In what is becoming a terrible habit, Congress and the IRS are once again making last-minute announcements and changes. Here is what you need to know.
1099-K reporting change is delayed
If you use third-party billing services such as Venmo, PayPal, Apple Pay, Ticketmaster, or SeatGeek, or selling platforms like Amazon or eBay, you will see more of this activity reported to the IRS on Form 1099-K...but maybe not right now.
In a last-minute about-face announced right before Christmas by the IRS, the implementation of this reporting change that would require third-party payment providers to issue 1099-Ks for anyone receiving payments over $600 has been postponed for 12 months. The IRS is moving the reporting requirement back to the initial reporting rules, $20,000 in activity AND 200 or more transactions, for the 2022 tax year.
While you may not receive a Form 1099-K to include on your 2022 tax return because of this last-minute change, don’t count on it. Congress and the IRS have been telling taxpayers and businesses for the past 21 months to prepare for this reporting change, so many of these third-party providers are already geared up to send out these 1099-Ks that were supposed to be reported on your 2022 tax return.
So whether or not you receive a Form 1099-K, remember that any income you earn is required to be reported on your tax return. If you have activities that provide income to you, such as a side business, a side hustle, or buying and selling event tickets at a profit, that activity is reportable on your tax return.
2023 mileage rates are announced
The IRS announced on December 29th the long-awaited mileage rates for use beginning in January 2023. The rates are:
Business miles: 65.5 cents (up 3 cents per mile)
Medical/Moving miles: 22 cents per mile (no change)
Charitable miles: 14 cents per mile (no change)
Vast changes in retirement plans are coming
A $1.7 trillion dollar, 4,000-page spending bill was signed into law on December 29, 2022. Within this bill are a number of changes to retirement plans. It will take some time to figure out all the elements, but most of them come into play in 2024 and beyond. One key change worth mentioning now is that the age you'll be required to start withdrawing funds from your retirement accounts will be 73, up from age 72.