11/22/2023 update: The IRS has announced another delay of its Form 1099-K threshold changes. For calendar year 2023, with reporting due in January 2024, the reporting threshold for TPSOs remains at $20,000 in gross amount of aggregate payments and 200 transactions.
The IRS plans to propose a $5,000 reporting threshold for the following year, with the aim of eventually working towards the $600 threshold. This change does not affect state reporting thresholds—many of which are already $600.
We’ve compiled what you need to know going into this upcoming tax season: answers to frequently asked tax and compliance questions. Based on this year’s biggest trends in contractor tax compliance, we’ve aptly titled it “2023 Tax Need-to-Knows: Trends and FAQs”.
Tax season is just around the corner, and we know how confusing and chaotic this time of year can be. In fact, we have conversations about contractor taxes with executives and product/finance leaders from many industries—including artist royalties, creators, and the gig economy—all the time.
Wouldn’t it be great if someone were to collate all the most pressing and frequent tax compliance questions we receive and just answer them in one handy guide for the 2023 tax season?
Yeah, we built that guide. 👀
Why we built the need-to-knows guide
In 2023 alone, 49% of all calls we fielded touched on a tax topic.
And even knowledgeable finance professionals aren’t immune from confusion around the changing complexities of compliance. Over 43% of CFOs and CROs brought up tax compliance concerns, chiefly questions surrounding W-9s and W-8 BENs, 1099s, 1042s, TIN matching and validation, and the new kids on the block, 1099-Ks and the EU’s DAC7.
Because a well-answered question can be powerful to the next person asking it, we decided to compile all of those Qs & As in an easy-to-read guide, to help make understanding the latest in tax compliance and filing a little bit easier. Enter 2023 Tax Need-to-Knows: Trends & FAQs.
What we built
This guide is the product of nearly countless conversations, years of experience in the industry, and some deep analysis into product use data. We wanted to highlight the questions we’re hearing from business leaders and finance professionals—the challenges they face related to paying creators, freelancers, and contractors this tax season.
Grounded in data obtained from calls which we confirmed with product data, this guide is super relevant. It’s exactly the kind of knowledge we want to share with business leaders, finance professionals, and anyone who has a hand in their business’ tax compliance efforts.
The end result? Answers to over 30 of the most frequently asked tax questions we hear every day.
The value for you
On top of providing info & guidance on both US and EU tax topics (ranging from W-9s and W-8 BENs to 1099s to DAC7 and more), we found some interesting trends that we think you should be aware of and we provide what you need to take away from them, including:
- The challenges that manual form collection and filing pose for scaling businesses
- The rise of domestic payouts within the US as the internet economy expands, and the increasing importance of W-9 collection and management
- The coming threshold change for 1099-Ks to $600 and what this means for digital marketplaces
- The impact of the OECD model rules for digital platforms beyond the EU’s DAC7
Plus, we discuss how an automation solution like Trolley can help ease the burden of tax season by ensuring compliance year-round and allowing you to e-file in mere minutes.
Get the 2023 Tax Need-to-Knows: Trends & FAQs today and save yourself some headaches this tax season.
Looking for an automation solution to make this tax season a breeze? Take our self-serve tax tour to see how Trolley can work for you.
And, as always, we’re here to talk through any questions or concerns.