Dufour Tax Group, LLC

Dufour Tax Group LLC specializes in providing comprehensive strategic tax planning and compliance services to individuals and businesses across the globe. With a broad set of in-house skills and experience, we have the flexibility to work with a multitude of clients – from startups to multimillion

215 Commercial Street Portland, ME, 04101 United States

Dufour Tax Group LLC specializes in providing comprehensive strategic tax planning and compliance services to individuals and business across the globe.

With a broad set of in-house skills and experience, we have the flexibility to work with a multitude of clients - from startups to multi-million dollar enterprise-level companies.

New Rules for Online Transactions & Form 1099-K

December 14, 2022  /  Kelly Dufour

UPDATE 12/23/22 – The IRS has delayed the new 1099K reporting threshold for tax filers and online platforms until the 2023 tax year, to be filed in 2024.


Effective for the 2023 tax season, there will be a new policy initiated by the IRS requiring any business income over $600 generated through a “Third Party Network Transaction” to be reported on a form 1099-K. A third-party network transaction is defined an online payment made through platforms such as Venmo, Etsy, PayPal, and Airbnb. Under the new policy for next year, forms will be sent to both taxpayers and the IRS for anyone meeting the newly determined threshold of $600 for sales/services.  This will ultimately include a more significant number of small providers of online goods/services. Additionally, there will be no minimum requirement for the number of transactions necessary to trigger this newly defined threshold.

 What is a 1099-K and how do I know if I might get one?

 A 1099-K is a tax form used to report business transactions done online or through credit cards to ensure taxpayers are reporting all income received from these sources. In previous years, companies such as these would release a 1099-K to anyone engaging in payments of more than 200 transactions totaling at least $20,000. Companies obligated to prepare this document include any online or credit card platform where such transactions take place. Anyone who receives more than $600 in credit card payments or online sales can expect to receive a 1099-K starting in 2023, although not all websites are required to provide one to every individual, and some may fail to do so when necessary. Some companies, such as Zelle for instance, directly connect the bank accounts between a seller and a buyer. Because of this, they themselves are not hosting the sales and do not have to provide their users with the 1099-K report.

  When and how will I access my 1099-K?

 If you participate in one of the previously mentioned online platforms or receive more than $600 in credit cards payments for goods/ services, you should expect to receive a form 1099-K. 1099-Ks are required to be issued by January 31st and are typically issued via mail. Some providers may have this form available on your online account as well.

  What should I do if I receive a 1099-K and how do I report it?

 Anyone who receives a 1099-K should already be reporting the income it details on their individual tax return or providing the information to their tax preparer. All income recorded on a 1099-K should be included as income received during the year from sales/business activities regardless of having received the form or not. This new policy only requires that the income received from a business transaction is reported, it does not require any reporting of personal transactions such as money being sent through Venmo to reimburse a friend. With the advent of the online service economy, some Americans have failed to acknowledge what they earned to the Government through these mediums. It is often the case that many people only take part in singular transactions of items such as old furniture, or business income they deem to be of a negligible amount. While this information and documentation will be new to many taxpayers for the 2023 year, there is no official change in the necessity to disclose all earnings for tax purposes. No new rates or additional taxes are being imposed; the objective of this policy is simply to ensure income meeting the required thresholds are being reported to the IRS.

  What will happen if I don’t report my 1099-K?

 Those who fail to comply with reporting their income from these sources will be subject to scrutiny, adjustments, and potentially fines from the IRS for the lack of discernment or intentional wrongdoing. In a similar fashion, another thing for taxpayers to keep in mind is to report income that may be received from additional online platforms, such as gambling winnings from websites such as DraftKings or FanDuel. These amounts, like those received from smaller business transactions previously discussed, may be trivial in nature but are expected to be included on your individual tax return. When in doubt whether something should be included in your taxes, it is always best practice to consult your tax professional with any questions or concerns.