|EcommerceBytes-NewsFlash, Number 2708 - January 02, 2012 - ISSN 1539-5065 2 of 3|
This year, companies that process credit and debit cards as well as third-party network payments such as PayPal, Amazon.com and Google are required to report to merchants and to the IRS the gross amount of the transactions they've processed. If the small business exception, which is fewer than 200 transactions totaling less than $20,000, does not apply to you and you receive Forms 1099-K, be sure to handle them properly on your tax return.
Where to enter amounts from 1099-K
However, the IRS has deferred the requirement for reporting 1099-K amounts on the new line. Instructions to all the business returns, including Schedule C of Form 1040, say to enter zero on line designated for reporting amounts from Forms 1099-K, and instead report such amounts, along with other gross receipts, on the line for all gross receipts. Presumably, this is where the IRS computers will be looking for 1099-K transactions.
Don't over-report income
Watch for duplicate reporting
What to do if you receive both 1099s for the same services: Contact the issuer of the 1099-MISC immediately. Have the payor reissue a corrected 1099-MISC to eliminate any payments that were made to you by a payment means reported on 1099-K.
See more information with question and answers from Barbara and leave a comment on the EcommerceBytes Blog.
About the Author
About the author:
Barbara Weltman is an attorney, prolific author with such titles as "J.K. Lasser's Small Business Taxes and The Complete Idiot's Guide to Starting a Home-Based Business," and trusted professional advocate for small businesses and entrepreneurs. She is also the publisher of "Idea of the Day(R)" and monthly e-newsletter "Big Ideas for Small Business(R)" at http://www.barbaraweltman.com and host of "Build Your Business" radio. Follow her on Twitter: @BarbaraWeltman.
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Sellers Can Expect Closer IRS Scrutiny of 1099-K Forms This Year - January 31, 2013
Lawmakers Back Bill to Simplify 1099-K Reporting Requirements - February 03, 2012
Outright to Help Online Sellers Handle New 1099K Tax Form - January 04, 2012