Proposed Amendment to Raise Tax Reporting Threshold From $600 to $10,000

Americans are fed up with the new reporting change for third-party payments such as Venmo and PayPal.

However, a proposed amendment by Sen. Bill Hagerty, R-Tenn. and Sen. Joe Manchin, D-W.Va. would raise the reporting threshold for third-party payments for the 2022 tax season.

The proposed amendment would apply to the $1.7 trillion spending package.

In an interview with CNBC, Manchin said the amendment would increase the payment threshold from $600 to $10,000.

Sens. Bill Hagerty and Joe Manchin will propose to raise the tax reporting threshold to $10,000 from $600 for 2022. https://t.co/P3uuFNNY3x

— CNBC (@CNBC) December 21, 2022

Senators Bill Hagerty and Joe Manchin will propose to raise the tax reporting threshold to $10,000 from $600 for Venmo, Paypal, per CNBC.

— unusual_whales (@unusual_whales) December 21, 2022

CNBC reported:

Before 2022, taxpayers received 1099-Ks with more than 200 transactions worth an aggregate above $20,000. But the American Rescue Plan Act of 2021 dropped the threshold to just $600. Currently, even a single transaction of more than $600 may trigger the form.

“This is the best relief we can get for people,” said Manchin, referencing the $10,000 threshold as “the best way to approach it.”

He believes that raising the threshold to $10,000 has broader support than delaying implementation of the new rule.

Tax professionals previously warned the low reporting threshold could trigger 1099-Ks for personal transfers, including gifts and reimbursements.

“As tax preparers, we are more or less expecting the worst,” Albert Campo, a certified public accountant and president of AJC Accounting Services in Manalapan, New Jersey, recently told CNBC.

“We’re expecting most of our clients to get these things,” he said. “So we’re trying to be proactive in addressing it.”

The $600 reporting threshold in the American Rescue Plan Act does the opposite of rescuing anyone.

The low threshold is another attack against hard-working Americans trying to survive in Biden’s flailing economy.

In a letter sent to the Senate Finance Committee and the House Ways and Means Committee, the American Institute of CPAs shared “deep concerns” about the $600 reporting threshold.

AICPA said even a $5,000 threshold would be “significant progress.”

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Honestly, Americans should demand more than a $10,000 reporting threshold.

Because taxation is theft and any reporting threshold to have income withheld is an attack against the free men and women of this country.