The IRS is warning taxpayers who like to file their tax returns in late January or early February to wait until later in 2023, and here’s why.
In a recent release, the IRS strongly advised against filing tax returns early to look out for a 1099-K form, which will track third-party payment systems like PayPal and Venmo, according to CNBC.
“Now a single transaction exceeding $600 can require the third party platform to issue a 1099-K,” the release said. “Money received through third party payment networks from friends and relatives as personal gifts or reimbursements for personal expenses is not taxable.”
The deadline for companies to send the 1099-K form is Jan. 31, 2023. Hence, experts like Albert Campo, a certified public accountant, recommend taxpayers file in late February or early March 2023, the news outlet reported.
The timeframe allows any misdirection or slowness with mail to be corrected before taxpayers file. Also, if someone moved then it’s possible the 1099-K was sent to the old (and wrong) address.
“A little extra caution could save people additional time and effort related to filing an amended tax return,” the agency said in a release. “And if they have untaxed income on a Form 1099 that isn’t reflected on the tax return they initially file, that could mean they need to submit a tax payment with an amended tax return.”
Published by Deron Dalton with Penn Live – 12/15/2022 at 5:59pm