IRS Form 1099-K reports payments received through reportable payment card transactions and/or settlement of third-party network transactions.
These payments can come from various sources, including:
Form 1099-K must be completed and submitted annually to the IRS by payment card companies, payment apps, and online marketplaces. If your business meets the following criteria within a calendar year, you must file Form 1099-K:
Payers must be aware of two important deadlines related to Form 1099-K:
The deadline for payers to submit Form 1099-K to the IRS depends on the filing method:
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Filers must deliver copies of Form 1099-K to payees by January 31st of the year following the relevant tax year. This allows payees to accurately file their tax returns on time.
Missing these deadlines or providing incorrect information on Form 1099-K can lead to IRS penalties. To avoid potential penalties, filers should take steps to ensure that Form 1099-K is filed and distributed both accurately and on time.
If you miss filing Form 1099-K within the deadline, the IRS will impose a penalty. Here are the Form 1099-K penalty rates:
Days late | Penalty per return |
---|---|
Up to 30 days | $60 |
31 days late through August 1 | $130 |
After August 1 or not filed | $330 |
Intentional disregard | $660 |
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Let's see line-by-line instructions on how to fill out Form 1099-K.
Enter your name or business name, and complete address.
Enter the filer’s TIN (EIN) of the entity with the filing requirement.
Enter the payee’s TIN (EIN / SSN / ATIN / ITIN).
Check the
Check the
Enter the recipient’s name and complete address.
Enter the total dollar amount of all payment card and third-party network transactions for the calendar year before any deductions or adjustments. This is the sum of the full charge amounts for each transaction involving each payee, determined on the transaction dates, without subtracting any credits, fees, refunds, discounts, shipping charges, or other amounts.
Enter the total dollar amount of all payment card and third-party network transactions for the calendar year where the physical card was not present. This includes online orders, phone orders, and catalog orders. Report the full charge amounts before any deductions or adjustments like credits, fees, refunds, discounts, or shipping charges. Use the transaction dates to determine the amounts.
Enter the 4-digit Merchant Category Code (MCC) that classifies the type of business the payee operates for the payment card transactions you are reporting on Form 1099-K. If you use a classification system other than MCCs, select the MCC that best describes the payee's primary business activity.
Enter the number of payment transactions processed through the payment card/third-party payer network.
Report any federal income tax withheld from payments reported.
Enter the gross amount of the total reportable payment transactions for each month of the calendar year.
Box 6: Enter the 2-letter state abbreviation for the state
Box 7: Enter the state identification number
Box 8: Report any state income tax withheld from the payment
You can file Form 1099-K, either electronically or by mail.
E-filing is the IRS-recommended method due to its efficiency, accuracy, and quick processing notifications.
To e-file Form 1099-K, you can use an IRS-authorized e-file service provider, such as TaxZerone. TaxZerone simplifies the e-filing process and allows you to complete it within minutes. Here's how it works:
While less efficient, paper filing remains an option for those who prefer it. Here are the steps for paper filing:
Steps for paper filing:
Important considerations for paper filing
Alternatively, you can file Form 1099-K electronically for faster processing and delivery, reducing the risk of delays or lost forms.
If you prefer paper filing, the mailing address for Form 1099-K varies depending on your business location. Below is a table summarizing the mailing address for Form 1099-K:
If your business operates in or your legal residence is… | Mail Form 1099-K to… |
---|---|
Alabama, Arizona, Arkansas, Delaware, Florida, Georgia, Kentucky, Maine, Massachusetts, Mississippi, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Texas, Vermont, Virginia | Internal Revenue Service Austin Submission Processing Center P.O. Box 149213 Austin, TX 78714 |
Alaska, Colorado, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, North Dakota, Oklahoma, Oregon, South Carolina, South Dakota, Tennessee, Utah, Washington, Wisconsin, Wyoming | Department of the Treasury IRS Submission Processing Center P.O. Box 219256 Kansas City, MO 64121-9256 |
California, Connecticut, District of Columbia, Louisiana, Maryland, Pennsylvania, Rhode Island, West Virginia | Department of the Treasury IRS Submission Processing Center 1973 North Rulon White Blvd. Ogden, UT 84201 |
Outside the United States | Internal Revenue Service, Austin Submission Processing Center, P.O. Box 149213, Austin, TX 78714 |
Before you start e-filing Form 1099-K, ensure you have all the necessary information to facilitate a smooth and efficient filing experience. Here’s what you need to gather:
Step 1: Complete Form 1099-K
Open Form 1099-K and fill out the necessary fields with the information you have gathered.
Step 2: Review and transmit the return
Carefully review all the entered information to ensure accuracy. Once verified, transmit the completed Form 1099-K to the IRS.
Step 3: Provide the payee copy
After successfully transmitting the form to the IRS, send a copy of the completed Form 1099-K to the recipient.
E-filing Form 1099-K with TaxZerone offers several advantages:
By using TaxZerone's e-filing solution, you can streamline your Form 1099-K filing, save time, reduce errors, and provide a better experience for your recipients.