Tax Guide

New IRS Law to Report Income for 2023

You may receive a Form 1099-K from GlassPass, depending on the totals of your sales and transactions. This document is to help you comply with your tax obligations.

Form 1099-K is an IRS form for taxpayers to report applicable payment transactions received within a calendar year. Online marketplaces like GlassPass are required to issue a 1099-K to sellers in the USA who've received income from online sales over the minimum threshold set by the IRS. We'll provide you with the Form 1099-K by January 31 each year if you've received payments above the minimum IRS reporting thresholds in the previous calendar year.

The IRS massively lowered the threshold from $20,000 in sales AND 200 transactions to just $600 in 1 calendar year. The law was supposed to begin in 2022, but due to pushback from companies and their customers, the IRS delayed the law until 2023. Now, every 3rd party payment service (including Venmo, Cashapp, PayPal, etc) are required to report payments sent to individuals totalling over $600 in one calendar year.

We strongly believe income of $600 is far too low to be reported and will continue to do our best to get it raised.

202120222023
Sales totaling over $20,000    Transition Year to New Law    Sales totaling over $600
Over 200 transactionsTransition Year to New LawAny number of transactions

The Form 1099-K will show payments received since GlassPass started managing your payments, and includes the gross amount and number of payment transactions, your name, address, and 9-digit Tax ID. This information will also be reported to the IRS and the correct state tax authority, where applicable.

How & When to Verify your Tax ID

When you reach the threshold of $600 in payouts, you will automatically be prompted to provide your Tax ID to receive your next payout. You only need to provide your Tax ID if you’ve received over $600 from GlassPass in the 2023 calendar year. At the end of the year, GlassPass will verify your Tax ID. If your details can't be verified, you'll need to provide a Form W-9. If this is the case, we'll let you know what you need to do.

TIP: When filing your tax return with the IRS, please ensure that your first and last name saved to your GlassPass account is the same name associated with your Tax ID. If you’re a business, please enter the legal business name.

Form 1099-K and multiple GlassPass accounts

As of March 2023, only one phone number & identity can be connected to a GlassPass account. In the future, if you have multiple GlassPass accounts associated with the same Tax ID, your thresholds are calculated by combining all payment transactions. If your combined sales exceed the above thresholds, you'll receive a Form 1099-K for each account, even if one or more of the individual accounts do not exceed the IRS reporting thresholds.

For example, you may have two GlassPass seller accounts associated with the same Tax ID. If you have any sales transactions combined between the two accounts, and received $599 in payments on one account and $5 on the other, you'll receive a separate Form 1099-K for each account.

What's included in Form 1099-K?

As Form 1099-K is an IRS information return, it includes the gross amount of all reportable payment transactions within a calendar year, based on when funds settle to GlassPass, not necessarily when funds are received by sellers. This amount does not include any adjustments (for example: credits, discounts, fees, refunds, or any other adjustable amounts). This means that the gross amount on your Form 1099-K may not be the final reportable amount on your tax return. You should consult your tax advisor to determine how best to use the information on your Form 1099-K when filing your personal and/or business income tax return.

If there's an issue with any transaction on your Form 1099-K, you can contact us with the transaction number and any relevant information about the transaction. Additionally, Form 1099-K does not include the sales tax when it is automatically collected and remitted by GlassPass.

1099-K detailed report

To help reconcile the transactions included on your Form 1099-K, you can request a 1099-K detailed report that provides a detailed breakdown of all unadjusted gross payment transactions on your 1099-K form.

To request your 1099-K detailed report from GlassPass, email us at support@glasspass.co. In the near future, we’ll have a system in place that allows you to see all of your historical transaction data and a detailed 1099-K report.

Once your report is ready, we’ll notify you by email. If you have specific questions about reconciling the amounts on your Form 1099-K, we recommend you speak with a tax professional.

Summary

The IRS has massively lowered the threshold to receive and report a Form 1099-K. Starting 2023, IRS regulations require all businesses that process payments, including online marketplaces like GlassPass, to issue a Form 1099-K to sellers who receive $600 or more in gross payouts. If you receive $600 or more in gross payouts over the course of the 2023 calendar year, we'll provide a Form 1099-K to you by January 31, 2024. Your 2022 tax obligations aren't affected by this change.

If you haven't already given us your Social Security Number (SSN), Employer Identification Number (EIN), or Individual Tax Identification Number (ITIN), we'll ask you to provide it once you reach $600 in sales. This information is required for all sellers with sales over the threshold amount ($600 for 2023). If you don't provide us with an SSN, EIN, or ITIN, your payouts will be put on hold, and we may deduct backup withholding from future payouts.

To be clear: we aren’t happy with this new change. We believe $600 is a ridiculously low threshold to require a 1099-K. At GlassPass, we'd like to help our sellers have their voices heard about these threshold changes. Please send us emails voicing your frustration with this tax law change, and we will work to send those letters to the correct politicians.

Additionally, we're working to join a coalition lobbying Congress on your behalf to raise the $600 threshold. Help us stop overtaxation and the avoidable disclosure of private information by emailing us or sending a letter to your local representative. We’re hoping that the government will realize the large burden put on its citizens with this new law, and they’ll raise the limit by the end of 2023; but we can’t know for sure.

For more information, email any questions to support@glasspass.co.