1099-K Tax Forms and Tax Season Overview [US Sellers]

[Helen]

We want to make sure you are prepared for tax season in the US and that you have everything you need from Square to file your return. Let’s get started. 

This post was updated in January 2024.

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Note: In March 2021, Congress modified the requirements for reporting transactions by lowering the minimum reporting threshold. However, the IRS has delayed the implementation of the Form 1099-K lower threshold for 2023 transactions. To learn more, visit the IRS website.

Understanding Form 1099-K

 

What is a Form 1099-K?

The IRS requires Payment Settlement Entities (PSEs), such as Square, to report the payment volume received by U.S. account holders. A Form 1099-K is the information return that is given to the IRS for qualifying customers.

Read this IRS fact sheet for more frequently asked questions about Form 1099-K. 

Do I qualify for a Form 1099-K?

Square will provide a Form 1099-K for you if you meet the criteria in the table below. 

Tax Year	Year Form Available	Federal Reporting Threshold
2023	2024	More than $20,000 gross sales from goods or services AND more than 200 transactions in the calendar year.

How do I download my Form 1099-K?

If you qualify for a Form 1099-K you'll see a link to download your Form 1099-K on the Tax Forms tab of your Square Dashboard:

1. Sign in to your online Square Dashboard.
2. Navigate to Settings > select Account & Settings. 
3. Click Business information > then click Tax forms.

Forms will be available by January 31st, 2024.

Where can I view my fees?

Learn how to view your fees from your online Square Dashboard. 

If you don't qualify for a Form 1099-K, you can calculate your year-end sales report (including fee information) from the Sales Summary tab of your Square Dashboard. Your tax professional may need this information to complete your tax forms. 

Form 1099-K and Tax Season FAQs

When will my Form 1099-K be available?

Forms will be available to download from your Square Dashboard by January 31st, 2024.

What if I have multiple Square accounts?

Our reporting threshold is based on the aggregate gross sales volume processed on all accounts that use the same EIN or SSN. If you have multiple accounts that use the same SSN or EIN, we will aggregate volume for all accounts and issue a 1099-K if you meet the threshold.

How do I update my tax reporting information or add an EIN to my account?

You can review and update your taxpayer information (legal name and EIN) from your online Square Dashboard — sign in from a web browser at squareup.com/login. Learn how to update your Form 1099-K for a prior year.

How do I get an EIN? 

An Employer Identification Number (EIN) is a federal tax identification number used by the IRS to identify your business for tax purposes. You can apply for an EIN online on irs.gov. Learn more about how to get an EIN.

What is a TIN? 

A taxpayer identification number is an identification number used by the IRS for tax purposes. A TIN is typically an SSN (for individuals) or it can be an EIN (for businesses). Visit Square’s Support Center for the steps to update your taxpayer identification number. 

Corrected forms: Can I receive a blank/0 1099-K form?

Square cannot issue a Form 1099-K with a zero dollar amount. A corrected form can be used to inform the IRS that the amount originally reported under the previous TIN should be updated and associated with the new TIN. Square will file the corrected form with the IRS during our next filing cycle, which occurs 3-4 times a year. Contact the IRS to work directly with them to ensure the businesses’ sales are not reported under the previous TIN.

What is ‘Block, Inc.’? 

In 2021 Square announced it was changing its name to Block. Your Form 1099-K will list ‘Block, Inc. f/k/a Square, Inc.’ as the FILER. The name ‘Block, Inc.’ will also appear under the PSE’s (Payment Settlement Entity) name and telephone number.

Are cash sales included in the reporting threshold?

Cash sales are not included in the total we report on the Form 1099-K.

I use the Cash App for my business, will I receive a 1099-K?

If you have the Cash App for Business and meet the reporting threshold you will receive a 1099-K. To learn more about Cash for Business tax reporting and the Form 1099-K read: Tax Reporting with Cash For Business. 

Additional Resources

• Square Tax Reporting and Form 1099-K Overview - Square Support Center
• Form 1099-K Tax Reporting Information - Square Support Center
• Update Form 1099-K - Square Support Center
• Understanding Your Form 1099-K - IRS Website

Photo by freestocks on Unsplash.

Disclaimer: This article is for information purposes and does not constitute legal, financial, or tax advice. We are not tax professionals. For specific advice applicable to your business, please contact a tax professional. This post was updated in January 2024.

[Wagzilla]

Hi everyone, 

Quick question. Is there a reason why my sales report for the year 2018 says one number, and then my 1099-K says a completely different number? Which number do I go with? Please advise. There is over a $10,000 difference. What gives? 

[VanKalkerFarms]

your 1099-k is all the transactions that were processed on credit cards BEFORE refunds.  It will match the left column of the "Card" row on this report.  https://squareup.com/dashboard/sales/reports/sales-summary

[Wagzilla]

Thank you, are the "other" transactions checks then? I see cash, card, and then a mysterious other. 

[VanKalkerFarms]

other is checks and any other gift certificates or PayPal payments etc that you accepted and choose other at the time of the transaction.

[Y8]

PayPal and personal checks

[GOCoffee]

I know this is an old thread, but I ran across it looking for something, and thought I'd check my own data. You state that the 1099K should match the card row in the sales summary report. I hadn't caught it before, but I now see that the card row and my 1099K for 2020 were actually off by about $125 - the 1099K being the higher number. The delta doesn't seem to match any returns, refunds, comps or discount amounts. Any thoughts about what that might that difference be attributed to?

[Frida]

Hello @GOCoffee,

Great to see you posting again, welcome back! 😁

I wanted to include some information that may attribute to the discrepancy you are seeing in reporting.

Let's talk about refunds for a moment:

Refund Reporting
Because of this requirement, the amount shown on this form will be different from the amount settled into your bank account. This is because you may have had refunds, chargebacks, or holds, and Square’s fees were deducted before funds were transferred to your bank.

Another thing to consider is the timing of transactions processed.

Transaction Timing
The transaction date is the date in our system that the transaction took place, which is based on a standardized time known as UTC. Your online dashboard shows your transactions in your local time, so there may be small variances if you have transactions that occur between 5:00 pm and midnight in your local time zone.

Lastly, I wanted to include this  article with video that explains what data pulls into reporting.

Let me know if this helps clear some info up! 😁

[GOCoffee]

Thanks @Frida for the information. I can understand there being a small difference based on all of that.

[BeyondBarriers]

My 1099-K is made out to my personal name and SSN not my business Name and EIN. How do I get this corrected? Everything in square is correct with my business information. 

[Joe]

Hi there, @BeyondBarriers 👋 Thanks for reaching out to us here on the Seller Community!

Here is a helpful guide to walk you through what to do if you are needing a 1099-K edited. If you have trouble, feel free to reach out to our Support Team directly at any time!

[SpectrumCE]

Should my Square 1099-K also reflect refunded transactions?  If so the 1099-K I received does not. 

[AshleyK]

Hey @hudsonbabylon! We do not have a verification letter for tax reporting, but you can work with a tax professional to get this information. If you received a 1099-k, it will be under Account & Settings > Tax Forms on your Square Dashboard, but you will have to meet the credit card sales requirements as well as the credit card transaction requirement. If you only met one, we would not have issued a 1099-K and you will need to work with a tax professional again to obtain one. 

[hudsonbabylon]

I met the requirements but Square says I didn't and did not issue 1099. What should I do?

($39,000 IN SALES AND 274 transactions)

[isabelle · Accepted solution]

Hey @SpectrumCE and @hudsonbabylon!

The amount and transaction count on each form are calculated based on your gross sales on the transaction date of the sales. This includes revenue from card payments that were refunded. Please note that gross sales include taxes and tips collected on a sale if they are charged on the card.

If you're still confused by your eligibility or totals, please remember that cash sales are not included in the total we report on the Form 1099-K. Because of this requirement, the amount shown on this form will be different from the amount settled into your bank account. This is because you may have had refunds, chargebacks or holds, and Square’s fees were deducted before funds were transferred to your bank.

If you were not eligible or didn't receive a 1099k from Square - we suggest reaching out to a tax professional. 

[hudsonbabylon]

Also I thought I met criteria for number of transaction according to requirement

[WOTW]

We did a test of the square before every show and now that amount is showing up on my 1099K.  How do I get these removed from the 1099K.  I can't get the dashboard to print out the forms like they did after each show.

[JJ_]

At this time Square is required to file a 1099-K for the Gross Amount of Card Transactions. This means that the form amount cannot be adjusted if these "tests before events" were done with a credit or debit card.

You may have to discuss this case with a Tax professional in case you would like a different 1099-K to be filed.

[JJStorage]

We keep interring our EIN and the system rejects it.  It's the same number we've filed with our taxes fir seven years.

[nika]

Hi @JJStorage- Make sure that your business name and address is also being entered exactly as the IRS has it. Here are some additional tips when entering your info.

[bridgettay]

No.  I want to know how to edit "set up taxes" under getting started.  I need to delete a company under getting started.  How do I do these things?