The IRS has declared 2023 as a “transition year” for a new tax reporting requirement impacting business payments received through platforms like PayPal or Venmo, or e-commerce websites like eBay, Etsy, or Poshmark. The existing limit of over 200 transactions totaling more than $20,000 for triggering form 1099-K will persist in 2023 and will reduce to $5,000 in 2024. However, in this transitional phase, the IRS will enforce a $600 threshold for triggering Form 1099-K, even for payments as low as $600 from a single business transaction. The threshold will be fully implemented for the 2025 tax year, and taxpayers exceeding this limit can expect to receive a 1099-K in 2026. This decision follows bipartisan concerns about taxpayer confusion, and the IRS anticipates a delay in the estimated issuance of 44 million 1099-Ks for 2023.

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