House Panel Moves to Repeal Lower 1099-K Reporting Threshold

The House Ways and Means Committee has advanced a bill to repeal the controversial reduction of the 1099-K reporting threshold. This rule lowered the threshold for reporting payments made through third-party platforms like Venmo, PayPal, and similar apps, from $20,000 and 200 transactions to just $600 in total payments received in a year. The IRS had delayed enforcing the change for the past two tax seasons, citing concerns that it would overwhelm taxpayers with millions of unfamiliar forms and create confusion. However, the new legislation seeks to fully eliminate the $600 threshold, restoring the previous reporting limits. Supporters argue the repeal would reduce unnecessary IRS involvement and alleviate burdens on gig economy workers. At the same time, critics warn that it could widen the tax gap by making it harder to track income from third-party payments.

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