IRS postpones tax crackdown on gig workers
The Future. Merry Christmas, contractors. The IRS announced that they’re delaying the implementation of a new law requiring e-commerce websites to share the tax information of all users who make over $600 in transactions made on those platforms. Now, this law won’t take effect until the 2023 filing season– if legislators don’t get rid of it before then.
From Scrooge to Santa
E-commerce platforms won’t have to send sellers and the IRS a boatload of 1099-K forms this year.
- Until recently, e-commerce platforms like eBay, Etsy, and Airbnb only had to give the IRS tax information on users (aka gig workers) who made over $20k annually on 200+ transactions.
- Then, in March 2021, Congress drastically lowered that threshold to include anyone who made more than $600 off one of these sites – which would tax a lot of previously unreported income.
- Gig workers still have to report the same income that they would have if this law weren’t delayed. It’s just that the IRS has access to less information with which to cross-check taxpayers’ reported income.
Wait it out
Since the new threshold passed Congress, bipartisan legislators have argued over whether to change or abolish it. The IRS stepped in after discussion among lawmakers ground to a halt.
This delay could just be a delay. But it’s also possible that lawmakers will decide to raise the limit or nix it entirely now that they have a whole extra year to think about it… but only if you’re really good this year.