1099-K Form Reporting Threshold Guidance Announced For Tax Year 2024 and Beyond

The One, Big, Beautiful Bill Act (OBBBA) retroactively reinstated the reporting threshold for third-party settlement organizations (TPSOs) that was in effect prior to the passage of the American Rescue Plan Act of 2021 (ARPA). Therefore, TPSOs are again required to report payments on Form 1099-K only when the total amount of payments an individual receives for goods or services through their platform exceeds $20,000, and the number of transactions exceeds 200. Well-known third-party settlement organizations  include Venmo and PayPal.

If you are a creator, influencer, freelancer, rideshare driver, work a side gig or other self-employed business and you accept credit, debit, or prepaid cards you’ll receive a Form 1099-K from your payment card processor, no matter how many payments you got or how much they were for. 

If you are using a payment app or online marketplace, then you generally need to  have payments exceeding $20,000 in more than 200 transactions, to receive a Form 1099-K from your third-party settlement organization (TPSO), but they may send you a Form 1099-K at lower amounts.

One thing to remember is that if you are self-employed, you are always supposed to claim your self-employed income regardless of the amount, and if your net income is $400 or more, you are supposed to file a tax return reporting your self-employment income, since you need to pay self-employment taxes. Don’t worry about paying taxes on the entire amount reported on Form 1099-K.  You can claim your expenses directly related to your business, lowering your income reported on Form 1099-K.

TurboTax will be here to educate and guide taxpayers on what Form 1099-K is and what it means to their taxes. Taxpayers who receive Form 1099-K can get a jumpstart on their taxes with TurboTax by snapping a photo of your Form 1099-K, verifying their data, and their information will be pulled into the correct form. Whether an occasional online seller or self-employed TurboTax AI-driven expert platform provides you a done-for-you tax filing experience and connection to TurboTax Expert Full Service experts specializing in self-employed and small business taxes, providing unparalleled ease, and fast access to money.

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