What are the US tax reporting requirements for 2022
As of January 1, 2022, marketplaces like SidelineSwap are required to report a seller’s sales if they sell $600 or more on the platform in a calendar year. This new reporting requirement means that if you hit the $600 sales threshold, SidelineSwap is required to collect tax identification information and issue you a Form 1099-K. The 1099-K reports the gross amount of all completed and canceled transactions. The 1099-K is a purely informational form that summarizes the sales activity of a Seller's account and is designed to assist a Seller in reporting their taxes.
What happens when you hit the tax reporting threshold
If you hit $600 in sales on SidelineSwap, we’ll reach out to collect your tax identification information. This information will help us issue you a Form 1099-K, help you file your taxes, and ensure your payouts are not impacted. Once you’ve provided your tax information, no additional action is needed from you.
When did these new tax laws go into effect?
As of January 1, 2022, marketplaces like SidelineSwap are required to report a seller’s sales if they sell $600 or more on the platform in a calendar year. Previously, a 1099-K was only required when a seller hit their state’s threshold or the federal threshold of $20,000 in sales and 200 or more transactions in a calendar year.
Why am I required to provide my tax information to SidelineSwap?
This is a requirement by US law, introduced in the American Rescue Plan Act of 2021. As of January 1, 2022, marketplaces like SidelineSwap are required to collect tax identification info from sellers who gross $600 in sales in a calendar year. This information will help us ensure the timely and accurate issuing of a Form 1099-K and help you file your taxes.
What information is required?
You will need to provide SidelineSwap with your tax and certain personal information in order for SidelineSwap to file a complete and accurate 1099-K tax information return, should you meet the filing requirements. SidelineSwap will verify this tax identification information with third party verification providers and applicable federal and state taxing authorities. During this process SidelineSwap may request additional information.
This tax and personal information includes the following:
- Legal First and Last name
- Social Security Number (SSN) or Individual Tax Identification Number (ITIN)
- Mailing Address
- Tax Classification (Reporting status for income tax purposes i.e. individual v. business)
For certain tax classified business entities, such information may also include:
- Legal Name of Entity (if different from individual)
- Employer Identification Number (EIN)
- Registered Business Name/Disregarded Entity Name/Doing Business As (DBA), if any
- Registered address of entity