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Understanding 1099–K | Netcom PaySystem Merchant Services

Understanding 1099–K

Understanding 1099–K

The 1099-K is an IRS information return for reporting certain payment transactions to improve voluntary tax compliance. You should get a 1099-K by the end of January 2013 if, in 2012 you received payments from

  • payment card transactions (e.g., debit or credit cards)
  • in settlement of third party payment networks (i.e., online sellers) above the minimum reporting thresholds
    - gross payments that exceed $20,000, AND
    - more than 200 such transactions.

 

Report 1099-K Income
Report the gross receipts or sales from all business operations in any amounts shown on Form(s) 1099-K.

If you get a Form 1099-K for amounts that belong to another person, or are a co-owner who may need to file a Form 1099-K or other information returns for other owners, check the General Instructions for Certain Information Returns.

If you are an independent contractor, the trade or business should continue to report payments made to you on Form 1099-MISC as they have done in the past. No Form 1099-K should be issued.

Make sure the merchant card or third-party clearing house has your correct Taxpayer Identification Number (TIN) by checking the TIN on Form 1099-K against the TIN you reported on Form W-9.

More Info
If you have questions about the amount reported, contact the filer (see the upper left corner of Form 1099-K). If you have questions about the merchant or third party transaction network, find the contact in the lower left corner of Form 1099-K.

FAQs on Payment Card and Third Party Network Payments
1099-K Reporting Requirements for Payment Settlement Entities
Third Party Reporting Information Center

Page Last Reviewed or Updated: 19-Feb-2013

Resource: IRS.gov