Q&A of the Week February 23, 2022

Question:

What is Form 1099-K?

Answer:

Form 1099-K reports the gross amount of reportable transactions from Payment Card and Third-Party Network Transactions (Venmo, Zelle, Square, and PayPal.)

The gross amount may not be the same as the taxable amount because it does not account for fees, credits, discounts, refunds, etc.

Taxpayers who received payments via a payment card or third-party network transaction should receive Form 1099-K from each Payer.

Recordkeeping is very important to ensure accurate reporting.

This article provides more information: https://www.cassadyschiller.com/post/new-tax-reporting-requirements-for-payment-apps-could-affect-you