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 now handle Form 1099-K production & filing directly via Trolley + our ID verification tool is making your KYC process as easy as a few live photos. 3, 2, 1…say “Cheese!” 🧀📸
We are back this month with a whole heap of updates that are totally worth the read.
While the addition of IRS Form 1099-K to our Tax product is the highlight of this newsletter, we have also expanded from a 3-product to a 4-product platform with the addition of Trust, our risk management solution that helps to ensure your payouts are low-risk and KYC compliant.
We’ll start with the big updates, and then some of the other things we’ve done over the last few months that may not have hit your radar yet. 👀
What we cover
Support for IRS Form 1099-K
When the reporting threshold for IRS Form 1099-K is reduced to $600, most US-based marketplaces that haven’t needed to file 1099-Ks will have significantly increased demands.
These new-to-you forms have been added to our existing IRS Tax product, allowing you to:
- Collect Forms W-8 & W-9 electronically
- Map all relevant payments to 1099-K categories
- Review recipient earnings at the end of the year
- Send PDFs of Form 1099-K to recipients electronically or via postal mail
- E-file Forms 1099-K directly with the IRS through the Trolley Dashboard
Read our detailed blog post to learn more.
If you’re already subscribed to Trolley Tax, you can simply enable Form 1099-K support from the product settings.
If you’re not subscribed to Trolley Tax, you can subscribe from Settings or set up a call with us where we can walk you through setup.
Built-in identity verification tools
Introducing Trolley IDV, our latest tool that uses live, multi-step ID verification technology to validate the identity of your users, offering you the data and validation you need to fully trust new signups and move forward with your growth.
Trolley IDV includes:
- Identity & document verification: Collect and validate IDs versus 11,000 official government ID templates from over 200 countries.
- Live photo validation: Use the power of image recognition to ensure the uploaded ID is from the actual person submitting it.
- Proof of address and age comparisons: Verify details provided during onboarding, such as address and DOB, with the ID document.
- Monitoring dashboards: Manage the KYC and IDV process from a single screen where you are alerted to actions you may need to take.
Easy migration toolkit
We know migrations are a pain, that’s why we added new, low-friction ways to import recipient and payout history into Trolley.
Everything from recipient data to validated bank information, W-8/W-9s, and KYC details can be imported from other systems into Trolley via CSV or our powerful API.
- Import W-8/W-9 information
- Validate recipient data
- Import payment data
- Import KYC or identity verification data (coming soon)
Improved TIN collection and FTIN validation
For IRS Tax
- Validation of FTINs provided on Form W-8 has been enhanced through allowing the specification of a document type which should allow for more accurate validation of that specific type of FTIN.
- TIN Validation has now been added to the DAC7 onboarding process and merchants will see TIN validation errors on their dashboard, allowing them to work directly with recipients to rectify issues ASAP.
We also have some additional updates that will add value and enhances your existing processes! 🌟
- Increased flexibility on tax records for returned payments: As per IRS guidelines, we’ve added a new setting to keep the Payment Tax Record when its associated payment is returned. You can go to your Tax settings in the Trolley Dashboard to enable this feature.
Important: If you decide not to reverse the Payment Tax Record, and if you re-send the payment via Trolley, remember to mark the re-sent payment as “Tax Exempt” so that you don’t double-record the income.
Note: This is not tax advice, please consult your CPA for best practices.
- Send via local routes to BO, PY, & UY from CA & the UK: Canadian- and UK-based merchants can now send to Bolivia, Paraguay, and Uruguay, using local routes and the respective local currencies.
All countries will have two options for providing bank details, which will be validated via two different mechanisms.
- Advanced fee splitting controls: Now, you can customize the fee split per payment method and route depending on your business goals.
Previously, you could only select how much you would cover for the recipient, irrespective of how much the payment cost or which payment method they uses.
- WCAG 2.1 standards coming in December 2023: We have been making updates to the widget and portal to offer your recipients a cleaner and more accessible experience on-par with the WCAG 2.1 (Web Content Accessibility Guidelines) standards.
Non-UI changes have been made and deployed as a first phase. We will continue to make changes throughout the rest of 2023. We will be rolling out an improved layout of the widget and portal with small UI updates in December 2023.
Recipients will have the option to opt in to using the new layout if they choose. The recipient experience will continue to default to the current layout for the time being. We will send further communications before we switch over completely to the new UI.
Interested in Trolley? Book a demo.
Trolley is a full-featured payout and contractor tax solution that can automate your workflows. If you have questions about how we can help you streamline and enhance your existing processes, reach out to Trolley’s sales team or your customer success manager to learn more.