Form 1099-K, Payment Card and Third Party Network Transactions, is a form issued by financial institutions that process electronic payments such as credit and debit card transactions. Form 1099-K is sent to individuals that receive such payments by January 31st and it is considered part of the gross receipts of the taxpayer's business income.
Form 1099-K shows the gross amount of income that the taxpayer received from electronic payments such as credit cards, debit cards, and other third party payers in the operation of their business activity.
The income received on Form 1099-K should be included in the gross receipts of the taxpayer's business income:
- For a sole proprietor, Form 1099-K receipts are generally reported on Schedule C, but could potentially be reported on Schedule E or F.
- For a partnership or corporation the income is reported as part of the company's gross revenue.
If the taxpayer is filing a Schedule C (Form 1040), to enter gross receipts from Form 1099-K in TaxSlayer ProWeb create the Schedule C, then select:
- Gross Receipts or Sales - Include the amount from Form 1099-K in the total amount of gross receipts.
If desired, gross receipts can be itemized to help make it clear where the total comes from. To itemize gross receipts, click the blue button to the right of the amount field, enter a description of the source document, e.g., "1099-K from Uber", the amount from Box 1a, and select CONTINUE. To add a second income source, select the plus link.
If Form 1099-K reflects any federal income tax withholding in Box 4, from the Federal Section of the tax return select:
- Payments & Estimates
- Other Federal Withholdings - Enter the amount in the "Federal withholding from Form 1099" field.
Note: This is a guide on entering a Form 1099-K into TaxSlayer ProWeb. This is not intended as tax advice.