What Taxpayers Should Know About Big Changes to Form 1099-K Reporting
H&R Block announces significant changes to Form 1099-K reporting requirements for tax year 2024. Payment platforms must now issue 1099-K forms to individuals receiving $5,000 or more in payments on any single platform, down from the previous threshold of $20,000 and 200 transactions. The IRS expects this change to impact approximately 20 million people over the next two years.
The new requirements particularly affect gig workers, freelancers, and casual sellers who must now track their income more carefully. While this means more complex tax filing, self-employed individuals can benefit from various business tax deductions, including expenses for materials, shipping, advertising, and platform fees.
H&R Block recommends creating separate business and personal profiles, maintaining detailed transaction records, tracking expenses, and considering professional tax assistance to ensure compliance and maximize deductions. The company offers support through Block Advisors' small business certified tax pros and their Resource Center.
H&R Block annuncia cambiamenti significativi ai requisiti di reporting del Modulo 1099-K per l'anno fiscale 2024. Le piattaforme di pagamento devono ora emettere i moduli 1099-K per gli individui che ricevono $5.000 o più in pagamenti su qualsiasi singola piattaforma, un abbassamento rispetto alla soglia precedente di $20.000 e 200 transazioni. L'IRS si aspetta che questo cambiamento impatti circa 20 milioni di persone nei prossimi due anni.
I nuovi requisiti influenzano in particolare i lavoratori autonomi, i freelance e i venditori occasionali che devono ora tenere traccia dei loro guadagni con maggiore attenzione. Anche se ciò significa un processo di dichiarazione dei redditi più complesso, le persone autonome possono beneficiare di varie detrazioni fiscali aziendali, comprese le spese per materiali, spedizione, pubblicità e commissioni delle piattaforme.
H&R Block consiglia di creare profili aziendali e personali separati, mantenere registri dettagliati delle transazioni, monitorare le spese e considerare l'assistenza fiscale professionale per garantire conformità e massimizzare le detrazioni. L'azienda offre supporto attraverso i professionisti fiscali certificati per piccole imprese di Block Advisors e il loro Centro Risorse.
H&R Block anuncia cambios significativos en los requisitos de declaración del Formulario 1099-K para el año fiscal 2024. Las plataformas de pago ahora deben emitir formularios 1099-K a individuos que reciban $5,000 o más en pagos en cualquier plataforma única, una disminución del umbral anterior de $20,000 y 200 transacciones. Se espera que el IRS afecte aproximadamente a 20 millones de personas en los próximos dos años.
Los nuevos requisitos afectan particularmente a los trabajadores independientes, freelancers y vendedores ocasionales que ahora deben hacer un seguimiento de sus ingresos con más cuidado. Si bien esto significa un proceso de declaración de impuestos más complejo, los trabajadores autónomos pueden beneficiarse de varias deducciones fiscales comerciales, incluidas los gastos de materiales, envío, publicidad y tarifas de plataforma.
H&R Block recomienda crear perfiles empresariales y personales separados, mantener registros detallados de las transacciones, rastrear gastos y considerar la asistencia fiscal profesional para asegurar el cumplimiento y maximizar las deducciones. La empresa ofrece apoyo a través de los profesionales fiscales certificados de Block Advisors para pequeñas empresas y su Centro de Recursos.
H&R Block이 2024 회계 연도에 대한 1099-K 양식 보고 요건의 중대한 변경 사항을 발표했습니다. 결제 플랫폼은 이제 $5,000 이상의 지불금을 받는 개인에게 1099-K 양식을 발급해야 하며, 이전의 $20,000 및 200건 거래 기준에서 감소했습니다. IRS는 이 변동이 향후 2년간 약 2천만 명에게 영향을 미칠 것으로 예상하고 있습니다.
새로운 요건은 특히 긱 경제 근로자, 프리랜서 및 비정기적으로 판매하는 사람들에게 영향을 미치며, 이들은 이제 자신의 수입을 더 면밀히 추적해야 합니다. 이는 복잡한 세금 신고를 의미하지만, 자영업자는 자재, 배송, 광고 및 플랫폼 수수료와 같은 다양한 사업 세금 공제를 받을 수 있습니다.
H&R Block은 별도의 사업 및 개인 프로필을 만들고, 거래 기록을 자세히 유지하며, 비용을 추적하고, 컴플라이언스를 보장하고 공제를 극대화하기 위해 전문 세무 지원을 고려할 것을 권장합니다. 이 회사는 Block Advisors의 소기업 인증 세무 전문가와 자원 센터를 통해 지원을 제공합니다.
H&R Block annonce d'importants changements concernant les exigences de déclaration du formulaire 1099-K pour l'année fiscale 2024. Les plateformes de paiement doivent désormais délivrer des formulaires 1099-K aux personnes recevant 5 000 $ ou plus de paiements sur une seule plateforme, en baisse par rapport au seuil précédent de 20 000 $ et 200 transactions. Le fisc (IRS) s'attend à ce que ce changement ait un impact sur environ 20 millions de personnes au cours des deux prochaines années.
Les nouvelles exigences concernent particulièrement les travailleurs occasionnels, les freelances et les vendeurs occasionnels qui doivent désormais suivre leurs revenus plus attentivement. Bien que cela signifie une déclaration de revenus plus complexe, les travailleurs indépendants peuvent bénéficier de diverses déductions fiscales pour entreprises, y compris des dépenses pour les matériaux, l'expédition, la publicité et les frais de plateforme.
H&R Block recommande de créer des profils d'entreprise et personnels séparés, de tenir des registres détaillés des transactions, de suivre les dépenses et de considérer l'assistance fiscale professionnelle pour garantir la conformité et maximiser les déductions. L'entreprise propose un soutien via les professionnels fiscaux certifiés de Block Advisors pour les petites entreprises et leur Centre de ressources.
H&R Block kündigt bedeutende Änderungen der Meldepflichten für das Formular 1099-K für das Steuerjahr 2024 an. Zahlungsplattformen müssen nun 1099-K-Formulare an Personen ausstellen, die 5.000 $ oder mehr auf einer einzelnen Plattform erhalten, ein Rückgang von der vorherigen Schwelle von 20.000 $ und 200 Transaktionen. Der IRS erwartet, dass diese Änderung etwa 20 Millionen Menschen in den nächsten zwei Jahren betreffen wird.
Die neuen Anforderungen betreffen insbesondere Gig-Arbeiter, Freelancers und Gelegenheitsverkäufer, die nun ihre Einkünfte genauer verfolgen müssen. Obwohl dies eine kompliziertere Steuererklärung bedeutet, können Selbständige von verschiedenen Geschäftsausgabenabzügen profitieren, einschließlich Kosten für Materialien, Versand, Werbung und Plattformgebühren.
H&R Block empfiehlt, separate Geschäfts- und persönliche Profile zu erstellen, detaillierte Transaktionsaufzeichnungen zu führen, Ausgaben zu verfolgen und professionelle Steuerhilfe in Betracht zu ziehen, um die Einhaltung sicherzustellen und Abzüge zu maximieren. Das Unternehmen bietet Unterstützung durch die zertifizierten Steuerfachleute von Block Advisors für kleine Unternehmen und deren Ressourcen-Center an.
- Expanded business tax deduction opportunities for self-employed individuals and gig workers
- Potential tax savings through S Corp filing strategy for expanding businesses
- Professional tax support services available through Block Advisors
- Lower 1099-K reporting threshold ($5,000) increases tax filing complexity
- Higher risk of IRS audits and notices for gig workers and small businesses
- Additional paperwork and record-keeping requirements for affected taxpayers
Insights
The IRS's dramatic lowering of the Form 1099-K reporting threshold to $5,000 represents a pivotal market opportunity for H&R Block (HRB). This regulatory change is poised to significantly expand H&R Block's addressable market, potentially driving substantial revenue growth in the coming tax seasons.
The timing is particularly strategic, as the gig economy continues to expand, with Gen Z increasingly participating in multiple income streams. This demographic trend, combined with the more complex reporting requirements, creates a perfect storm that could drive many first-time customers to seek professional tax preparation services.
From an investor perspective, several key factors make this development particularly noteworthy:
- Market Expansion: The IRS estimates this change will impact approximately 20 million people over two years, representing a massive new customer acquisition opportunity for H&R Block.
- Recurring Revenue Potential: As these new tax situations become more complex, many customers are likely to become repeat clients, enhancing H&R Block's stable revenue base.
- Competitive Advantage: H&R Block's established infrastructure, including both digital solutions and in-person services, positions it well to capture market share from both do-it-yourself filers and smaller tax preparation services.
- Technology Leverage: The company's Block Advisors platform and digital tools provide scalability to handle the increased volume while maintaining operational efficiency.
However, investors should monitor several risk factors:
- Potential margin pressure if significant investment in additional staffing or training is required
- Competition from other tax preparation services and software providers
- The possibility of future regulatory changes that could impact the company's business model
Block Advisors by H&R Block demystifies a change impacting millions of small businesses, freelancers, and gig economy side hustlers this tax season
KANSAS CITY, Mo., Jan. 22, 2025 (GLOBE NEWSWIRE) -- The millions of Americans with revenue-generating side hustles and casual sellers may be in for a big surprise this January—an unexpected tax form called the 1099-K. Payment platforms, apps and online marketplaces must issue a Form 1099-K to anyone who received
This is a substantial change from the prior threshold, in which 1099-Ks were only sent to individuals who received more than
Implications for Side-Hustlers and Casual Sellers
What does this mean for taxpayers and the explosive growth of the side-hustle economy? Many Americans are supplementing their incomes to cover necessities and fund their dreams. Some resell highly coveted concert tickets or used designer merchandise. Others sell handmade goods on online marketplaces or drive for a rideshare company. The 1099-K change means these casual online sellers, gig workers, freelancers and small business owners whose online transactions met the new reporting threshold for the first time in 2024 could have a more complex tax filing experience.
Recent data from H&R Block’s Outlook on American Life report found that GenZ is the generation most likely to rely on multiple income streams from a patchwork of revenue-generating activities, and most often online. These individuals must now account for and report their income more diligently to ensure compliance with the IRS regulations.
Many people are surprised that as gig workers they actually own a small business in the eyes of the Internal Revenue Service. And small businesses have extra tax rules—and potentially more IRS audits and notices—making filing taxes complicated. Whether gig revenue is the primary source of income or a side hustle, these individuals have more requirements and responsibilities that may lead them to interact more with the IRS and state revenue offices.
“Although these changes could result in more paperwork at tax time, the bigger concern is about accuracy,” said Carl Breedlove, a leading expert at H&R Block’s The Tax Institute. “Block Advisors and H&R Block small business certified tax pros have the expertise to help cut through the confusion, ensure you file accurately, and get you every possible deduction so you can keep more of your hard-earned money.”
While these new tax requirements may seem daunting, taxpayers filing as self-employed or small business owners also have more opportunities to offset their tax burden. Tax deductions, such as expenses you incur during your gig or side hustle, can help lower your income and overall tax bill. Self-employed and gig workers can often take advantage of small business tax deductions that individuals can’t.
Recommendations to Minimize Tax Liability
- Create separate business and personal profiles: Using the same account for business and personal transactions, such as splitting rent or sending gifts, may make distinguishing business income and expenses difficult.
- Maintain detailed records: Keep thorough records of all transactions, including the amount received, the date, and the nature of the transaction. This includes sales receipts, invoices, and any relevant correspondence.
- Track expenses: Document any expenses related to your side hustle or casual selling activities. This includes costs for materials, shipping, advertising, and any platform fees, as these can often be deducted from your income when filing your taxes.
- Consider professional assistance: If managing these new requirements feels overwhelming, consider seeking help from a tax professional. They can provide personalized advice and ensure you meet all IRS requirements accurately.
- Utilize tax preparation software: For DIYers, utilize reliable tax preparation software that can help you track income and expenses, generate necessary forms, and ensure compliance with the new 1099K requirements.
- Plan for taxes: Set aside a portion of your income to cover potential tax liabilities. This proactive approach can prevent unexpected financial burdens when it comes time to file your tax return.
Individuals who receive a 1099-K for the first time this year should keep in mind that they may be able to deduct against their reported business income in several ways. Home office expenses, business meals and travel, advertising expenses, retirement contributions, and even the cost of tax prep can often be deducted. Furthermore, if their business activities continue to expand, they may want to consider forming an LLC and filing taxes as an S Corp. This tax strategy often saves small business owners hundreds or even thousands at tax time.
While tallying up potential business deductions, individuals should consider that reporting a loss for multiple years can also threaten their new self-employed business owner status. Walking the line between hobby and business can be tricky, but a primary indicator is seeking to make a profit. If your expenses outweigh your revenue, the IRS may eventually wonder if your activity is more of a hobby.
Entering the world of self-employment brings a new level of complexity to taxes. The Block Advisors Resource Center has articles to help navigate the ins and outs of 1099-Ks and self-employed tax deductions. For professional help, Block Advisors’ small business certified tax pros provide support tailored to unique situations. To learn more, visit www.blockadvisors.com.
Editor’s Note:
For additional assets, please visit the 1099-K Media Kit at https://www.hrblock.com/tax-center/media-kit/1099-k/
About H&R Block
H&R Block, Inc. (NYSE: HRB) provides help and inspires confidence in its clients and communities everywhere through global tax preparation services, financial products, and small-business solutions. The company blends digital innovation with human expertise and care as it helps people get the best outcome at tax time and also be better with money using its mobile banking app, Spruce. Through Block Advisors and Wave, the company helps small-business owners thrive with year-round bookkeeping, payroll, advisory, and payment processing solutions. For more information, visit H&R Block News.
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| Investor Relations: | Jordyn Eskijian, (816) 854-5674, jordyn.eskijian@hrblock.com |
FAQ
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