A 1099-K is a tax form that payment app providers, such as Venmo and PayPal, and platforms like GlossGenius are required to report and share with customers who meet certain transaction thresholds in a given calendar year. Only business owners and independent contractors will receive a 1099. Employees (whether full or part time) will receive a W-2 from their employer.

Business owners and independent contractors will only receive a 1099 if they had at least 200 transactions that totaled or exceeded $20,000 in 2023. While the IRS had announced a new $600 threshold for 1099-K reporting, they revised that decision in November 2023, so the original reporting threshold is staying the same.

The first thing you should do is look over all of the information on your form(s) to make sure it’s accurate – especially the dollar amount you processed in sales in 2023. Check these numbers against your own books and records to make sure they match.

If your 1099-K form has the wrong information, reach out to the payment processor that issued your form (e.g. GlossGenius) and they will send a corrected form.

If all of your information is correct, you’ll need to adjust the profits and expenses on your 1099-K form to include cash transactions, tips, discounts, refunds, etc., and any tax deductions you have on eligible expenses (e.g. supplies, inventory, uniforms, etc.).

Your 1099-K does not have any adjustments included, so every number on your 1099-K will be “gross,” meaning it is the original price the client was charged. On your return, you’ll need to adjust your gross payments for any tips, discounts, refunds, or fees. 

By reporting these adjustments, you’ll only pay income tax on what you actually made, rather than the total amount you received.

Bookkeeping is tracking all money coming in and all money going out of your business. Any sales or purchases you make – whether they’re for services rendered or products purchased by clients, as well as any legitimate purchases you make for the business – should be accounted for.

You can choose any bookkeeping tool you like, but GlossGenius makes bookkeeping easy: Since all of your bookings and payments are included, GlossGenius Reports automatically pull all of your relevant transaction information into clear, organized reports that you can access in just a few taps.

If you have been using GlossGenius for bookkeeping all year, provide your tax accountant with your 1099-K and the following reports from GlossGenius: Sales, Retail Sales, Inventory, Transaction Detail, Expenses.

Depending on the laws in your state around sales tax, you may wish to share your sales tax report for 2023 as well. If you want to go above and beyond, share all of your 2023 reports with your tax accountant.

As a business owner, you want to set your team up for success come tax time. If you have full- or part-time employees, verify that they’ve received their W-2s before the January 31 deadline.

For contractors, like commission stylists or renters, confirm that they’ve received their 1099-K through any/all of the payment processing tools they’ve used.

With GlossGenius Gold, you can also share additional business reports that can help your staff adjust their forms and file their taxes correctly, like Commission Reports.