Understanding about 1099-K Tax Form Reporting Requirements

1099 K form is basically an IRS information return which is used for reporting some payment transactions for improving voluntary tax compliance. IRS 1099 K needs to be received by 31^st January in the prior calendar year of receiving payments:

• From payment card transactions like credit, debit or store-valued cards. 
• In the settlement of third-party payment network transactions more than minimum reporting thresholds of gross payments exceeding $20,000 and above 200 transactions.

Form 1099 Reporting Requirements

The 1099 K reporting requirements include that:

1. All payments made in the settlement of the payment of card transactions like a credit card.

2. Payments in the settlement of transactions of third party network if the gross payments for participating payee is more than $20, 000 and there are above 200 transactions with participating payee.

 

The Verification Procedure

The verification procedure is carried out for ensuring that the tax returns are complete and correct by using the following steps:

TIN Matching Program

The TIN Matching Program which is basically an internet-based pre-filing e-service can be used for ensuring that the 1099 K tax form that is submitted features the right TIN. This program allows you to carry out the verification of the TIN provided by the taxpayer against the IRS records before filing information returns.

Name Control

Name control is basically a series of characters that are obtained from the name of the taxpayer and the TIN on electronically filed returns matching the records.

Filing Procedures and Deadline

1099 form online is due for the merchants by 31^st January. Additionally, this form is due to the IRS by the dates that follow:

• ·         28^th February for filing on paper.
• ·         31^st March for filing electronically.

It is necessary to E-file 1099 within these dates for the proper maintenance of records and for standing up to the expectations of the IRS.