All kinds of paperwork is flying in your direction at tax time, and that can be confusing and overwhelming. The Internal Revenue Service (IRS) also occasionally changes required forms, adding even more uncertainty to the process. The 1099-K is a relatively new form that the agency rolled out in 2012.
The 1099-K (Payment Card and Third Party Network Transactions) is an information return that the IRS uses to improve tax compliance. It helps the agency learn more about the payments a business has processed, and it reduces the risk of freelancers and business owners underreporting income from payment cards and third-party network transactions.
You may receive this form if you collect revenue through those types of transactions. Wondering what to do with your 1099-K? Want to learn more about this form? This guide will tell you everything you need to know.
Who Issues the 1099-K?
Payment Card Transactions
Third-Party Payment Network Transactions
Gross Payment Amount
Special Considerations With the 1099-K
Shared Credit Card Terminals
Some companies might send you a 1099-NEC if they paid you more than $600 for contract labor. This income may also appear on your 1099-K if the company paid you through a third-party settlement company. Make sure not to double-report this income, or you will face a higher tax liability than necessary.