Receive Money through Zell Venmo or PayPal? Expect IRS Form 1099K

After recently attending an IRS seminar on 1099Ks, I was reminded of the new rules that are in effect for 2023. These rules were supposed to take effect in 2022 but because of the pandemic the new law was postponed. The rules state that PSE’s (Payment Settlement Entity) and TPSO’s (Third Party Settlement Organization) will be issuing IRS Form 1099K to recipients who receive payments over $600. That means that PayPal, Zell, Venmo, StubHub, Amazon and all the other PSE’s will be sending out 1099K’s to MANY unsuspecting taxpayers who received $600 or more during the year. If you do receive a 1099K, you’ll have to include that taxable income on your tax return (less your expenses related to that income) and it will be subject to not only income tax, but also a 15.3% Self Employment Tax! The good news is that if the income reported to you on From 1099K is incorrect (gifts, etc.), there is a method to exclude that from your taxable income for the year. Questions? If you’d like to know more, please feel free to call me at 619-497-1040. Best Wishes! Anthony W. Imbimbo, CPA, serving San Diego since 1990.