If you’re a freelancer who receives the majority of payments for your products or services via credit card, you may have received a form 1099-K. For many online business owners/freelancers tax time is already very stressful; in come a new tax form. However, if you received a 1099-K form, don’t fret, I’ll explain in this blog post what I’ve learned about the form from my own research, which started with a direct call to the IRS. The first thing I suggest to anyone who receives a tax form they don’t understand is to: call the IRS! Believe me, I have called them several times over the years since I started my company and incorporated and they are you Friend! That’s right; the IRS is your friend. Even thought I have a CPA, I handle the vast majority of my accounting, as I always want to know what’s going on money-wise with my business. So what did the IRS have to say about this from 1099-K?
The form will now be sent to online business owners/freelancers who are paid with credit cards or payment processors like PayPal and Amazon.com. The business owners/freelancers must also have made over 20k in payments for the year via these channels and sold over 200 products. The credit card processors, PayPal or Amazon.com will originate the form and let the government know all of the specifics. If you receive this form make sure you report all of the income listed. If you have additional concerns or questions, I advise you to not simply trust your CPA or accountant, but make a call yourself to the IRS or visit their website at http://irs.gov. I hope I’ve been of help and if you have additional comments or questions you’d like to ask of me, feel free to leave a comment, as I always answer them personally.
This is Shilonda Downing, signing off for Virtual Work Team LLC!