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BTB Stock Income Tax Updates

What You Should do if You Receive a 1099-K

If you sold goods or services in 2023 and received payments through certain payment apps or online marketplaces or accepted payment cards, you could have received a Form 1099-K, Payment Card and Third Party Network Transactions. You may receive this form even if your transactions are below the $20,000 in payments and over 200 transactions thresholds. 

Regardless of whether you received a Form 1099-K or not, you must report all your income. This includes payments you receive in cash, property, goods, digital assets or foreign sources or assets. It’s important to note, just because a payment is reported on a Form 1099-K does not mean it’s taxable.

What to do with a Form 1099-K received in error

  • People may get a Form 1099-K when they shouldn’t have if it:
  • Reports personal payments from family or friends like gifts or reimbursements.
  • Doesn’t belong to them.
  • Duplicates a Form 1099-K or other information reporting form they already received.

If this happens:

  • Contact the issuer immediately – see “Filer” on the top left corner of Form 1099-K to find out the name and contact information of the issuer.
  • Ask for a corrected Form 1099-K that shows a zero amount.
  • Keep a copy of the original form and all correspondence with the issuer for your records.
  • Don’t wait to file taxes. File even if a corrected Form 1099-K is unavailable.

What to do with an incorrect Form 1099-K

If the payee Taxpayer Identification Number (TIN) or gross payment amount is incorrect taxpayers should request a corrected form from the issuer.

  • See “Filer” on the top left corner of Form 1099-K to find the name and contact information of the issuer. If a taxpayer doesn’t recognize the issuer, they should contact the Payment Settlement Entity (PSE) identified on the bottom left corner of the form above their account number.
  • Keep a copy of the corrected Form 1099-K with other tax records, along with any correspondence from the issuer or PSE.
  • Don’t contact the IRS. The IRS can’t correct Form 1099-K from an issuer.

Don’t wait to file taxes. To file a tax return, take these steps:

  • If the Payee Taxpayer Identification Number (TIN) is incorrect report payments from the Form 1099-K and any sources of income on the appropriate tax return.
  • If the gross payment amount is incorrect report the amount from your incorrect Form 1099-K on Schedule 1 (Form 1040), Additional Income and Adjustments to Income.

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