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Video instructions and help with filling out and completing Form 1099-K
Hello everyone today's video discussion is going to be on the matter of the format 1099 - K now as I'm providing you with information I will likely refer to my notes from time to time now what is the form 1099 K the form 1099 - K was introduced by the IRS for tax year 2021 the form is used for the reporting requirements for payment settlement entities PSPs now what or who is a payment settlement entity a PSE a payment settlement entity is either a merchant acquiring entity for a payment card transaction or it is a third party settlement organization examples of a merchant acquiring entity is either a bank American Express MasterCard Visa etc acceptance of third party settlement organizations is either PayPal Amazon or similar companies now on the form 1099 K payments are broken down monthly my suggestion would be to compare the amounts reported on the 1099 K with your settlement statements that you receive monthly just to be sure that what is reported on the 1099 K is accurate note that the IRS will get a copy of the 1099 K so they will know what is reported by the PSE and it's up to you to make sure that the PSE has not overly reported payments made to you now the type of information that's reported on the 1099 K is all payments made in settlement of payment card transactions and that's for the merchant acquiring entities and for the third-party settlement organizations it's a little bit tricky here so for the third-party settlement organizations payments instead iment are reported if gross payments to a participating payee exceed $20,000 and there are more than 200 transactions with the participating payee again let me repeat that third party settlement organizations report payments on the 1099 K in growth payments exceed twenty thousand dollars and there are more than 20 not 20 more than 200 transactions with that participating payee you can find more information regarding the third-party organizations again which are PayPal Amazon and other organizations that are similar you can find this information on the IRS website by going to WWII rsg now in regards to the 299 k the IRS has generated under reporting letters and these under reporting letters are in the event that you report something different on your tax return then what the PS e reported to the IRS currently there are four different types of letters there's the fifty thirty five five zero three five bears the 50:36 bears the fifty 39 and the 50:43 the letter 503 five fifty 35 that is a soft notice basically if you received that the IRS is informing you of something usually no action needs to be taken regarding this notice unless the IRS specifically state that a specific action needs to be taken as for the 50 36 if you receive this notice you need to return or review your return for accuracy and it's possible.