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Everything you need to know about 1099-K Tax Forms and Tax Season

We want to make sure you are prepared for tax season and that you can find everything you need from your Square reports at this busy time of year.

 

Let’s get started!

 

What is a 1099-K form?

The IRS requires Payment Settlement Entities, such as Square, to report the payment volume received by U.S. account holders. A 1099-K form is the information return that is given to the IRS and qualifying customers.

 

Do I qualify for a 1099-K form?

Square will provide a 1099-K form for you if meet the following criteria:

 

1. You processed more than $20,000 in gross sales from goods or services in the calendar year AND

2. You completed more than 200 card transactions (debit, credit and tap) in the calendar year. 

 

Note: If you set up your Square account in Massachusetts or Vermont Square is required to issue a 1099-K and report to your state when you process $600 or more in credit card payments. Learn more about this form and requirements on the IRS website

 

How do I download my 1099-K form?

If you qualify for a 1099-K form you'll see a link to download your 1099-K form on the Tax Forms tab of your Square Dashboard. Forms will be available by January 31st 2020.

 

Download 1099-K (5).gif

 

Where can I view my fees?

If you don't qualify for a 1099-K, you can calculate your year-end sales report, including fee information, from the Sales Summary tab of your Square Dashboard. Your tax professional may need this information to complete your tax forms.

 

You can sign in to your online Square Dashboard at squareup.com/login from a web browser. Click Reports > then click Sales Summary > edit the date range > and then scroll down to view the details of your report.
FeeReport.gif

 

1099-K form and Tax Season FAQs

Here are some frequently asked questions about tax season:

 

When will my 1099-K form be available? Forms will be available to download from your Square Dashboard by January 31st 2020.

 

What if I processed a refund, is it included?  The amount and transaction count on your form are calculated based on your gross sales on the transaction date of the sales. This includes revenue from card payments that were refunded.

 

What if I have multiple Square accounts? Our reporting thresholds of $20,000 and 200 transactions are based on the aggregate gross sales volume processed on all accounts that use the same EIN or SSN. If you have multiple accounts that use the same EIN, we will aggregate volume for all accounts and issue a 1099-K if you meet the thresholds.

 

How do I update my tax reporting information or add an EIN to my account? You can review and update your taxpayer information (legal name and EIN) from your online Square Dashboard — sign in from a web browser at squareup.com/login.

 

How do I get an EIN? An Employer Identification Number (EIN) is a federal tax identification number used by the IRS to identify your business for tax purposes. You can apply for an EIN using Square’s free EIN assistant.

 

What is a TIN? A Taxpayer Identification Numbers (TIN) is an identification number such as an SSN (for individuals) or an EIN (for businesses). These identification numbers are used by the IRS for tax purposes.

 

Are cash transactions included in the 200 transactions threshold? The 200 transactions threshold is for credit, debit, and tap payments only and does not include other payments like cash, checks or other tender.

 

What if I need to update a form for a previous year? Visit our Support Center for the steps to update your information and contact our team to update your 1099-K form for a previous year.

 

What’s a 1099-B form? If you use Cash App for Business or if you sold any Bitcoin through Cash App you’ll be able to download your 1099-B form at https://cash.app/account. Read more on the Cash App Support Center.

 

 

Click Reply below to let us know if you have any questions or visit our Support Center for additonal information about Square Tax Reporting!

 

We are happy to answer general questions here in the Seller Community. As always, for tax advice, please get in touch with a tax professional.

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Admin

Re: Everything you need to know about 1099-K Tax Forms and Tax Season

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Admin

Re: Everything you need to know about 1099-K Tax Forms and Tax Season

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AlexBenjamin

Re: Everything you need to know about 1099-K Tax Forms and Tax Season

Hello,

My 1099-K shows more revenue than I have collected. Is this because it includes sales tax and if so why is that included as revenue?

Thanks

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Admin

Re: Everything you need to know about 1099-K Tax Forms and Tax Season

Hi there, @AlexBenjamin! Thanks for reaching out with your questions here on the Seller Community 👏 Welcome, welcome!

 

Your issued 1099-K is going to include your entire gross amount collected by way of Square throughout the year - including your collected Sales Taxes. The IRS requires that we report over all funds processed from your business for the fiscal year.

 

We suggest you work with your local tax professional on how to best to designate Sales Tax reporting to the IRS from your Tax Forms. 

 

Let me know if you have any lingering questions. We are here to help!

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AJAMUSIC

Re: Everything you need to know about 1099-K Tax Forms and Tax Season

I'm having difficulty understanding the math done between my gross sales and refunds with what is on my 1099-K.  

 

For Example: I looked at May 2019 transactions, and he's a breakdown of what I'm seeing:  When I add all my Gross Sales and Refunds, it comes out to $80 LESS than what my 1099-K reports for the month. There's one day where the Net was -$20 due to a refund, and the only way I can make the numbers work is if I add the Gross Sales ($40) to the returns ($60) and subtract the Net Sales (-$20), but isn't that calculating the same figures twice? 

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Admin

Re: Everything you need to know about 1099-K Tax Forms and Tax Season

Hi @AJAMUSIC. Appreciate you taking the time to share this info. In this case, I'd probably work with a tax professional so they can go over your numbers line by line and pinpoint any discrepancies that you see. 

 

Good luck!

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Raff

Refunds and Charge Errors

How do I account for refunds/returns/errors in charges if the 1099-k doesn't back those out?  I asked my CPA, who didn't know why that's included if these charges were reversed.  If I use the 1099-k, the revenue is higher than what I actually received.

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Admin

Re: Refunds and Charge Errors

Hi @Raff! Welcome to the Community.

 

I merged your post with a relevant thread on 1099-K forms. 

 

It looks like there's some other sellers with the same question in here about refunded charges being included in the gross sales.

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wirelesspro

Re: Everything you need to know about 1099-K Tax Forms and Tax Season

I file my taxes for my business each month which includes all transactions through Square both cash and credit. Will i still need to file the 1099-k if i already paid taxes on these sales? 

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Admin

Re: Everything you need to know about 1099-K Tax Forms and Tax Season

Hey @wirelesspro! You'll automatically receive a 1099K through Square (regardless of if you're filing your taxes each month with an external party) if you've processed over $20,000 in credit card sales and over 200 transactions.

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