Many small business owners are familiar with third-party payment settlement networks such as Venmo and PayPal. Starting with the 2022 tax year, individuals and businesses using payment settlement networks will receive a form 1099-K that will reflect the gross amount of money received for goods or services if they are paid over $600, regardless of the number of transactions.
Previously, this form was only issued to a recipient receiving over $20,000 in gross receipts and with over 200 transactions. The gross amount does not take into account any adjustments such as, discounts, fees, refunded amounts, or any others.
If you are an individual who uses these payment settlement networks for non-business transactions and wondering if you will receive a 1099-K, you are not alone. Keep in mind that the form 1099-K only reports income received for goods or services and therefore does not apply for any non-business family and friend transactions.
If you need assistance or have any questions on the information in this article, please call your CironeFriedberg professional. You can reach us by phone at (203) 798-2721 (Bethel), (203) 366-5876 (Shelton), or (203) 359-1100 (Stamford) or email us at info@cironefriedberg.com.
