U.S. Senator Joe Manchin (D-WV) issued a statement regarding the decision made by the Internal Revenue Service (IRS) to delay the new $600 Form 1099-K reporting threshold requirement for third-party payment organizations for tax year 2023. Instead of implementing the requirement immediately, the IRS will use a phased-in approach that will allow them to review their operational processes and address concerns from taxpayers and stakeholders. Senator Manchin introduced an amendment to require this delay, which was ultimately approved. This decision is good news for small business owners and individuals who sell goods online as it gives them more time to prepare for the new reporting requirements.
The IRS announced that payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions for tax year 2023 and prior years. The IRS plans to implement a threshold of $5,000 for tax year 2024. This decision was made after receiving feedback from various stakeholders, including taxpayers, tax professionals, and payment processors. The phased-in approach aims to address the concerns expressed by these groups while streamlining the reporting process. More information on this decision and its implications is expected to be released soon.
Senator Manchin emphasized the need for Congress to enact permanent relief regarding this issue while protecting American taxpayers and small businesses from unfair reporting burdens. He stated that he will work with his colleagues to ensure that taxation policies keep up with new online landscapes while addressing concerns expressed by stakeholders.
Overall, this decision is a positive development for small business owners and individuals who sell goods online as it gives them more time to prepare for new reporting requirements without facing unnecessary burden or confusion.