Can I Issue Form 1099 MISC & 1099 K to the same person? Have you paid a person as other income of $600 during the tax year? Are the payments made through a debit card or credit card basis? Then you’ll issue both the 1099 MISC Form and the 1099 K Tax Form to the recipient.
Getting confused about why to issue both the Forms? Don’t worry! We are here to clear your confusion. We provide you with information regarding payments reported on the 1099 K Form & the Printable 1099 MISC Forms.
What do you report on 1099 MISC and 1099 K?
Online 1099 MISC Forms used by the employers or any other person who paid a self-employed individual for performing work. The payments made to the person more than $600. The payments below $600 not reported through the 1099 MISC Form.
1099 K Form used to report payments made from payment card transactions. The payment card transactions include credit or debit cards respectively.
Purpose of IRS MISC & K Form
Form 1099 MISC and Form 1099 K reports income received by an individual during a tax year. The independent contractor and the IRS receive both the Fillable 1099 MISC Form and 1099 K Tax Form. But the purpose of the Forms different.
Businesses send 1099 MISC Online Form to the independent contractors for paying more than $600 for performing work during the calendar year. Private individual persons not required to file a 1099 MISC Form Online.
Financial institutions send Form 1099 K to the individual persons who accept payments through bank card transactions. 1099 K Form shows the total bank card revenue for the year.
Form 1099 MISC and 1099 K Form Reporting requirements
The following the requirements of Fillable 1099 MISC Online Form IRS:
- Identify whether you’re paying a person or an independent contractor.
- Payments made with the independent contractors exceed the threshold amount of $600.
- Compensation made with the person within the tax year or not.
- The independent contractor receiving payment is an individual or entity or estate.
- Amount paid on the course of business or trade.
Here are the requirements of 1099 K Form
- Identify whether the payments made are on payment card transactions i.e. credit cards or debit cards.
- Payments made are on third-party network transactions.
- The threshold amount exceeds $20,000.
- If the transactions are more than, 200.
Difference between 1099 MISC Form and 1099 K Form
Differences between the 1099 MISC Form and the 1099 K Form are discussed below:
Corporation requirements not the same for the 1099 MISC Form and 1099 K Form. If you’re running a business that is incorporated and treated as an S corporation or C corporation, then you will require to send Efile 1099 MISC Form.
Financial institutions send 1099 K Form to all businesses with bank card revenue regardless of whether they incorporated.
Income reported twice
In some situations, you can observe income reported twice on Form 1099 MISC and 1099 K Form. For example: If you’re working as a carpenter for a newly operated business and received $2,000 as annual payment and you kept a credit card for the payments, then the business sends you a 1099 MISC Form and 1099 K Form. On the other hand, 1099 MISC Form indicates miscellaneous income you received in a tax year and 1099 K Form indicates the payments received via credit card.
Purpose of the Forms
Form 1099 MISC reports income from a particular business or trade regardless of the form of payments. Also, the 1099 K Form reports bank card income from all your customers and clients.
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