Surgent's A Complete Guide to Form 1099-K

Overview

The Internal Revenue Code (IRC) requires entities making certain types of payments, including business payments to contractors, to file information returns with the IRS. Information returns are intended to improve voluntary compliance with tax law by providing information about potentially taxable transactions to the IRS and taxpayers. A payment settlement entity (PSE) must file Form 1099-K for payments made in settlement of reportable payment transactions for each calendar year.

Prerequisites

None

Objectives

• Understand the tax return treatment of the Form 1099-K, a form that millions of taxpayers will receive and/or send in 2025

Highlights

• What Form 1099-K is designed to do
• Filing thresholds for the Form 1099-K
• Who sends and who receives Form 1099-K
• Form 1099-K reporting thresholds
• Personal payments from family and friends
• Personal items sold at a gain or a loss
• Reporting provisions for gig workers, partnerships, and corporations
• Mistaken receipt of a Form 1099-K
• What to do when the Form 1099-K has a mistake
• Situations when the gross amount on a Form 1099-K must be shared
• How to handle the receipt of multiple Forms 1099-K