The IRS recently updated its Form 1099-K Frequently Asked Questions (FAQs) to help taxpayers understand who files the form, who receives it, and what it means. Here’s a summary of the most pertinent information:
- Forms 1099-K will be used to identify potential unreported income, to develop taxpayer education and outreach efforts, and create new approaches to audits and collection.
- Individuals that receive a Form 1099-K should use it to compute gross sales and receipts and correctly calculate gross income. If you feel the information is inaccurate, you should contact the entity that issued the form.
- Forms must be provided to the IRS by March 31, 2023 if filed electronically, and by February 28, 2023 if filed on paper. Additionally, the form must report the gross amount of the payee’s transactions, with no adjustments for fees or refunds.
Since the threshold plummeted, the number of gig workers receiving these forms is expected to skyrocket. If you have questions, consult the IRS FAQ or reach out to us.