Monday, September 18, 2023 – Listen up, taxpayers. You think you know, but you have no idea. The game’s changing, especially when it comes to taxes and the IRS. I’ve been teaching high-level classes on this stuff for years, and let me tell you, the best way to master something is to teach it. Currently, I’m working on my third class with Lorman Education Services, and we’re diving deep into the world of IRS Form 1099.
Now, I bet most of you have heard of a 1099 form. You’ve probably even received one. But do you actually know the true power behind this simple piece of paper? It falls under what they call “Information Returns,” and these are the IRS’s watchdogs, making sure you, me, and everyone else are paying our fair share.
Last year, get this, there were nearly 5.5 billion of these third-party information returns filed—5.5 billion! And a whopping 86% of those were 1099 forms. But it doesn’t stop there. There are 21 different flavors of this form, and the IRS just introduced a new one, Form 1099-DA, for digital assets. That’s right, they’re keeping an eye on your crypto.
And you know what else is hitting the headlines? The rules for the 1099-K cash apps. They were supposed to kick in, but Uncle Sam pushed it back a year. So, in 2023, the game changes. The threshold for getting hit with a 1099-K just plunged from $20,000 and 200 transactions to a mere $600. You think this won’t affect you? Think again.
Erin Collins, the Taxpayer Advocate, is speculating that this change might double the number of 1099s next year. If that happens, well, brace yourself for the IRS to be slower than molasses, trying to sort it all out.
So, if you’re in business, or thinking of getting into business, you better get your ducks in a row. These 1099 rules aren’t just random guidelines; they’re how the IRS keeps tabs on us. So educate yourself. It’s not just about making money; it’s about understanding the rules of the game so you can play it better than anyone else.