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How to Report 1099 K Income on Tax Return

Two Methods:

Form 1099-K is used to report income received from income received from electronic payments such as credit cards, debit cards, PayPal, and other third party payers. In most cases, the payment settlement entity (PSE) will send you a 1099-K by January 31. Be sure to add the income you report on your 1099-K to your total business income when you file your taxes.

Steps

Reporting 1099-K Income

  1. Report it on Form 1040 if you are self-employed.If you're self-employed or an independent contractor, you'll report your 1099-K income on Schedule C of form 1040. To report your 1099-K income on this form, simply enter your gross 1099-K income on line 1a of Schedule C.
    • Your 1099-K income is separate from your earnings received by cash, check or any other means. List the total income received by these methods on line 1b.
    • To calculate your gross receipts for the year, add the amount from line 1a with the amount from line 1b. List the full amount on line 1d.
    • You’re responsible for keeping track of any business expenses you had and reporting them as deductions on your Schedule C.
  2. Report it on Forms 1065, 1120 or 1120S if applicable.If you have a partnership, corporation or an S corporation, you'll report your 1099-K income on line 1a of your form. Find your gross 1099-K income and list it on the correct line.
    • Your 1099-K income is separate from your earnings received by cash, check or any other means. List the total income received by these methods on line 1b.
    • To calculate your gross receipts for the year, add the amount from line 1a with the amount from line 1b. List the full amount on line 1d.
    • If you're filing taxes for the 2011 tax year, there is no special line for 1099-K income. Add your 1099-K income to your other receipts and enter the total on line 1b.

Checking the Form's Accuracy

  1. Determine whether a portion of your income comes from a PSE.A PSE, or payment settlement entity, is any third party company that handles payment transactions. Whether you're self-employed or you own a business, if you accept credit cards and other forms of electronic payment, you may be eligible to fill out a 1099-K form. If you don't receive any income via electronic payment, you should not have to fill out a 1099-K.
    • Income received from credit cards, debit cards, and stored-value cards may need to be reported on a 1099-K form.
    • Income received through PayPal, Google Checkout or another payer may also be considered 1099-K income.
  2. Assess the number of transactions and the gross payments received.If you conducted 200 or more transactions with one or more PSEs that garnered a total income of ,000 or more, you should receive a 1099-K form in the mail with these totals reflected on the form. If you conducted fewer than 200 transactions or the total came to less than ,000, you do not need a 1099-K form.
    • Sometimes companies send out 1099-K forms even when the recipient may not be required to use them. It's a good idea to manually add up the number of transactions conducted with PSEs to determine whether you need to fill out the form.
    • Not everyone who accepts credit card or third-party payments has over 200 transactions during a given tax period. For example, if you're self-employed and only received 30 credit card payments last year, you won't need a 1099-K. If your business does not accept credit cards or other forms of electronic payment, you should not receive this form.
    • The gross amount of a reportable payment does not include any adjustments for credits, cash equivalents, discount amounts, fees, or refunded amounts.
  3. Check the totals against your records.Make sure that your business records accurately reflect the income reflected on the form you receive. Check your merchant statements and payment card receipt records to ensure accuracy and have backup in case you are audited. If you feel there is inaccurate information on your 1099-K, call the PSE that sent it to have a correction made. You should also contact the PSE if the following errors occur on your form:
    • The form is a duplicate
    • The Taxpayer Identification Number is incorrect
    • The number of payment transactions is incorrect
    • The Merchant Category Code doesn't describe your business correctly

Community Q&A

Search
  • Question
    If I have a 1099 K and earned less than 0, do I need to report it?
    wikiHow Contributor
    Community Answer
    Yes. The minimum earnings amount needed to "generate" a 1099K or 1099-Misc is 0 from any single company, however, that does not mean you can avoid reporting it/them. The information from these forms go on a Schedule C (which may also require a Schedule SE form). Then the info from these forms go on your 1040. Each different type of business requires a different Schedule C. For instance, if you drove for both Uber and Lyft, you can file just one Schedule C and list the earnings from both since they are similar businesses.
    Thanks!
  • Question
    I have a self-employment income from Uber. Do I need to report this on my taxes?
    wikiHow Contributor
    Community Answer
    Yes, as it extra income. It doesn't matter what you earn; just let them know if you are unsure of what you are able to earn tax wise.
    Thanks!
  • Question
    Are a filer and payer considered the same?
    wikiHow Contributor
    Community Answer
    The filer is the person filing the tax return. They payer is the person that makes a payment. If you got a 1099-R, then the business that sent you the money on the form is the payer.
    Thanks!
  • Question
    I earned 0 driving Uber. Do I claim it as income?
    wikiHow Contributor
    Community Answer
    Yes, if it is a official job. If they paid you to drive, it would count as income.
    Thanks!
  • Question
    I work for Uber as an independent courier, but since I get paid from Uber via direct deposit and I received a 1099-K and a 1099-MISC, which 1099 should I use on my tax report?
    wikiHow Contributor
    Community Answer
    Both. All 1099s and all W2s need to be reported to the IRS.
    Thanks!
  • Question
    The gross amount shown on the 1099-K was K. I included K that the issuing company charged as fees and never gave me. What do I do?
    wikiHow Contributor
    Community Answer
    If this is from a remunerated job, you need to include all the proceedings from your 1099K in Schedule C, and deduct the fees charged there. If this came to you as a result of some sales you made, classify the merchandise to determine if it goes on gain/loss or under some other classification, and again, reduce the fees from the total made.
    Thanks!
  • Question
    How do I report personal items that I've sold on my tax return?
    wikiHow Contributor
    Community Answer
    You don't have to. Only items that were previously deducted as expenses in a business need to be reported when sold, and only then if they have not been fully depreciated.
    Thanks!
  • Question
    Do Uber and/or Lyft earnings need to be reported to the IRS as estimated earnings every 3 months?
    wikiHow Contributor
    Community Answer
    If I'm not mistaken, you don't need to report your earnings quarterly, but it's a good idea to pay your estimated taxes on those earnings to the IRS quarterly. For example, if you made ,000 in the first quarter of the year, calculate your taxes from the worksheet on the IRS page by searching "1040-ES estimated." Then, fill out a 1040-ES form and mail in a check with it.
    Thanks!
  • Question
    Do I need to file a 1099 K if I only had 77 transactions and only 7.00 income from them?
    wikiHow Contributor
    Community Answer
    It depends where that income is coming from. Talk to your accountant for advice.
    Thanks!
  • Question
    Do I have to report .00 on a 1099-K?
    wikiHow Contributor
    Community Answer
    It depends where the income came from. Do some research on the IRS.gov site or ask a tax consultant.
    Thanks!
Unanswered Questions
  • The 1099K that I received shows all the insurance premiums that I've collected on behalf of an insurance company. I sent the money to the insurance company. How do I report this?
  • Is Box 1 used as taxable?
  • Why did I get two 1099K from the same credit card processing company?
  • Which box on a 1099 K form has the total I need to use for my income tax?
  • I sold and received payment for items as an individual seller on eBay last year - the 1099-K form that I received is reporting twice as much as what I sold, less eBay fees. What do I report?
Ask a Question
200 characters left
Include your email address to get a message when this question is answered.
  • If 1099-K you received is larger than your gross receipts, you probably had employees that were receiving tips from customers that were charged to the credit card. Make sure to report all employee tips on their W-2 forms, as this way it becomes a subtraction on your tax return.

Warnings

  • Keep in mind, 1099-K is used only to report to the IRS amounts of your gross receipts charged on the credit card. You still have to report the rest of your income that was paid by checks, cash, etc.





Video: What Income Is Taxable When Self-Employed? 1099-misc 1099-k [Taxes in TurboTax VIDEO #2]

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Date: 13.12.2018, 11:10 / Views: 43443