How To File 1099-K On TurboTax? A Step-By-Step Process

Whenever the tax season comes, it is obvious that you’ll need some planning and organization. And this holds extra importance for those who are self-employed. You’ll not only have to track your business expenses but also have to track streams of income from various clients.

This is where the 1099-K comes into play. It helps track payments you have received via a payment settlement entity (PSE). And this includes tracking all the payments which are done through:

Credit cards
PayPal, Venmo, or other online payment services
Freelancing platforms such as Upwork can help manage your client payments.

Form 1099-K displays the transaction value the PSE has issued for the last year for you. Furthermore, you can still receive a Form 1099-K even when you’re not self-employed or run a small business. So, this raises concerns regarding how to file the 1099-K on TurboTax if you have received Form 1099-k. Moreover, if you are not a business owner, you want to know how to report a 1099-k.

You’ll find the process of filing the 1099-K properly in this post. And we will also answer the question you may have about 1099-k.

Table of Contents

Understanding What Is A Form 1099-K

Before we jump into the filing process, it is crucial we understand what exactly Form 1099-k is. Also known as IRS Form 1099-k, it is a form that is issued through the 3rd party payment processors. And it is issued to users who regularly receive payments.

Some examples of them are as follows:

Peer-to-peer payment platforms such as Venmo and PayPal.
Real estate marketplaces such as VRBO and AirBnB.
Ticket resale exchanges such as SeatGeek, StubHub, etc.
Online marketplaces such as Facebook Marketplace and eBay.
Automobile crowdsourcing platforms such as Turo and Uber.

Before 2023, the threshold for reporting such transactions was having 200+ transactions or the number of transactions reaching above $20,000.

For the tax year 2023, these companies must send forms to users who’ve received transactions above $600 in their third-party payment platforms. For this, the company has to consider a single tax year across varying transactions. Furthermore, these companies must send a copy to the state taxing authority and IRS, close to where the user lives. So, in general, you and the tax authorities will both have copies.

When Does Someone Usually Receive Form 1099-K?

If you’re an individual taxpayer, you’ll receive important forms a few months before the taxes are due every year during the tax filing deadlines, normally around April 15th. You’ll receive all the necessary forms through your mail or the notifications in the apps you use to receive or send money.

Form 1099-K is part of these essential forms you’ll usually receive by January 31st.

What Is The Use Of The 1099-K Form?

Before looking at what the 1099-K form is used for, it’s important to know who can receive it. You can get a Form 1099-K if you receive an amount greater than the threshold mentioned in reportable payments for services or goods via a 3rd party payment network. If this happens, your payments must be reported on the 1099-K form by the company that is processing these payments.

Some examples of payments that are included as a result of:

Real estate rentals
Business (freelance, self-employed, independent contractor, gig work)
Personal item sales or rentals
Hobby sales

Now talking about the use of the 1099-K form, it provides a record of reportable payment transactions offered by a third-party payment network or payment card and has the following uses:

Helps alert the state taxing authorities and IRS of possible reportable income
Helps businesses and people reconcile payments processed with the records

Who Needs To File For A Form 1099-K?

Filing a 1099-K Form with the payment recipient and the IRS is the payment service responsibility, such as PayPal, Visa, and Venmo. Suppose you don’t get a form, but you think that you have received payment more than the threshold amount. In that case, you need to go to your account dashboard to confirm whether it has been issued to you or not.

There are some companies that don’t send such forms through the mail. Hence, ensure you check your account messages in all the payment accounts so you know that you haven’t missed anything.

Steps To File 1099-K Received As Self-Employment Income Using TurboTax Online

There are several steps you can follow to file a 1099-k on TurboTax. You can write down the income reported on Form 1099-K. In addition, you can add any received checks or cash. However, remember to enter this as self-employment income by going to Schedule C.

Here are the steps for how to file the 1099-k on TurboTax as self-employment income:

First, continue or open your return and click the “Search” option.

Then, look for “Schedule C” and tap the “Jump to schedule c” button.

After that, answer the questions related to your business until the “Here’s your info” screen appears.

Next, click on the “Add income for this work” tab.
- In case you are returning to Schedule C, tap the “Review” or “Edit” button, which you’ll find next to work. Once you’re there, answer all the questions about your business.

Now, a screen on your system will appear stating, “Let’s enter the income for your work.”

When that screen appears, tap the “Other self-employed income” option and hit “Continue.”

A screen with “Tell us about other self-employed income for your work” text will appear.

On that screen, type in your 1099-K information.

Finally, tap “Continue” when the process is over.

If you’re typing in the income from a 1099-K, don’t forget that it only reports the gross amount of your transactions. So, it will not include adjustments for fees, credits, discounts, or refunds. However, you can type self-employment expenses in another part of the return.

Steps To Report A 1099-K If You Are Not A Business Owner [TurboTax Online And Desktop]

Form 1099-K is sent to individuals who have received more than $600 in their third-party payment platforms. Before, it was sent to anyone with 200+ transactions and above $20,000 payment processed for services and goods from all third-party payment services, like PayPal and payment card transactions.

You have to report all the income which you have earned to the IRS. If you are not a hobbyist or a business owner, make sure to use the following steps to enter the 1099-K:

Firstly, sign in to your TurboTax account and open your return.
Then, click on the “Search” button and type in 1099-k.
After that, select the “Jump to 1099-k” tab.
Next, tap on the “Yes” option, which you’ll find on the screen “Did you get a 1099-K?”
Now, select “Personal item sales,” “Hobby,” “Personal Property Rental,” or “Other.”
Finish the action by clicking on the “Continue” button.
Finally, enter your 1099-K info.

If you’re a TurboTax Online user, check the box that is under 1a. Also, type in the amount exempt from taxation, including personal items you have sold due to suffering a loss, reimbursements, and gifts.

However, if you’re using TurboTax Desktop:

If you have chosen “Personal Property Rental” or “Hobby Income,” there is nothing else you need to do.
In case you have chosen “Personal item sales,” you need to select if all the things were sold at a loss or only a few items were sold at a loss. And, if there are only some items, you need to enter the gain amount.
If you have chosen the “Other” option, a summary screen will appear on your system.

Conclusion

So this is how you file 1099-K on TurboTax, especially if you are self-employed. If you haven’t received your 1099-k form yet, and you have passed the threshold, make sure to check your payment accounts to confirm if there is any notification regarding it. Not every company will send you mail, so it is up to you to check these payment accounts.

If you find any error while filing the 1099-K on your TurboTax software, contact MWJ Consultancy. We offer TurboTax support services where we resolve all your errors and queries regarding the software. And we offer support for all plans, whether basic, deluxe, premier, or self-employed. To get proper support for your software, call us at +1 877 469 0298 or send your query to info@mwjconsultancy.com. You can also drop your specific requirements on our contact us page.