You received a 1099-K from a Third Party Settlement Organization. Now what?

When the American Rescue Plan Act passed in 2021, it drastically dropped the 1099-k requirements for 2022 from $20,000 (and 200 transactions) to $600 from any one platform.  You may receive a 1099-K if you:

• Received money from friends or family via Venmo, Paypal or other payment apps.

• Had hobby income from companies like Etsy.

• Sold items from sites like Ebay or Ticketmaster.

• Worked for app-based vendors like Uber or DoorDash.

• Received real estate income from companies like AirBnB or VRBO.

This is just a short list of ways that may have generated a 1099-K for you. There are many other types of transactions that could trigger this form. Which means you will need to consider how to report the amounts from the forms on your tax return.

Here’s what’s important to know:  Not all 1099-K transactions are alike, and the tax treatment can vary. Whether it’s personal transactions, hobby income, business income or anything else, we can help you with the proper way to report these items.

Here’s a link to the IRS’ FAQs on this topic.

Form 1099-K Frequently Asked Questions: Individuals | Internal Revenue Service (irs.gov)