Hello, Happy New Year! There have been multiple PSAs/notices about this floating around in the community but I wanted to make a final reminder post for any US-based sellers using Paypal.

Starting January 1, 2022: The federal threshold for issuing 1099-K will drop to $600 with no minimum transaction level. This means if you receive $600 or more in sales on Paypal in 2022, you will receive a 1099-K tax form.

Previously, Paypal only sent you a 1099-K if your total transactions for the year were $20k+ AND numbered 200 or more. There are some states that already have similar limits, so this will not be new for them. You can find more information online, such as in this article: stepanchukcpa.c....

What does this mean?

* If you receive $600 or more total throughout 2022 using Goods & Services, you will receive a 1099-K tax form from Paypal.

* This does not apply to Friends & Family transactions (but please think twice before using this due to fewer seller/buyer protections!)

* You don't necessarily have to pay taxes on sales, it's just more paperwork (to properly document your cost basis - so original cost of item, mileage, postage, fees, etc.) when filing taxes. And that's assuming you get audited - if not, it's just a few extra numbers when filing.

You can refer to the previous PSA article I made for more discussion/info in the comments: blog/50810

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TLDR - For most people this will probably just be a little extra work/numbers to fill in while filing taxes. I would recommend keeping good records of transaction/cost information in the rare event that you get audited, if you don't already.

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