Before the end of 2022, the Internal Revenue Service (IRS) released guidance on several important tax issues.
Form 1099-K
Delay in Reporting $600 Transactions
With Notice 2023-10, the IRS has delayed for one year the revised threshold for reporting electronic payment transactions on Form 1099-K. In accordance with the provisions of the American Rescue Plan of 2021, third-party payment companies (e.g., Venmo, eBay, Uber, etc.) are required to issue Forms 1099-K to taxpayers who received $600 or more in electronic payments during the year. The IRS notice delays this reporting requirement until January 2024. The notice also states that the existing reporting standard of $20,000 in payments from over 200 transactions during the year continues in place for filing 2022 Forms 1099-K.
The one-year deferral of the lower reporting threshold is helpful to many individual taxpayers who might otherwise have received Forms 1099-K reporting combined amounts for both non-business electronic payments as well as business electronic payments. This transition period should help payment companies update their systems to report business-related payments and exclude personal transfers of money from friends and family more accurately.
Form 1099-K Frequently Asked Questions (FAQs)
The IRS also released a series of FAQs to assist taxpayers with inquiries around Form 1099-K. These questions include questions for individuals receiving Forms 1099-K as well as companies required to file and report payments on Form 1099-K.
Please see full list of questions here.
Standard Mileage Rates Deductions
The IRS published guidance in Notice 2023-3 with the optional standard mileage rates for 2023. Taxpayers may use these rates to deduct costs from operating a vehicle for business, charitable, medical or moving purposes. Below are the mileage rates effective as of January 1, 2023:
|
Driving Purpose |
Money per Mile |
|
Business Use |
65.5 cents |
|
Medical or Moving for Qualified Active-Duty Members of the Armed Forces |
22 cents |
|
Charitable Organizations |
14 cents |
Mileage rates are applicable to cars, vans, pickups and panel trucks that are electric, hybrid-electric, gasoline or diesel-powered vehicles.
Reporting Digital Asset Transactions
The Treasury Department and IRS announced that brokers are not required to report additional information with respect to dispositions of digital assets until final regulations are issued under sections 6045 and 6045A.
The final regulations will implement provisions of the Infrastructure Investment and Jobs Act of 2021, which expanded broker reporting requirements to include transactions of digital assets. Before the delay, brokers were expected to issue Forms 1099-B listing transactions in digital assets, similar to the reporting that taxpayers receive now for transactions in stocks, bonds and other securities. Announcement 2023-2 delays this new reporting requirement until there are final regulations. The Announcement also reminds taxpayers that the delay is only for furnishing reports by brokers. Taxpayers are still required to report all income earned from transactions involving digital assets.
For more information on these recent IRS positions or actions you may need to take for your tax return, reach out to your Cherry Bekaert tax advisor to help guide you through.
