Atlanta Buckhead Midtown and
EVERYWHERE USA - NEW TAX Requirements
In Atlanta Buckhead Midtown Westside or any other place in the United States, a TAX REPORTING CHANGE is here now and could effect real estate professionals. There are now three forms which have different usages and will be due to the IRS at different dates.
Beginning with the 2020 tax year, the IRS will require business taxpayers to report nonemployee compensation on the new Form 1099-NEC instead of on Form 1099-MISC. Businesses will need to use this form if they made payments totaling $600 or more to a nonemployee, such as an independent contractor. (intuit)
Perhaps real estate professionals will now receive Form 1099-NEC.
Form 1099-MISC will be used to report miscellaneous compensation such as rents, prizes and awards, medical and healthcare payments, and payments to an attorney or an accountant.
Form 1099-K isn't "new" but it will be used for a new purpose. If a person works in the "gig economy" or as an online business owner, there are significant income-limit reporting changes. Starting with Tax Year 2020, those earning limits will change. Instead of a $20,000 and 200 event threshold, income reporting will be triggered by $600 in earnings!
Form 1099-K tracks payments you’ve received through a payment settlement entity, or PSE. That includes tracking payments made via:
- Credit cards
- Online payment services like PayPal
- And even freelancing platforms like Upwork that manage client payments for you.
Form 1099-K shows the value of the transactions the PSE has processed for you in the past year, as well as any expenses paid on your behalf by your clients.
Top image courtesy of clipart.
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