The IRS is giving everyone an extra year (again) to get up to speed with new reporting rules for payment apps and online marketplaces.
For the 2023 tax year, the threshold to receive a Form 1099-K stays at $20,000 and over 200 transactions, with a $5,000 threshold in 2024 before lowering to $600 in future years.
What does this mean for your business? For this tax reporting cycle, it’s business as usual (same as the 2022 tax reporting cycle). If you paid out $20,000 or more or issued 200 or more transactions to an individual payee in 2023, you will need to issue a 1099-K.
Bottom line, take advantage of this transition period to make sure your information reporting workflow is as automated as possible coming in 2024.
You can read more on this topic from the IRS here:
IRS Notice 2023-74 (PDF)
