IRS Sheds Light on Form 1099-K Reporting in Free Webinar, Plans for Lower Reporting Threshold in 2024

Internal Revenue Service (IRS)

WASHINGTON, D.C. — The Internal Revenue Service (IRS) is reaching out to taxpayers across the country with an online video series that seeks to demystify the complexities of tax forms and processes. One such video, a webinar on Form 1099-K, was recently made available free of charge on the IRS’s website, aiming to guide taxpayers who receive income typically reported on this form.

Form 1099-K, Payment Card and Third Party Network Transactions, is a tax document issued by payment settlement entities to report the payment transactions they process for their clients. This form is particularly relevant to individuals and businesses who use popular payment apps and online marketplaces to receive payments.

The December 14 webinar came on the heels of a November 21 announcement by the IRS that clarified the reporting requirements for Form 1099-K for the tax year 2023. Under the current rules, payment transactions exceeding $20,000 and totaling more than 200 transactions within a year need to be reported. However, the IRS also signaled a significant change for 2024, planning to lower the reporting threshold to $5,000.

So why is this important?

Lowering the reporting threshold means more taxpayers will receive Form 1099-K from their payment processors, which could increase the visibility of their earnings to the IRS. This step could potentially enhance the accuracy of reported income and ensure better compliance with tax laws.

In addition to illuminating these changes, the webinar delved into several related topics, including how to handle transactions between friends and family, how to report 1099-K amounts on a 2023 return, what steps to take if a 1099-K is incorrect, and the importance of recordkeeping. The session also provided a treasure trove of IRS resources to further assist taxpayers.

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Despite its primary audience being tax professionals, the webinar has broader relevance, offering valuable insights to anyone interested in understanding Form 1099-K better. Over 9,000 individuals registered for the live session, reflecting the growing interest and need for clarity on this topic.

The IRS’s attempts to taxpayer education extend beyond this single webinar. The agency’s video portal hosts a range of archived webinars on diverse subjects, including tax-related identity theft, special tax rules for Americans living abroad, employer-sponsored educational assistance programs, and the Employee Retention Credit.

Ultimately, while tax professionals can earn continuing education credits by attending these live sessions, all taxpayers stand to gain from these resources. As we approach the 2024 tax season, the importance of understanding tax forms and processes cannot be overstated.

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