Posts
February 2024 Integra Alert
April 2024 Newsletter
IRS: Never mind the myths; know the facts about receiving a Form 1099-K in 2024
IRS: Never mind the myths; know the facts about receiving a Form 1099-K in 2024
WASHINGTON — To help taxpayers with filing, the Internal Revenue Service today debunked some common myths to help taxpayers understand what to do with Form 1099-K.
Following feedback from partners and to help avoid taxpayer confusion, the IRS announced in Nov. 2023, that the reporting threshold for Form 1099-K, Payment Card and Third-Party Network Transactions, would not change for 2023. The reporting threshold requirements remain over $20,000 in payments and over 200 transactions.
The IRS continues to see misinformation circulating about why taxpayers may or may not have received a Form 1099-K. Here are some common scenarios involving these forms. More information is also available at IRS.gov for What to do With Form 1099-K and frequently asked questions.
1099-K facts vs myths
Myth: People will get a Form 1099-K from friends and family sending them personal payments.
Fact: Payments from friends and family should generally not be reported on a Form 1099-K. Form 1099-K reports payments for goods or services and should not report personal payments like rent, dinner, travel and other gifts or reimbursements gifts, no matter the amount. Generally, in payment apps, the default is personal payments unless the sender designates that they’re purchasing goods or services, or it is designated a business account.
Myth: If taxpayers didn’t receive a Form 1099-K, they don’t have to report income.
Fact: According to federal law, all income is taxable unless it is specifically excluded by tax law. Taxpayers should report any profits from selling goods or services, regardless of if they receive a Form 1099-K.
Myth: Individuals won’t get a Form 1099-K if they sold goods or services under the $20,000 and 200 transactions payment threshold set for 2023 and previous tax years.
Fact: The 2023 federal reporting threshold of over $20,000 and 200 transactions is a reporting requirement, but companies may still send a Form 1099-K for goods or services payments that are less than that amount. Payment apps and marketplaces that have held backup withholding for a payee during calendar year 2023 must file a Form 945 and a Form 1099-K. Also, their state may have a lower reporting threshold, which could result in receiving a Form 1099-K, even if the total gross payments they received in the year did not exceed the federal reporting threshold.
Myth: Taxpayers owe taxes on the gross amount reported on the Form 1099-K.
Fact: The form provides the gross, or total amount of payments individuals got per app or marketplace. Just because a payment is reported on a Form 1099-K does not mean it is taxable. Taxpayers will need to use the form and other records to determine their actual tax liability when they file their tax return.
More information is available to help determine an individual’s tax obligations at IRS.gov What to do With Form 1099-K.
Myth: People can only get a 1099-K if they’re running a business.
Fact: People may receive a Form 1099-K from payment apps or online marketplaces they used to sell goods or services, or accepted payments from a bank card. See Form 1099-K FAQs on Fact Sheet 2024-03 for more information.
Myth: People don’t need to do anything with their Form 1099-K.
Fact: Individuals should use the information on the Form 1099-K with their other tax records to determine their correct tax owed. See Understanding your Form 1099-K and visit the Form 1099-K frequently asked questions for more information.
Someone who receives a Form 1099-K when they shouldn’t have should take these steps.
Myth: There’s nothing available to help individuals understand their Form 1099-K.
Fact: The IRS has a variety of sources to help people understand their form and report their taxes accurately. See IRS.gov Understanding Your Form 1099-K, What to do with Form 1099-K and Form 1099-K Frequently Asked Questions.
Tax Time Guide: IRS enhances ‘Where’s My Refund?’ tool for 2024 filing season
Tax Time Guide: IRS enhances ‘Where’s My Refund?’ tool for 2024 filing season
WASHINGTON — With millions of tax refunds going out each week, the Internal Revenue Service reminded taxpayers today that recent improvements to “Where’s My Refund?” on IRS.gov provide more information and remains the best way to check the status of a refund.
The “Where’s My Refund?” tool provides taxpayers with three key pieces of information: IRS confirmation of receiving a federal tax return, approval of the tax refund and issuing date of the approved tax refund. Information for returns from tax years 2023, 2022 and 2021 is available.
During this busy part of filing season, millions of taxpayers are anticipating refunds. In the second of the weekly Tax Time Guide series, the IRS highlights important details about “Where’s My Refund?” that can help taxpayers quickly get the information they need without calling the IRS.
The improvements to the heavily used tool follow Inflation Reduction Act funding, which is providing for a variety of IRS technological advances and upgrades designed to help taxpayers and transform agency operations.
“Where’s My Refund?” enhancements
In filing season 2024, taxpayers will benefit from important updates that reduce the need for many taxpayers to call the IRS and include:
- Messages with detailed refund status in plain language.
- Seamless access on mobile devices and with the IRS2Go app.
- Notifications indicating whether the IRS needs additional information.
How to use “Where’s My Refund?”
To use “Where’s My Refund?”, taxpayers must enter their Social Security number or Individual Taxpayer Identification number, filing status and the exact whole dollar amount of their expected refund from the original tax return for the year they’re checking.
Once the IRS acknowledges receipt of a return, refund status information is typically available within:
- 24 hours after receipt of a taxpayer’s e-filed tax year 2023 return.
- Three to four days after receipt of an e-filed tax year 2022 or 2021 return.
- Four weeks after mailing a paper return.
Taxpayers should note that the IRS updates the tool once a day, usually overnight, so there’s no need to check more often. The IRS reminds taxpayers that the fastest way to get a refund is by filing electronically and using direct deposit.
Refund delivery
Many different factors may affect the timing of refund delivery:
- The tax return has errors, requires additional review or is incomplete.
- The return needs a correction to the Earned Income Tax Credit (EITC) or Additional Child Tax Credit.
- The time between the IRS issuing the refund and the bank posting it to an account may vary since processing times fluctuate.
The IRS will contact taxpayers by mail if more information is needed to process a return. IRS phone and walk-in representatives can only research the status of a refund if:
- 21 days or more have passed since a return was filed electronically.
- Six weeks or more have passed since a return was mailed.
- “Where’s My Refund?” tells the taxpayer to contact the IRS.
If a taxpayer refund isn’t what is expected, it may be due to changes made by the IRS. These changes could include corrections to the Child Tax Credit or EITC amounts or an offset from all or part of the refund amount to pay past-due tax or debts. More information about reduced refunds is available on IRS.gov.
Filing season reminders
Taxpayers should make IRS.gov their first stop to get information on filing a tax return. There is information on Choosing a tax professional, IRS Free File, Answers to tax questions and Tips on filing a return.
Taxpayers who file electronically and choose direct deposit typically get their refund in less than 21 days. Taxpayers who don’t have a bank account can find out how to open a bank account at a FDIC-insured bank or the National Credit Union Locator Tool.
Refund information for amended tax returns is not available on “Where’s My Refund?” Use “Where’s My Amended Return?” to get the status of an amended return.
The deadline for most taxpayers to file a tax return, pay any tax due or request an extension to file is Monday, April 15.