Heads Up on New 1099-K Reporting Next Year

Currently, banks and other third-party settlement organizations (TPSOs) that process credit card and electronic payment transactions for goods and services must report them to the IRS on Form 1099-K if they are $20,000 or more and there are more than 200 transactions. Effective for transactions after December 31, 2021, the reporting threshold drops to $600 for the year and the number of transactions no longer counts. So, even a single transaction of $600 in 2022 that’s settled through a TPSO will be reported. This reporting change is designed in part to make sure that gig workers, such as Uber drivers not classified as employees, report their income.  #IdeaoftheDay