ArticleIt has been a banner year for ticket sales (especially Taylor Swift ticket sales), both through ticket websites and resale sites. But, while some ticket resellers may have earned significant profits in 2023, they will have to report that income to the IRS. Ticket resellers who made a profit of more than $600 will have to pay taxes on their earnings — “Karma” is the Form 1099-K.
Form 1099-K is a report of payments a taxpayer received during the year from credit, debit, or stored value cards or payment apps or online marketplaces (third-party payment networks). Beginning in 2023, third-party payment networks that generate Forms 1099-K for taxpayers are required to report third-party transactions paid in 2023 with any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the number of transactions. This includes payments for personal items, goods, or services sold through any: peer-to-peer payment platform (such as Venmo), online marketplace, craft marketplace, ticket exchange (such as Ticketmaster) or resale site (such as StubHub), among others. This change, which lowered the threshold for taxpayers to receive a 1099-K from $20,000 to $600, was enacted through the American Rescue Plan of 2021 and was set to go into effect for the 2022 calendar year. However, in December 2022, the IRS announced that 2022 would be a transition period for implementation of the lower threshold. Please note, gifts or reimbursements of personal expenses from friends and family (reimbursing your friend for dinner via Venmo, for example) should not be reported on form 1099-K, they are not considered payments for goods or services.
Fans who received gross revenue of at least $600 on any of Ticketmaster’s U.S. marketplaces in 2023 will receive a copy of the Form 1099-K that Ticketmaster is also required to file with the IRS. The amount on the form will include the gross amount of all reportable transactions the fan made during the calendar year, including the price of the tickets resold, fees, and other amounts related to ticket sales. Any fan with sales totaling more than $600 in 2023 should expect to receive a Form 1099-K in early 2024.
Thank you, Colleen Spain, for this week’s Tax Tracker