1099K - What you need to know

As April 1st and the tax deadline approaches, many small business owners and consultants have worked as 1099 goods and services providers, and have done so for decades.   

As the IRS gets further involved with e-commerce, and brings the world of Pay Apps into its fold, expect to see changes in the requirements for reporting of income.

I have integrated Zelle™ into my payment structure and I have both a personal and a business Zelle™ Account.   This is my preferred payment method for electronic transfers and many of our clients (both for design services and consulting services) have come to love the ease with which they can pay our invoices for services rendered each month.   While some clients have lower limits than others, we are able to navigate the waters fairly easily to accommodate their payments.  

I have used Paypal™ in the past, when selling my book, at events and that too, made it easy to manage transactions for my team while I was signing books and meeting people.  

There are new thresholds for 1099 reporting that you should be aware of.   While it used to be much higher, the IRS will require payment apps to send 1099 K forms to anyone receiving more than $600 in payments for goods and services.  I found THIS great article by Kelly R. Taylor, the Tax Editor at Kiplinger, that details the changes coming down the pike for 2023 and I suggest you have a look if you are using any payment apps. 

It is also a good idea to make sure that you are keeping your business and personal transactions separate so that you are not responsible for reporting personal gifts, payments to friends, etc.