If you earned some extra cash recently by reselling tickets at unthinkable prices, get ready to (potentially) get hit with taxes as the IRS is now cracking down on ticket resellers.
As part of the American Rescue Plan Act, a new law will require ticketing platforms, such as Ticketmaster and StubHub, to hand over information on anyone who made more than $600 reselling tickets this year to the IRS.
This new law lowers the tax reporting threshold for users of e-commerce platforms, which previously only applied to those who received $20,000 in revenue and had more than 200 transactions.
The news comes shortly after Beyoncé’s Renaissance tour and Taylor Swift’s Eras tour saw average resale ticket prices reaching heights of $900 and $1,095 respectively, either breaking the bank for fans or unfortunately leaving them ticketless.
Regardless of whether or not they made a profit, sellers who have made $600 or more over the course of a year will be sent a 1099-K form to complete, though they’ll only be charged additional taxes if they earned a profit by selling tickets at higher amounts than they paid themselves.
Information regarding the 1099-K form on the IRS’ website states:
Payment apps and online marketplaces are required to file a Form 1099-K if the gross payments to you for goods and services are over $600. The $600 reporting threshold started with tax year 2023. There are no changes to what counts as income or how tax is calculated.
The change stems from a provision in legislation serving as a revenue-generating measure which meant to make it harder to avoid reporting income from such sales. It was originally supposed to take effect in the 2022 tax year, though it was delayed by the Biden administration.
Not everyone supports the rule change, however, such as congress lawmakers.
The House Ways and Means Committee approved a bill earlier this year–the Small Business Jobs Act–that would restore the old 1099-K threshold, though Congress still has a say on the matter.
Additionally, the Red Tape Reduction Act, a bipartisan proposal, was introduced in the Senate which would set the 1099-K threshold at $10,000 in revenue and 50 transactions.
It’s not known whether or not any of these changes will be made before the 2023 tax filing season.