![]() This form was created in 2012 for the 2011 tax year to ensure that individuals and businesses report all of their income for tax purposes. IRS Form 1099-K came into existence as part of the 2008 Housing and Economic Recovery Act-even though it has nothing to do with housing. If your business is organized as a pass-through entity like a multi-member LLC, LLC electing to be treated as a corporation, S Corp or Partnership, you’ll need to report this information on your Form 1120, 1120S or 1065. If you’re self-employed or work as an independent contractor, you typically report your income, including that from forms 1099-K, on Schedule C of your Form 1040, individual income tax return. There is no threshold for payment card transactions. If you don’t receive a 1099-K, the IRS still expects you will report all your income, regardless of the amount. However, the IRS recently delayed the implementation of the new $600 reporting threshold for goods and service transactions from third party processors like Venmo and Paypal, reverting tax year 2023 back to the previously higher 1099-K reporting threshold (over $20,000 in payments and more than 200 transactions). The IRS planned to implement changes to the 1099-K reporting requirement for the 2023 tax year. Online auction payment facilitators and marketplaces that connect independent sellers with customers, such as eBay and Etsy, or gig-worker platforms like Uber and Lyft also generally act as third-party settlement organizations.įorm 1099-K, Payment Card and Third-Party Network Transactions is an IRS form used to report credit/debit card transactions and third-party network payments.These organizations also include services like PayPal, Venmo, and CashApp, that settle payment card transactions.Third-party network settlement organizations generally include banks or other organizations that process credit card transactions for a merchant.Form 1099-K includes the annual gross amount of all reportable payment transactions made through a payment card or third-party payment network.
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