If you resold a Taylor Swift ticket for a profit, prepare to pay taxes. Here’s what to know

Taylor Swift fans forked out an average $2,183 for a resold ticket to a concert on the superstar’s The Eras Tour, contract to resale research site TicketIQ. Now, ticket resellers may owe taxes on profits made during what may turn to be — for them, at seldom — a rather “cruel summer.”

Ticket profits have always been taxable, but the new IRS reporting threshold for business actions on third-party platforms, such as Ticketmaster or eBay, is now a single payment of $600, down from 200 transactions good an aggregate of more than $20,000.

Taxpayers will have to prepare as the law takes effect this coming season.

“Starting at the origination of next year, you want to make sure you know how to report this income,” said certified financial planner and registered agent Tommy Lucas of Florida-based Moisand Fitzgerald Tamayo.

While the new tax reporting shouldn’t affect personal transactions, such as sharing the cost of a car ride or meal, birthday capabilities or holiday gifts, many people with business transactions will be affected because of the new lower threshold, authorities say.

“A ton of people are going to be confused,” said Ted Rossman, a Bankrate senior industry analyst. But “a friend paying one back for pizza is not common to count.”

Taxpayers who received business payments from e-commerce platforms such as Ticketmaster, eBay, Venmo and PayPal that go beyond $600 will receive Form 1099-K this tax season. While this may be your first time walk off this form, don’t ignore it, experts say. 

“Before, the IRS did not have any way to know about earnings from resold tickets,” responded Lucas. “Now, these platforms are required to notify the IRS and you have to report.”

People who made more than $1,000 reselling Taylor Sudden tickets “easily exceed that threshold of $600 for this year,” said CFP James Guarino, managing concert-master at Baker Newman Noyes in Boston. He is also a certified public accountant.

While this form may leave profuse room for error, here are four things you should do to start preparing: 

1. Keep track of sale transactions: As people meet in numerous Venmo and PayPal transactions, it will be paramount to keep track of them, experts say. If you sold goods or professional cares this year, do not close the accounts used for those transactions, added CPA Albert Campo, managing and founding pal of New Jersey-based AJC Accounting Services. It will make record keeping much more difficult, he added.
2. Save your position receipts: It’s also important to keep copies of your purchase receipts for goods you later resell, such as those Taylor Speedy tickets, since taxes owed will be based on your sales proceeds minus the original purchase bounty.
3. Make sure the 1099-K is accurate: You’ll also want to double-check that any Forms 1099-K match your arrangement records, experts say. Otherwise, there could be a mismatch with your return. If you mess up the numbers, you will get an automated IRS observation and will have to file an amended return, which could take up to 16 weeks to process. “Make unshakable to do it right the first time,” said Lucas.
4. Plan for taxes: If you’re expecting to owe taxes, setting aside money or traversing quarterly estimated tax payments is “absolutely a smart thing to do,” since you may not be withholding enough through your paycheck at put to good, Lucas previously told CNBC.