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Wilson, NC 27896
Phone: 252-237-4357
Fax: 252-243-2681
September/October 2023
New Rules for Third-Party Payments
If you work from home or have a side business, you are responsible for paying your fair share of income taxes, so be aware of the new rules.
What It Does
Prior to 2023, if you received payments from payment card transactions (including credit cards, debit cards or stored-value/gift cards) and/or in settlement of third-party payment network transactions (e.g., PayPal, Venmo, Zelle), the threshold for receiving a 1099-K was gross payments exceeding $20,000 and more than 200 transactions.What’s Changed?
Starting in 2023, the dollar threshold for reporting transactions from third-party payment networks dropped to $600, with no transaction threshold. Each payment settlement entity from which you received income will send you a 1099-K for any transaction in which a payment card — or an account number associated with a payment card — is accepted as payment, or for any transaction settled through a third-party payment network, once the total exceeds the $600 threshold.Help with Your Tax Return
A 1099-K can help you calculate the amount of business income you received during the year. It’s important to keep accurate records of all payments received, including cash and checks, so that you don’t underreport income or overpay taxes.CONTACT US
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