WILL I RECEIVE A 1099-K?
A form 1099-K is used by the IRS to track how much money you have received through third party payment networks in a given tax year.
Will I receive a 1099-K?
A form 1099-K is used by the IRS to track how much money you have received through third party payment networks in a given tax year. Prior to 2023, the reporting requirement was only triggered when the total payments exceeded $20,000 and 200 transactions. The new $600 threshold means millions of 1099-K forms will be issued.
You should not receive a 1099-K for gifts or reimbursements from friends and family.
What do I do with Form 1099-K?
Review the 1099-K carefully to make sure it is correct. Should you have even received the form from the third-party payment network, and if so, is the amount accurate? Contact your local Liberty Tax expert to ensure your tax bill doesn’t skyrocket due to payments that are not taxable.
Will I owe more tax?
Receiving a 1099-K does not always mean your income, and therefore tax bill, will hike up. If you sold personal goods there was a loss or a gain. If you sold goods at a loss in the course of your business, then you may actually reduce your tax bill. Again, the nature of the payments makes all the difference so speak with your Liberty Tax expert today.
TYPICAL PLATFORMS FOR 1099-K
Below are some examples of networks and online platforms that must report payments made for goods and services if the total is $600 or more.