposed to file taxes on all your sales

A lot of people are under the mistaken impression that if they don’t get a 1099, then they can get away with not reporting the income.

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RoastedAsparagus821 t1_j256s4n wrote

Lack of financial sophistication related to tax matters among the general public. It was clear nobody understood the change or their existing obligations.

The only reason to delay is to raise it back to $20k or something close.

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-NoLongerValid- t1_j25acux wrote

> How does 'not' getting the 1099k sent to you this year take a load off your shoulders?

The small time flippers get to cheat on their taxes for another year with no real way of getting caught. And more importantly the Average Joes that that use those services for stuff that doesn't generate any tax liability should have a way to designate such transactions one the guidance is issued.

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peter303_ t1_j25audr wrote

They delay helps both financial companies and users insure they are marking shared payments as personal, instead of business. The first would not be taxable, while the other is taxable.

For example someone may want to pay the restaurant bill most of time to get extra points on their credit card. They might venmoed more than $600 from dinner companions over the year when sharing the bill.

I had not paid close attention to this recently, so dont know if I had been making a mistake.

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-NoLongerValid- t1_j25d2zr wrote

Replying to sprinklesnglitz (#1,155,354)

The 1099k is sent to both you, and the IRS. If you don't get a 1099, the IRS doesn't know about the income... If the IRS doesn't know about the income, they aren't going to know if you fail to declare it when you file; if you catch my drift.

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