RobertB4444
Expert Alumni

Get your taxes done using TurboTax

That's not quite correct.  

 

Your requirement is to issue a 1099-NEC or 1099-MISC to anyone that you paid more than $600 to in a calendar year that you are taking a business deduction for.  That requirement has not changed.

 

Paypal, CashApp, Venmo and all of the other online money moving apps have always been required to issue a 1099-K to any users that received $20,000 or more in a calendar year.  The new requirements are that they issue the 1099-K to anyone who receives $600 or more in a calendar year.  

 

These requirements were set to go into effect for tax year 2022 but have been postponed by the IRS until tax year 2023 so you may or may not receive a 1099-K this year for activity on Paypal or one of the others.  

 

If you do it needs to be included on your tax return.  So if you receive one that shows money that you received from friends or family as gifts or reimbursements then you should contact the company that issued it to you and request a corrected 1099-K.  

 

If you don't want to/aren't able to get the corrected form in time then you will need to include the amount shown on the 1099-K as 'business income' on a schedule C.  You would then need to create a business expense that matches the amount you received from 'friends and family' and call that expense 'reimbursement' or something like that.

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