Changes for 2023 & 2024:

• More individuals will receive a Form 1099-K this year
• The reason: the reporting threshold for third-party networks (such as Venmo, Cash App., etc.) will eventually be reduced to $600
  • This reduced reporting threshold was originally scheduled to go into effect in 2023
  • It is now scheduled to go into effect in 2024 with a phased-in threshold amount
  • For TY 2024, the tentative threshold amount will be $5,000

For Reference:

• For TY 2024, 1099-K income that must be reported on a return:
  • Amounts from selling goods for a business and/or providing services
  • Income received from renting property
  • Selling personal items at a gain
• 1099-Ks for sale of personal items at a loss – or when an individual receives a 1099-K in error – should be reported on Form 1040, Schedule 1.

Since 2023 is again considered a transition year and the delay of the lower reporting threshold was not announced until late in 2023, some individuals may receive a Form 1099-K in early 2024 if the total transactions of their third-party transactions were between $600 and $20,000.

The following individuals who receive a Form 1099-K from a third-party network in early 2024 that was for the sale of goods in the individual’s business, for services provided or certain sales of personal items must report this income on their federal return as follows:

• Sole proprietors or farmers that receive income for goods and/ or services related to their business or farm. The income must include the amounts from their 1099-K with other amounts of income they received and report the total on Schedule C (Profit or Loss from Business) for sole proprietors or Schedule F (Profit or Loss from Farming)  for farmers.
• Individuals who receive rental income either for long-term or short-term rentals must report this income on Part I of Schedule E (Supplemental Income and Loss).
• Individuals who sell personal items, such as gold, silver bullion, coin or gems, that they are holding as an investment must report the sale on Form 8949 (Sales and Other Dispositions of Capital Assets) and recognize either a long-term or short-term capital gain or loss.
• Individuals who sell a personal item that resulted in a gain must report the gain as a short-term capital gain on Form 8949.
• Individuals who do Gig work such as for Uber or Lyft must report this income on Schedule C.

For those individuals who receive a 1099-K for amounts over $600 for the following scenarios the IRS has stated in the Form 1040 instructions for Schedule 1.

• Sale of personal items such as a car, appliances, furniture, household items, etc. at a loss.
• Received a 1099-K in error and are unable to have it corrected by the payer.

For more information see the following on the IRS website:

• IRS News Release IR 2023-221 – IRS announces delay in Form 1099-K reporting threshold for third party payment platform payments in 2023; plans for a threshold of $5,000 for 2024 to phase in implementation
• IRS Notice 2023-74 – Revised Timeline Regarding Implementation of Amended Section 6060W(e)
• IRS Fact Sheet 2023-27 (IRS announces 2023 Form 1099-K reporting threshold delay for third party payment platform payments)

• 7,500 nonrefundable credit for purchase of a new electric or fuel cell vehicle under 14,000 lbs.
• For electric vehicles, the credit is split into two $3,750 increments as follows:
  • Battery must contain at least 40% of critical minerals that were extracted or processed in a country which has a free trade agreement with US
  • At least 50% of battery components must have been manufactured or assembled in North America
• Visit Fueleconomy.gov to see if a specific vehicle qualifies for full or partial credit
• AGI limit is $150,000 ($300,000 for MFJ) for current or previous year
• Price cannot be greater than $55,000; $80,000 for SUVs/pickup trucks
• For fuel cell vehicles: The full $7,500 credit is available when the requirements for being powered by a fuel cell are met
• Information on the vehicle will be required to be entered on the new Form 8936 – Schedule A
• Beginning in 2024: The taxpayer can elect to transfer the credit to the dealership to use as a down payment for the vehicle

• Credit is lesser of …
  • 30% of purchase price; or
  •  $4,000
• Cost of the vehicle must be ≤$25,000
• Vehicle must be a model year that is at least two years prior to applicable tax year (e.g., for TY 2023, the model year must be 2021 or earlier)
• Vehicle must be purchased from a dealership
• AGI limit is $75,000 ($150,000 MFJ) for current or prior year
• This credit can be claimed once every three years
• Credit is nonrefundable
• Vehicle must be purchased for personal use
• Information on the vehicle will be required to be entered on the new Form 8936 – Schedule A