Tax form 1099-K, Merchant Card and Third Party Payments

How do you report your 1099-K income?

Internet businesses are fast springing up on every nook and cranny all over the world. When you consider the increase in blogging, affiliate marketing and even eBay sellers and other online business endeavors, the issue of miscellaneous reporting income and 1099-K forms will become more important in the future.

I’m sure you know that you must report your earnings via: wages, interest, salaries, dividends, tips and even commissions as income that comes on tax returns, you also need to get acquainted with reporting other income sources like:

1 money you earned from menial jobs

2 barter exchange of goods/services

3 your awards, your prizes, your achievements, contest winnings etc

4 your gambling winnings, puzzle winnings etc

If you are a U.S. tax payer, it is advisable that you learn to report all the incomes you earn from different sources; from any country except it is exempted by the U.S. tax code.

Assuming you earn most of your income from running ads on your blog, selling affiliate products, making money from your mailing list, selling on eBay, income you earn from Forex Trading or even service rendering. Provided you earn such income from the Internet, reporting is vital.

You should always get a form 1099-MISC to report your income if you earned $600 from a company for instance. You might not receive a form 1099-K, always know that you still need to report your income clearly.

The income you earn is always taxable whether you receive the form 1099-MISC or not. Your income might still be under $600 but you still have to report your earnings. Don’t go with the common misconception that you don’t need to report all your earnings. There is actually no stated minimum amount a taxpayer may exempt from their gross earnings.

For the independent contractors, income may be reported as taxable even if they earned less than $600. They might not get a Form 1099-MISC, according to our earlier statement; the taxpayer has to report income no matter what the amount is.

Form 1099-K is new and may be subject to updates, but if you earn money through PayPal, Google, Amazon or other online sources, you can expect to receive one or more 1099-K’s in the future.