In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the president of Dr. Friday’s Tax and Financial Firm, clarifies the evolving situation regarding 1099-K forms, which are critical for individuals and small businesses engaging in digital transactions. After the initial announcement in 2022 of a $600 threshold, the IRS has now set a new threshold of $5,000 for 2024. This update is particularly relevant for those selling on platforms like Amazon or managing small ventures that might be considered hobbies. Dr. Friday notes that anyone with gross sales exceeding $5,000 should anticipate receiving a 1099-K form, highlighting the importance of being prepared for this change to ensure compliance and accurate tax reporting.
Transcript:
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.
We keep getting calls on 1099Ks. We all know back in 2022, they announced that they were going to actually do a threshold of $600 and then it said, “Oh wait, we’re going to extend it.” Guess what? In 2024, they have announced a $5,000 threshold. So for all of you that might be selling little things on Amazon, for all of you that have small little businesses you might think is a hobby and it’s more than 5,000 gross sales, you are likely to be getting a 1099K. I actually have people that received it this year when they only had $600 or $700.
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