News & Updates

IRS provides transition relief for third-party settlement organizations; Form 1099-K threshold is $5,000 for calendar year 2024

Under the guidance issued today, TPSOs will be required to report transactions when the amount of total payments for those transactions is more than $5,000 in 2024; more than $2,500 in 2025; and more than $600 in calendar year 2026 and after.

Notice 2024-85 also announces for calendar year 2024, that the IRS will not assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax during the calendar year.

TPSOs that have performed backup withholding for a payee during calendar year 2024 must file a Form 945 and a Form 1099-K with the IRS and furnish a copy to the payee.

For calendar year 2025 and after, the IRS will assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax.

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Important Updates

IRS: Act now to file, pay or request an extension

With the April 15 tax deadline fast approaching, Internal Revenue Service reminds taxpayers there is still time to file their federal income tax return electronically and request direct deposit of any refund. Filing electronically reduces tax return errors as tax software does the calculations, flags common errors and prompts taxpayers for missing information. Most taxpayers qualify for electronic filing at no cost and, when they choose direct deposit, usually receive their refund within 21 days.

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