In a recent release, the IRS told taxpayers who typically file their returns in late January or early February to consider waiting until later in 2023.
The IRS warned that early filers may receive a Form 1099-K, which will track third-party payments systems like Venmo, PayPal, Uber, Etsy or Facebook Marketplace.
Before filing early, early filers should “be careful and make sure they have all of their key income documents before submitting a tax return,” the IRS said. The caution is due to a change in how the IRS issues 1099-K forms.
Previously, the agency issued Form 1099-Ks when the total number of transactions exceeded 200 for the year and the aggregate amount of those transactions was more than $20,000. The American Rescue Plan Act of 2021 lowered the reporting threshold to $600 from any one source.
The deadline for companies to send the 1099-K form is Jan. 31, 2023. Due to the change, tax experts recommend taxpayers file in late February or early March. Read more.