As of September 11 2025, the rule about small transactions through Paypal, Zelle, Venmo for less than $800 has been changed. The new threshold is set back to $20,000 and there is a new limit of 200 transactions before a 1099-K will be issued.
I assume the $20,000 limit applies to the total value of items sold per year, not the value of one transaction.
It seems that most people will not to worry about getting a 1099-K from Paypal because they sold a camera item for $1,000 with the transaction fee included. If we plan to sell a lot of gear during the year, then that is another consideration.
Did they ever enforce $800 (or was it $600)? I don't think they did. Last year I was sent 1099k because I crossed the 2024 threshold of $5k, before that it was 20k and they were planning $600 for year 2026 but that has been called off as part of BBB.
I got enforced on one year if you want to call it that. IRS auto adjusted my return because I (and they) received a 1099-k that I didnt add to my return.... and they sent me a bill for like 32 dollars and threatened to seize my home and all my belongings if I didnt pay or make arrangements within 30 days. Standard IRS stuff.
Right, notice that The IRS spells Theirs. I got a 1099K last year because I sold a lens in 2023 for $1700. But I paid more than that a few years before and submitted a form showing that I did not profit from the sale. I didn't hear anything back about it, but it's only been a year.
Kent_Photo wrote:
Right, notice that The IRS spells Theirs. I got a 1099K last year because I sold a lens in 2023 for $1700. But I paid more than that a few years before and submitted a form showing that I did not profit from the sale. I didn't hear anything back about it, but it's only been a year.
You may not have profited from the sale. But the IRS wants to.
Hi Kent, based on my experience, a resolution with the IRS might take a while, especially since this administration made deep cuts to the IRS. The IRS misinterpreted a 2021 1099-B & charged me $25K plus over $3K in interest for "late payment." I paid it while waiting for them to resolve it. That didn't happen until early this year. It took over 2 years! I got my $28K back plus another $3K in interest, but I figure they actually cost me about $100K because of what I could have made investing it.
I read an article last year about the Paypal threshold and it included information on the exemption, but now I see that the exemption applies to tariffs on goods shipped into the US.
According to the Paypal help site, for 2024 tax year the Federal Reporting Threshold is more than $5,000 USD in gross sales from goods or services in the calendar year. 2025 threshold goes down to $2,500 and 2026 goes to $600. These limits may change as we go along.
