1099-K Reminder for Tax Year 2022
For taxpayers that earned $600 or more from selling goods or providing services, you will likely get a 1099-K this year. Last year you may have received a 1099-K if you had over 200 transactions that exceeded $20,000. Now, you will trigger this event even if it is a single transaction of $600 or more. These 1099-K’s will probably come from sources like Venmo, PayPal, Zelle, etc.,
No Need to Worry
There is no need to worry though, the income will still be taxed the same, this change only affects the reporting requirements for Form 1099-K. The IRS states that it will make it easier for taxpayers to track the amounts they have received, as more accurate reporting lowers the future audits.
Consider Making Estimated Payments
As a 1099-K employee, you hopefully are aware that you should pay taxes every quarter. For 2022, those due dates were 4/18/2022, 6/15/2022, 9/15/2022, and 1/15/2023. If you missed those windows and did not file for an extension, you may owe additional penalties. Most experts recommend saving 25-30% of your pay for taxes because not only are you paying income tax, but you are also responsible for the self-employment tax, which consists of Medicare and Social Security.
For more information, please reach out to the Professionals at The Center for Financial, Legal, & Tax Planning Inc., at (618) 997-3436.