Wednesday August 31, 2022 – As we talked about on this show, the Amercian Rescue Plan required third-party e-commerce platforms like eBay, Poshmark, Mercari, Depop, and Tradesy to issue a 1099-K tax form to anyone with a total revenue of more than $600. A dramitic change to the old requirement of $20,000.00 in reveneue AND 200 or more transactions.
Well, EBay is now demanding social security numbers from anyone with $600 in sales – or their account will be locked until they comply.
Over and over, I opined that eBay and other cash app vendors would send 1099-Ks to anyone who met the threshold. Over and over, the IRS said no, this will not change the tax consequences of this sales. Only goods and services would be taxed.
Well, that’s still true. But, taxpayers who receive more than $600.00 will receive a 1099-K and have to prove to the IRS that the funds were not payments of goods or services.
It will be a nightmare for taxpayers!
Attorney Steven A. Leahy reveals the truth about 1099-Ks on Today’s Tax Talk.
Steven A. Leahy is a tax attorney in Illinois. He was the host of the long-running popular Radio Show “The IRS Radio Hour” heard every Sunday evening on AM 560 The Answer. Attorney Leahy is also the author of the book “Deal With Your IRS Problems Today!” You can get a FREE copy of this important book at FreeIRSBook.com. Or Call 24/7 (312)664-6649