- Ticket prices for games in Miami have risen from $30 to $255 each since July
- Generally, the IRS has a threshold of $20,000 before requiring you to complete a 1099-K form
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A new law in the US could mean that fans who have fallen into the habit of making a quick buck by reselling hundreds of dollars worth of tickets to Inter Miami matches or the Eras Tour will be taxed by the IRS in 2024.
A new law included in Democrats’ coronavirus relief package in the American Rescue Plan Act of early 2021 will require ticket exchange and resale companies, such as StubHub and Ticketmaster, to provide information to the IRS on individuals who have more than $600 worth of tickets sold this year, according to The Wall Street Journal.
The Biden administration is aware of the extraordinary fiscal year that live events have just taken place, given the commonality that Swifties, MLS fans, and Beyoncé stans have: paying a high price, which could easily reach four to five figures , to see two of the world’s best-selling artists and a World Cup champion perform live.
Notably, ticket prices for Inter Miami matches have risen from $30 to $255 each (an increase of 11.76) since Messi joined the Herons in July.
StubHub said its platform has seen an “unusually high number of fan ticket resellers” this year, accounting for 70 percent of U.S. “Eras Tour” ticket orders — double what the company normally stores — The Journal reported. The same is not so different when it comes to selling tickets to see Messi play.
THANK YOU, LEO: The IRS Will Tax Individuals Who Sold More Than $$600 in Tickets This Year
StubHub said ticket resale will account for 70 percent of U.S. ‘Eras Tour’ ticket orders this year
Both Florida resident Jon Steele and his wife are season ticket holders for Orlando City SC of the MLS, but have recently found themselves reselling their tickets for midweek matches due to their busy work schedules. Steele told the Journal he tends to get back 60 to 100 percent of the cost of each ticket, usually about $35, but that also depends on the club’s opponent.
For the Lions’ next game against Inter Miami on Sunday, he sold a pair of tickets for $1,100, according to the Journal. Steele has already managed to pay for next year’s season tickets, all thanks to that amount and other profits made from midweek games in the past.
Football fans admit they were eager to see Messi play, but “paying the cost of an entire season’s worth of tickets was too good to pass up,” he told the Journal. “Have you seen how much groceries cost these days?”
Steele added that he has no problem with “giving Uncle Sam his fair share,” but that will most likely mean he will have to fill out a 1099-K form, which previously was only completed by users who made more than $20,000 had received in income. revenue and more than 200 ticket resale transactions.
The IRS’s new reporting law will be triggered by the sale price, not the seller’s profit, according to The Journal, which claims the change “is intended to make it more difficult to prevent income from such sales from being reported.” ‘
The new law was expected to go into effect for the 2022 tax year, but the IRS halted its implementation until next year. Plans to grant additional extensions have yet to be announced by IRS Commissioner Danny Werfel.
IRS Commissioner Danny Werfel has not yet announced any plans to grant additional extensions
The House Ways and Means Committee — led by a Republican majority — approved a bill earlier this year that would reset the 1099-K threshold to $20,000, according to The Journal.
But that’s just part of a broader initiative that hasn’t gained much momentum in the House of Representatives, and whether it will have any results at all remains uncertain. A bipartisan bill introduced in the Senate would adjust the threshold to $10,000 and 50 transactions, The Journal reported.
Transactions would be considered short-term gains that would most likely be taxed at the ordinary federal income tax rate, typically between 10 percent and 37 percent if a fan sold a ticket within a year of purchase. State income taxes also apply.
There’s a lot of money at stake, the Journal reported, because a Republican bill “would reduce federal revenues by $9.7 billion over 10 years,” according to Congress’ Joint Committee on Taxation.
The deadline for businesses to send out 1099-K forms is Jan. 31, and the IRS estimates it will receive 44 million in 2024, up from 11.1 million in 2021.