Discover the role of the 1099-K Form in tax reporting for businesses using Adyen's payment processing, and learn how this Form assists in your financial management.
In this guide, we’ll cover:
- Getting started
- 1099-K Form eligibility
- Preparing for the 1099-K Form
- Receiving and locating the 1099-K Form
The 1099-K Form is a summary of your account's sales activities, intended to help with tax reporting. It doesn't cover personal income, which must be reported separately. This Form is issued to the account holder and the IRS, as well as certain US states. Click here for more information about the 1099-K Form.
1099-K Form eligibility
In the majority of states, you qualify to receive the 1099-K Form if, during the previous calendar year, you met the following criteria:
- Generated over USD 20,000 in card payment processing volume.
Processed more than 200 card payments using Fresha's card processing solution.
- The 1099-K threshold is based on the total gross payment amount processed through Fresha, without factoring in fees, credits, refunds, shipping, cash equivalents, or discounts.
- The gross payment threshold required to receive a 1099-K Form varies by state. Click here to access the latest information on the eligibility criteria you need to meet.
Preparing for the 1099-K Form
If your account meets the above criteria, meaning you are eligible to receive a 1099-K form, make sure the billing details in your Fresha account are correct and your tax number is valid. This is important for the form to reflect the correct details and to guarantee it is mailed to the correct address.
Receiving and locating the 1099-K Form
Fresha's payment service provider, Adyen, will submit the 1099-K Form to the IRS by March 31st, on your behalf. Additionally, a physical copy of the Form will be mailed to you around February 1st, and an electronic copy will be sent to your email for your records.
You will also be able to download the 1099-K Form electronically from your Fresha account by February 1st, following these simple steps:
- Head to Business Settings.
- Click on Billing details and invoices.
- Select the 1099-K tax Form.
- Locate the relevant year and click on the Download button to access the form.
- After downloading, you can also print it.
NOTE: To correct or update any information on your 1099-K Form, open your business wallet, select Bank accounts, then Edit and proceed to Edit account holder details. Follow all of the steps through to add the updated information. Once submitted, you'll need to wait for your details to be approved before the changes will be reflected.
Q. What is the main purpose of the 1099-K Form?
The 1099-K Form is designed to assist in tax reporting. It summarizes your account's sales activity but does not include personal income.
Q. How do I know if I am eligible for a 1099-K Form from Adyen?
You are eligible if your account made over $20,000 USD in card payments and processed more than 200 card payments in the previous year using Fresha's card processing solution. The threshold may be different in certain states so we recommend checking the IRS's website to see if you meet to criteria to receive the 1099-K form.
Q. What should I do if the information on my 1099-K form is incorrect?
If the information on your 1099-K is incorrect, you can easily update the account holder details by heading to your Wallet, selecting Bank accounts and then clicking on Edit next to the relevant entity to make the relevant changes. In case you wish to update your bank account details, while in the Wallet page, click on the 3 dots next to the relevant bank account. Any updates should be be completed before January of every year for the form to reflect the correct details and to guarantee it is mailed to the correct address.
Q. Where does the physical 1099-K form gets sent to?
The 1099-K form will be sent to the address entered when you created your entity so make sure this is up to date at all times. You can update the information by heading to Wallet, selecting Bank accounts and then clicking on Edit next to the relevant entity to update the account holder details.
Q. Can I still get my 1099-K Form after I deleted my account?
If you need access to your 1099-K Form after your account has been deleted, reach out to Fresha through the contact us form, using Taxes as the reason for contacting and providing full details of your request. We'll assist you further with retrieving the 1099-K Form.
Q. What should I do if I meet the criteria to receive a 1099-K Form?
If your Fresha account is eligible to receive a 1099-K form, make sure the billing details in your Fresha account are correct and your tax number is valid every January. This is important for the form to reflect the correct details and to guarantee it is mailed to the correct address.
Q. What should I do if I do not meet the criteria to receive a 1099-K Form?
If you do not meet the criteria to receive a 1099-K form, you can use the Sales log detail report which will provide you with a detailed breakdown of each sale you've raised within your Fresha account.
Q. Who will provide the 1099-K Form if I use a third-party payment processor?
If you use a third-party payment processor, they are responsible for providing your 1099-K Form. Fresha's card processor, Adyen, will not be responsible for issuing you a 1099-K Form.
Q. Do I need to report personal income on the 1099-K Form?
No, personal income is not included in the 1099-K Form and should be reported separately.
Q. Why does my 1099-K form show a high amount processed after I just took over the business?
The 1099-K form is issued based on the entity's sales over the past year, regardless of the current owner. The amount reported is for the entity itself, not dependent on who owns the account.
Q. Why does my 1099-K report a lower amount than what I actually processed?
The amount reported on your 1099-K form is associated with the entity used for the location during the period of the report. Therefore. if you change entity halfway through the year it will switch and start reporting the amount from the new entity.
Q. How can I access the 1099-K form for the previous year(s)?
The 1099-K form for the previous year(s), should already be available in your Fresha account and can be accessed by heading to Business Settings and selecting Billing details and invoices.