If you sell items online, we have some not-so-great news. CNBC reports that the IRS is going to change how it taxes people who utilize platforms such as Etsy, eBay, Uber, and PayPal for selling their goods and services.
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In the past, the IRS has only required online sellers to submit a 1099-K tax form if they partake in at least 200 transactions worth, in total, at least $20K. Next year, this is all going to change. Sellers who make at least $600 in 2022 will have to file a 1099-K in 2023 no matter how many transactions they engage in. $20K to $600 is a pretty significant difference.
Of course, this adjustment doesn't automatically mean that you will be taxed for what you make. That depends on your individual situation and how you're filing your taxes. What it does mean is that if you accrue over $600 in sales, you have to report all of that income to the IRS.
The good news is that you won't have to fill out a 1099-K on your own. The affected platforms, like eBay and Etsy, should send you the form to file based on what you make on those sites in 2022.
It will be interesting to see how this all plays out and if it will affect the future of online selling.