A major legislative change in tax reporting is one of the provisions of the American Rescue Plan, which was enacted in March of last year.
If you are a small business owner who files taxes as a sole proprietorships; partnership; LLC or corporation and earn more than $600 via online payment platforms, you will soon start receiving a Form-1099-K, “Payment Card and Third-Party Network Transactions” (TPSOs and EPFs). The information you provide on this form will be sent to your client and the IRS. As a result, your clients will, in some cases, receive a slew of these forms in early 2023. Third-party processors such as Venmo, PayPal, Cash App, Zelle, or other vendors, will be providing these forms for you to complete and return. In addition, if you sell products via Amazon, Etsy, eBay, or at craft shows or face-to-face, you will receive the 1099-K.