In 2022, there were a few changes to the process for issuing 1099-Ks. The process is outlined below. We have built WooCommerce Payments in partnership with Stripe, thus expect some communication from Stripe with regard to your 1099-K.
For the 2022 tax year, the U.S. threshold for issuing 1099-K’s has been reduced from $20,000 to $600. As such, if you have processed over $600 in payments in 2022, you will receive a 1099-K tax form.
Verification Phase: On or around November 28, 2022, merchants who are eligible to receive a 1099-K will be sent a verification email from WooCommerce Payments and Stripe. This email will have a link for you to confirm your identity, tax information, as well as provide you with the option to consent to e-delivery (meaning you will receive your 1099-K form electronically if you consent). We recommend adding firstname.lastname@example.org to your address book so the email isn’t marked as spam.
Should you need to update your information, you can do so via the link in the email. If you have any questions or need help, please reach out to WooCommerce support.
If you are unable to access the link, or you do not consent to e-delivery, you will still be mailed a physical 1099-K form.
eDelivery: Starting on or around January 3, 2023 WooCommerce Payments in partnership with Stripe will send you your 1099-K’s.Your 1099 tax form will be made available to view and download in Stripe Express. You’ll need this form to file your 2022 taxes.
In the event that you did not opt in to eDelivery, you will be mailed a physical copy of your 1099-K. Please note that due to delivery delays with the postal service, we cannot confirm exactly when you will receive it. If you have any questions, please reach out to WooCommerce support and we will be happy to help.
Form 1099-K is an information filing required by the Internal Revenue Service (IRS) of the United States. WooCommerce Payments is required to issue a 1099-K to U.S. persons with payments processed that exceed the following thresholds:
- For returns for the calendar year 2022:
- Gross payments that exceed $600
- For returns for calendar years prior to 2022:
- Gross payments that exceed $20,000, and…
- More than 200 such transactions
- For returns for calendar years after 2021:
- Gross payments for goods or services that exceed $600, and…
- Any number of transactions
Additional information can be found on the IRS website.
We recommend consulting with your tax advisor for additional information and to understand which threshold applies in your state.
We issue a 1099-K if a merchant meets either the federal filing threshold or a lower threshold applicable in their state.
A 1099-K may be issued for a few reasons, even if the IRS threshold is not met:
- Many states have a lower threshold than the federal government. A form will be filed if either the state or federal threshold is met.
- There are multiple accounts with the same tax identification number (TIN). Accounts using the same TIN are combined to determine if a filing is required. Even if all accounts are individually below the filing threshold, each account under the same TIN will receive a 1099-K if the combined total transaction and payment volumes exceed the threshold.
- A TIN, or Tax Identification Number is the number used for business reporting by the IRS. This may be the owner’s Social Security Number (SSN), or an Employer Identification Number (EIN), which you can get via the IRS website. More information here.
A 1099-K includes gross sales, without regard to refunds, fees, chargebacks, or other reductions.
Because a 1099-K is required to include gross sales, it will include amounts that are not deposited into your bank account, such as:
- Disputed charges
- Funds reserved
- Transactions that haven’t been deposited yet
A reconciliation between a 1099-K and your deposits / account balance can be requested here.
We recommend consulting with your tax advisor for additional information.
Please see this document for instructions.
Yes, WooCommerce Payments partners with Stripe to deliver tax details to eligible merchants.
Please see this document for instructions.
Please see this document for instructions on how to log into your Stripe Express account for WooCommerce Payments.
From there, you can update various details for your account, including your SSN, email address, home address, etc.For account updates on your 1099-K or additional assistance please reach out to the Stripe Express team. If you need assistance with WooCommerce or WooCommerce Payments, please create a ticket.
If you have questions for the Stripe Express team regarding your taxes or the process in general, reach out to the Stripe Express team. If you need assistance with WooCommerce or WooCommerce Payments, please create a ticket.
For those who have opted in to receive it, Stripe Express e-delivery is secure and compliant with IRS guidelines. This includes:
- Confirming recipient consent
- Providing an option to withdraw consent and receive a paper copy
- Making the form accessible via a secure login from February through October
WooCommerce Payments is built in partnership with Stripe, and utilizes Stripe for our 1099-K delivery. Stripe has identified a subset of transactions that were not included in the totals on your tax forms (box 1a, 5a-5l).
If you have not yet filed your tax return with the IRS, you will simply need to use the information on the updated 1099 for your tax filing.
If you have already filed your tax return with the IRS, you should review the updated 1099 tax form to determine if any changes are needed for your tax filing. Typically, changes to reported 1099 totals result in amendments to a filed tax return. This is especially true in cases where updated 1099 totals are considerably different than the original totals. We recommend that you consult your tax advisor for further guidance.
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