Tax-filing season has begun as companies begin sending and receiving forms as required by the IRS. PayPal sent sellers an email letting them know their Form 1099Ks are available for download, and it may also arrive by post in the coming weeks along with those from other payment processors and from marketplaces such as Etsy and Amazon (and eBay once it begins processing payments on your behalf).
Need to brush up on what a Form 1099K is? The IRS explains:
Form 1099-K, Payment Card and Third Party Network Transactions, is an IRS information return used to report certain payment transactions to improve voluntary tax compliance. You should receive Form 1099-K by January 31st if, in the prior calendar year, you received payments:
-from payment card transactions (e.g., debit, credit or stored-value cards), and/or
- in settlement of third-party payment network transactions above the minimum reporting thresholds of –
-- gross payments that exceed $20,000, AND
-- more than 200 such transactions
You can read more on
this page of the IRS website.
For sellers who operate their ecommerce businesses certain states including
Massachusetts and
Vermont, be aware that payment processors will send you Form 1099K if you have gross payments of only *$600* or more, as sellers discovered to their
great surprise last year. (Be sure to check for the latest laws in your state.)
PayPal explains how to download Form 1099K in the email notice it sent, but we're not sure if you'll also receive it by snail-mail in all cases. The company stated in its email, "You will also receive this form in the postal mail soon, if you have not consented for e-delivery of a Form 1099K." Here's some helpful information about Form 1099K on the
PayPal website.
The PayPal notice serves as a reminder that you can probably download the forms you need for tax reconciliation and filing from other websites with which you do business.
And one more caveat: if you receive emails about tax forms, don't click on links in the email to LOG-IN. Instead, use the bookmarks you saved in your browser. The only thing worse than doing your taxes is becoming a victim of fraud!
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Your 1099K May Be on the Way