Dr. Friday explains why 1099-K reporting matters for people selling online or earning through apps. She warns that ignoring these forms can lead to IRS notices because the IRS receives the same information.
Transcript
G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.
Making sure that you are paying taxes on all the income you earn. 1099-K thresholds have gone up. So they originally planned for $600, then they went up to $5,000. $5,000 isn’t much in a year if you’re selling items on the internet or you’re doing a small business through the internet.
This is merchant fees. 1099-K is, if you’re an Uber driver, you get a 1099-K. If you don’t understand and you’re getting these forms, or you’re ignoring them thinking, well, no one knows about them, guess what? The IRS does.
I’ve had a number of people come in my office that have prepared their own taxes but did not report that. Guess what? They now are reporting it.
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