For tax year 2023 returns: The IRS has implemented a new transition rule that delays reporting threshold changes. Your client may still receive 1099-Ks for transactions under the new, lower thresholds but they may not need to be separately stated in the tax return. Click here for more info.
Reporting Form 1099-K transactions separately isn't required, but the client may receive an IRS notice if the gross receipts don't reflect amounts from the 1099-K.
To avoid this, be sure to include amounts from Form 1099-K when calculating gross receipts or sales.
To enter a 1099-K on a 1040:
- Go to the Input Return tab.
- From the left of the screen, select Income.
- Select the appropriate income screen (such as Business Income (Sch C), Rental and Royalty Income (Sch E), or Farm Income (Sch F, 4835).
- From the top of the screen, select Income Statement.
- Enter amounts from Form 1099-K in the applicable income section.
If your client received a 1099-K for nontaxable amounts:
- On the left-side menu, select Income.
- Click on the SS Benefits, Alimony, Misc. Income screen.
- Scroll down to the Form 1099-K (Reporting of Nontaxable Amounts) section.
- Enter the amount in the applicable field.
