Tom Meaglia photo

Tom Meaglia, ChFC®, AEP®,

CLU®, CRPC®, MSFS

Chartered Financial Consultant

Investment Advisor Representative

Chartered Retirement Planning Counselor

CA Insurance Lic. #0567507

 

Meaglia Financial Consulting

2105 Foothill Blvd., #B140, La Verne, CA 91750

 

Toll Free: 800-386-3700

Bus:         909-593-6105

Cell:         818-681-8600

Fax:         909-593-6120

 

Email: tom@meagliafinancialconsulting.com

Website: www.meagliafinancialconsulting.com

September/October 2023

Understand the New Rules for Third-Party Payments

Portland, OR, USA - Jan 5, 2022: Payment apps like PayPal and Venmo are seen on an iPhone on top of Form 1099-k. Third-party payment apps now have to report transactions more than USD600 to the IRS.

Being self-employed has its perks, but it also has its challenges. If you work from home or have a side business, you are responsible for keeping accurate records and paying your fair share of income taxes. The IRS wants to make sure of that, too, and Form 1099-K helps the IRS - and you - do just that.


What It Does
Form 1099-K provides a record of the amount that third-party payment networks transferred to you during the tax year. Prior to 2023, if you received payments from payment card transactions (including credit cards, debit cards or stored-value/gift cards) and/or in settlement of third-party payment network transactions (e.g., PayPal, Venmo, Zelle), the threshold for receiving a 1099-K was gross payments exceeding $20,000 and more than 200 transactions.

What’s Changed?
Starting in 2023, the dollar threshold for reporting transactions from third-party payment networks dropped to $600, with no transaction threshold. Each payment settlement entity from which you received income will send you a 1099-K for any transaction in which a payment card — or an account number associated with a payment card — is accepted as payment, or for any transaction settled through a third-party payment network, once the total exceeds the $600 threshold.


Keeping Track
The purpose of sending out a 1099-K is to ensure business owners report their business income. The $600 threshold is an aggregate of all the money sent to your business through third-party networks. The amount doesn’t have to come from one third-party network transaction. Several smaller transactions that add up to $600 will result in your business receiving a 1099-K.


Help with Your Tax Return
A 1099-K can help you calculate the amount of business income you received during the year. Receiving the form doesn’t necessarily mean you will owe taxes on that money, since tax deductions may offset some of your business income. However, it’s important to keep accurate records of all forms of payment received, including cash and checks, so that you don’t underreport your business income or overpay your income taxes.


A change in your business structure could affect the information on the 1099-K form, so verify that everything is correct.


SUBSCRIBE

Enter your Name and Email address to get
the newsletter delivered to your inbox.

Please include name of person that directed you to my online newsletter so I can thank them personally.


CONTACT US

Enter your Name, Email Address and a short message. We'll respond to you as soon as possible.

Thomas Meaglia is an Investment Adviser Representative of Coppell Advisory Solutions LLC, dba, Fusion Capital Management, a registered investment adviser that only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting.
Insurance and annuity products are not sold through Fusion Capital Management. Fusion does not endorse any annuity or insurance product, nor does it guarantee any insurance or annuity performance. Annuity and life insurance guarantees are subject to the claims-paying ability of the issuing insurance company. If you withdraw money from or surrender your contract within a certain time after investing, the insurance company may assess a surrender charge. Withdrawals may be subject to tax penalties and income taxes. Persons selling annuities and other insurance products receive compensation for these transactions. These commissions are separate and distinct from Fusion's investment advisory fees.
Meaglia Financial Consulting and LTM Marketing Specialists LLC are unrelated companies. This publication was prepared for the publication’s provider by LTM Client Marketing, an unrelated third party. Articles are not written or produced by the named representative.

The information and opinions contained in this web site are obtained from sources believed to be reliable, but their accuracy cannot be guaranteed. The publishers assume no responsibility for errors and omissions or for any damages resulting from the use of the published information. This web site is published with the understanding that it does not render legal, accounting, financial, or other professional advice. Whole or partial reproduction of this web site is forbidden without the written permission of the publisher.