Save 75% on Vendor Payment Costs – Join our webinar and get 1 month free trial!
W-2 Filing Available for All Businesses and Individuals
We are pleased to announce that all businesses and individuals can now file W-2 forms with Zenwork. If you previously received a letter from the Social Security Administration (SSA) regarding electronic wage report submissions, please note that the issue has been fully resolved. Our systems are fully operational, and we are processing W-2 and W-2C filings without any disruptions.
Thank you for your continued trust!
1099 Forms
Payroll Forms
STOCK OPTIONS
WAGE TAX FORMS
FORM 592-B
ACA FORMS
1098 FORMS
480 FORMS
Extension Forms
Form 8027
Form 8955-SSA
1042 FORMS
5498 Forms
STATE FILINGS
STATE Payroll Forms
STATE ONLY FILING
WEST
MIDWEST
SOUTH
NORTHEAST
File multiple returns through bulk upload and import data directly via QuickBooks, Xero, etc.
Manage multiple clients with a single sign-on and reduce operation workload with Tax1099.
Create, validate, schedule, and deliver forms effortlessly from a single platform.
Manage W-9, 1099-NEC, and other IRS forms for gig workers with our intuitive platform.
Verify Payees/Merchants with real-time TIN Matching and efile in bulk with our API.
Import and organize your trading data with our real-time data management.
TAX FORM FILING
Data Import & Management
USER & WORKFLOW MANAGEMENT
Validation & Checks
PRINT & DELIVERY
COMPLIANCE & security
ADDITIONAL FEATURES
Integrations
Acquire the help required from our support.
Visual guides to help you work with Tax1099
Stay up to date about latest IRS updates.
Read the real-life success stories of our users.
Explore industry insights & latest updates
The A-Z list for tax-related terms & definitions.
Listen to thought-provoking insights and discussions with experts.
Tools
Home » Form 1099-K Notices & Penalties For 2022
Note: IRS delays the rollout of the $600 threshold for 1099-K reporting.The threshold for Form 1099-K remains at $20,000 with a 200 transaction limit for the year 2023. This delay designates 2023 as a transition period, maintaining the existing requirements for reporting. Learn More
Note: IRS delays the rollout of the $600 threshold for 1099-K reporting.The threshold for Form 1099-K remains at $20,000 with a 200 transaction limit for the year 2023. This delay designates 2023 as a transition period, maintaining the existing requirements for reporting.
Keep yourself informed on the latest Form 1099-K notices and penalties for the 2022 tax year.
Form 1099-K is one of the most important information returns for third-party payment networks and payment card entities.
If you’ve received a copy of Form 1099-K from your payer; be it from a third-party entity like PayPal or Venmo or a payment card entity like MasterCard or VISA, it means that you’ve probably connected your bank account with these third-party entities to receive payments from your customers.
The PSE or payment settlement entities usually send a Form 1099-K when they process or facilitate payments for their merchants.
Let’s say that you’re a small business owner, and you have an online store where you sell electronic products like keyboards, earphones, USB drives, etc.
Now, when customers browse through your online store and shop for products, they will want to make payments online for an “instant” and convenient experience.
To enable such a quick and easy payment experience for your customers, you will need to connect with a third party. This could be a payment processor or a payment facilitator.
These third parties are known as payment networks and payment card entities.
Each time a customer places an order on your online store, the payments are received by the third party instantly, and they settle the amount into your bank account.
So, this is technically you “receiving” the payments from the third party.
Hence, the third-party payment network or payment card entity will send a copy of Form 1099-K to you.
Useful Read: Guide: Step-Wise Instructions To Read & Prepare Form 1099-K
Gig Companies: The payments are received by the gig company from the customer and later settled into the gig worker’s account. Examples: Lyft, Fiverr, Upwork, etc.
Merchant Economy: The payments are received by the merchant through electronic payment methods and the payments are later settled into the sub-merchant’s bank account.
1099-K payments should not be confused with personal payments.
For example, let’s say that you’re out for dinner with your friends, and you all decided to split the bill.
You will use Venmo or PayPal to transfer your share of the bill to your friend’s bank account. This is NOT a 1099-K payment because the nature of the transaction is personal.
Similarly, if you’ve sent $100 to a friend as a cash gift, it’s still not a 1099-K payment even though you are using a third-party network to “send” the gift.
Note: A transaction qualifies as a 1099-K third-party network transaction only when the transaction takes place in the course of business. Personal transactions do not constitute the 1099-K narrative.
On the other hand, if you receive payments from PayPal or Venmo for selling products online, expect to receive a Form 1099-K from a third-party payment network at the end of the tax year. This is because you’re an online business and selling products online is what you do, making your payments, your “income”.
eFile Form 1099-K Now
Also Read: What Has Changed In Form 1099-K Reporting In 2022?
You need to file a Form 1099-K If:
You must issue a copy of Form 1099-K to your payee and file the final Form 1099-K with the IRS.
The recipient (business or individual) need not file a Form 1099-K. The payee just needs to save the copy of the Form 1099-K for documentation purposes.
Use the following table to understand the types of penalties assessed by the IRS on payers for delaying or missing the 1099-K filings.
The smartest way to avoid such penalties is to never miss a deadline.
Schedule your 1099-K filings today with Tax1099 – Sign Up Now & Schedule 1099-K Filings
Note: There are no specific penalties for the 1099-K form type. The general 1099 penalty rules apply to all 1099 forms, including Form 1099-K.
Use the following due dates table to prepare and file your 1099-K returns easily.
So, there you have it.
Notices, penalties, due dates, and every other detail you need to know about Form 1099-K.
Are you a gig company, a payment processor, or perhaps a payment facilitator?
Then you must know just how complex it is to file 1099-K forms in batches to the IRS.
Third-party network entities like yours always have to deal with the hassle of manually obtaining the payee TINs, preparing the returns, and filing them.
But what if we told you that all you had to do was sync your merchant data with us, and we’ll take care of the rest?
Yes!
Tax1099’s exclusive API service enables payment settlement entities like yours to prepare, validate, and eFile 1099-K forms in just a few clicks. Get A Demo today to watch Tax1099 in action.
Master tax filing with timely updates, expert tax tips, step-by-step video guide and exclusive insights!