$600 Threshold 1099 Reporting Coming Back

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  1. Hearts and Lattes profile image88
    Hearts and Lattesposted 2 years ago

    The Relief Bill signed by the President includes a requirement for online companies to once again provide 1099 form reporting for earners making $600 or more per year, starting in 2022.

    Don't know if anyone had heard of this news. And don't know how HP/Maven will work this back into their routine after years of it being the duty of PayPal.

    1. bravewarrior profile image89
      bravewarriorposted 2 years agoin reply to this

      I don't think that threshold ever went away. $600 has always been the minimum for independent contractors, which is what we are. You should always be prepared to claim the income if you receive $600+ from any one entity and don't have taxes taken out. PayPal doesn't pay us; they simply pass the earnings issued by Maven to the agreed upon account(s), in this case, PayPal.

      1. Hearts and Lattes profile image88
        Hearts and Lattesposted 2 years agoin reply to this

        The reporting threshold for self-employed people to report earnings to the IRS is $400, whether it is from one entity or many. HP doesn't currently have a $600 threshold for giving out 1099s anymore. I think the last time they did was over 10 years ago.

        If you reach a $20,000 total payout and over 200 transactions, then PayPal sends out a different type of 1099 form.

      2. behopefull profile image29
        behopefullposted 2 years agoin reply to this

        Hello how are u tell me about some useful tips about improvement of articles on Hub pages

        1. OldRoses profile image96
          OldRosesposted 2 years agoin reply to this

          Judging from your post, I would recommend improving your English language skills.  Your English is not good enough to write on this site.  HubPages demands perfect or near perfect English from its authors.

          1. behopefull profile image29
            behopefullposted 24 months agoin reply to this

            Thanks for your advise

    2. OldRoses profile image96
      OldRosesposted 2 years agoin reply to this

      Thanks for the heads up.  Even though HP hasn't provided me with a 1099, I have reported my income from the site every year.  Guess I am too honest.

      1. Hearts and Lattes profile image88
        Hearts and Lattesposted 2 years agoin reply to this

        OldRoses, a lot of people don't realize that reporting their full income is also beneficial for them in terms of future Social Security benefits. Because you pay Social Security and Medicare taxes out of your self-employment earnings it goes towards your earnings records for SS benefits. Since so many people have a hard time saving for retirement on their own, it's at least a side benefit for old age security.

  2. bravewarrior profile image89
    bravewarriorposted 2 years ago

    I've been in the accounting field for 35+ years and anyone who is paid at least $600 by my employer receives a 1099 form at the end of the year. HP ignoring the $600 minimum is not legal. That indicates that they are not claiming all of their income, either.

    I would imagine PayPal operates a bit differently due to the many people who sell products online.

    Now that Maven has taken over HP, they are adhering to the tax laws.

    1. bravewarrior profile image89
      bravewarriorposted 2 years agoin reply to this

      Let me clarify: LLCs that are not S or C corporations, non-employees (individuals not on the payroll), partnerships receive a 1099 when they're paid $600+ within a tax year by a single entity. We are considered individuals or independent contractors by HP/Maven. Anyone who fills out a W-9 and uses their social security number, as opposed to a Federal ID Number, is subject to the 1009 rule.

      1. Hearts and Lattes profile image88
        Hearts and Lattesposted 2 years agoin reply to this

        HP did adhere to the tax laws and HP/Maven still does. The reporting requirements for 1099s changed during the Obama administration for internet companies, so that a number of online gig employers no longer legally had to produce 1099s. The onus for a 1099 in that case is on payment processors like PayPal and Amazon Payments after $20,000 in payments and over 200 transactions.

        However, this is all changing in 2022, when the reporting rules go back to a $600 threshold for 1099-NEC.

        1. bravewarrior profile image89
          bravewarriorposted 2 years agoin reply to this

          I guess the government thought they were losing too many tax dollars. Online purchases are now subject to sales tax whereas until recently, they weren't. Uncle Sam always finds a way to take a slice of our pie.

          Thanks for the clarification. I work for brick and mortars, so I wasn't aware of the online income exception.

  3. Rupert Taylor profile image96
    Rupert Taylorposted 2 years ago

    I don't suppose anybody knows how this affects Canadians. We have a tax treaty with the U.S., that allows us to declare earnings from the States and be taxed on it by our government. I've never received documentation from PayPal, but I just declare the income on my tax filings. Seems to me that should be good enough.

  4. Sherry Hewins profile image93
    Sherry Hewinsposted 2 years ago

    It will make no difference to me, except I will have documentation of that income. I always report all of my online income to the IRS.


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