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mwiggenhorn
Community Member

IRS delaying new rules for a year...

14 REPLIES 14
25005175
Community Member

Thanks for the info, but the WSJ article title is (as usual) misleading.

The >$600 hustle is still taxable. The delay is for the requirement for 3rd-party payment providers to provide a 1099-K.

 

Here's the official press release by the IRS: https://www.irs.gov/newsroom/irs-announces-delay-for-implementation-of-600-reporting-threshold-for-t...

mwiggenhorn
Community Member

Absolutely we still have to pay.  Always did, actually.  I just wonder if we'll get 1099s this year from Upwork or not.

wlyonsatl
Community Member

It isn't clear (at least to me) whether this delay applies to all payment platforms, or just the ones that have a lot of activity un-related to taxable income (such as Venmo and PayPal). Consumers make a lot of money transfers across these platforms, only some of which are related to tax-related income and expenses.

 

Upwork only processes payments related to work performed, so all net payments made via Upwork are related to either taxable income or tax deductible business expenses for the parties involved. Upwork should let everyone know sooner or later what the IRS is telling them about 2022 reporting.

The law was to address online marketplaces like Etsy. Before the new law, they weren't required to report a vendor's transactions unless the annual sum was at least $20,000 and the result of at least 200 transactions. Which, obviously, rules out most vendors.

The rules will eventually require all income across all platforms to be reported as taxable income.

 

Upwork is as much of a marketplace as Etsy. It's just services, rather than goods, being sold.

 

I will be surprised if the new rules are not applied to Upwork as scheduled, but it doesn't matter to me personally, as Upwork has been reporting my income to the IRS for many years.

lysis10
Community Member

I wonder if the mods can tell us if Upwork is not going to send them out then? I am always either right over or under the 200 transaction threshold. So 2020 I didn't get one but got one for 2021. I really want one, because then I know what Upwork is sending to the IRS and I can match it to my transaction sheet.  I don't know if I should just do my taxes as early as possible or wait until February.

 

I would wait until you get one and match it to the transaction sheet, because twice now that I've been around Elance/Upwork has made mistakes on the 1099s.

I would prefer to get one, too. The upside if they don't is that I'll have one more year where I don't have to untangle the mess of Upwork and PayPal both sending 1099s for the same money. 

kochubei_valeria
Community Member

Hi All,

 

Thanks for bringing this up. Our tax advisors are aware and are looking into the situation. We'll provide an update as soon as we have more information.

~ Valeria
Upwork

Valeria, now that it is the new year, any update on the 1099 situation?

kochubei_valeria
Community Member

Hi All,


I'd like to provide an update about this. The IRS has delayed their requirement for third party settlement organizations such as Upwork to report transactions of at least $600. You will still receive a Form 1099-K if you are a U.S. Person and receive at least $20,000 in payments from your clients on Upwork in 2022 that included 200 or more transactions. If you reach this amount, you will receive a Form 1099-K from Upwork in 2023.

 

We'll be updating our help articles and the announcement to reflect this change shortly.

~ Valeria
Upwork

Thank you for the update. Does this mean that US freelancers who received between $600 and $20,000 or had both $20,000+ and less than 200 transactions will not definitely not receive a 1099-K?

Thank you, Valeria!

Does this also mean that non-US residents who didn't fill out the necessary forms won't get taxed the 30% that were previously mentioned at this article? 

 

https://support.upwork.com/hc/en-us/articles/211063938-Form-W-8BEN-or-W-8BEN-E 

9008820e
Community Member

Thanks for sharing this, Mary!

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