Taxpayers who receive a Form 1099-K should use it along with their other tax records to calculate their accurate tax obligation. Unless exempted by law, taxpayers are required to report all their income on their tax return, even if they don’t receive a Form 1099-K. |
| Taxpayers will receive Form 1099-K for business transactions, including income from:A business the taxpayer owns.Self-employment.Activities in the gig economy.The sale of personal items and assets.If you receive money as areimbursement, you don’t need to report it on a 1099-K form. To avoid mistakes, ask the sender to label it as a non-business transaction and keep a clear record of who sent it and for what purpose. Good recordkeeping is essential.IMPORTANT The new reporting threshold requirement for payment apps, also known as third-party settlement organizations, starting in 2023 is more than $600. Compared with The old threshold was $20,000 and 200 transactions per year.What to do when a Form 1099-K is incorrectIf you have received a Form 1099-K for the sale of personal items or if you believe that it was issued in error for transactions between friends and family, here’s what you can do. If the details on Form 1099-K are inaccurate, taxpayers should promptly reach out to the issuer. The organization’s name is located in the top left corner of the form. Taxpayers should retain copies of all communication with the issuer for their own records. Schedule a Call Now If this tax season was not what you expected, there are some changes you can do to make next year more smoothly. Make a list of the tax documents you need. Did you start a new job? Did you take a new contract? Take note that you will need documentation of this income. Request W-9s from contractors before they start to work. Stay up-to-date on your bookkeeping. Is much more manageable and makes easier to catch potential mistakes or fraud. |