Before starting your Form 1099-K filing, it’s important to collect all the required information to prepare Form 1099-K.
Form 1099-K is used to report payments in settlement of reportable payment transactions.
What’s new for Form 1099-K?
The OBBA reversed the Form 1099-K changes implemented in the American Rescue Plan Act of 2021 which reduced the filing threshold to $600 and no transaction minimum.
Filing is required if payments with any payee exceeds the threshold of $20,000 and 200+ transactions.
Another recent change is the switch to a continuous use form and instructions, which will be updated as needed instead of annually.
What information is needed to prepare Form 1099-K?
The information required for preparing Form 1099-K includes basic information on the filer and the payee, information about the transactions, and state information if applicable.
Payer information
You will need to include the following filer information on each 1099-K form you prepare.
- Filer’s name
- Filer’s address
- Filer’s Taxpayer Identification Number (TIN)
- Filer’s contact phone number
- Checkbox to indicate if the filer is a Payment Settlement Entity (PSE) or an Electronic Payment Facilitator (EPF) or other third party
- Checkbox to indicate if the reported transactions are payment card transaction or third party network transactions
Recipient information
You will need to include the following payee information on each 1099-K form you prepare.
- Payee’s name
- Payee’s address
- Payee’s TIN
Transaction information
You will need to include the following transaction information on each Form 1099-K you prepare.
- Gross amount of transactions
- Amount of Card Not Present transactions
- Merchant category code
- Number of payment transactions
- Federal income tax withheld
- Gross amount of transactions by month
- State information, if applicable
Next Steps
Once you have gathered information to prepare Form 1099-K, you can:
Don’t forget to check the deadlines to avoid any potential late filing penalties!
BoomTax, The Boom Post, and its affiliates do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors prior to engaging in any transaction.
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