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"So the 1099-k is on the schedule C so I should not add that also well in the 1099-k space in the software?"
It depends on why the taxpayer got a 1099-k form. A 1099-K is for Funds flowing to the taxpayer through a Payment Settlement Entity (processing payments, like VISA or Venmo or Uber). It is an informational reporting because the number of transactions and/or the amount of the funds hit the reporting threshold. Is it Sales? Is it sales and sales taxes? Is it Rent collections?
If your client, for example, sold one or two expensive musical instruments using PayPal, then PayPal would issue a 1099-K if this hit $20k or more. That doesn't tell you that the taxpayer is in the business of selling instruments. The taxpayer tells you that the taxpayer is in business. The 1099-K doesn't tell you their business income; just what amount settled through that entity. The taxpayer's recordkeeping is used to fill in their tax form. The 1099-K is a confirmation, that the IRS will expect to see something from your taxpayer to explain why this movement of funds has been reported. Example: Your taxpayer is an Uber driver. The taxpayer needs to give you all their business information. The 1099-Kis not the only reference you will want to use.
Start with this help article:
Don't yell at us; we're volunteers
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1098 = mortgage interest = Sch A (or, possibly E, F or even OIH)
1099-K is for income, and is informational. Any amounts shown 'should' already be in the income figures on Sch C, E (maybe?) F (maybe?)
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Thank you so much for your response. So the 1099-k is on the schedule C so I should not add that also well in the 1099-k space in the software? 1098 is in the Sch A but where box is in the software looks off. I was used to another software so maybe I need to get used to where things are in this one.
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"So the 1099-k is on the schedule C so I should not add that also well in the 1099-k space in the software?"
It depends on why the taxpayer got a 1099-k form. A 1099-K is for Funds flowing to the taxpayer through a Payment Settlement Entity (processing payments, like VISA or Venmo or Uber). It is an informational reporting because the number of transactions and/or the amount of the funds hit the reporting threshold. Is it Sales? Is it sales and sales taxes? Is it Rent collections?
If your client, for example, sold one or two expensive musical instruments using PayPal, then PayPal would issue a 1099-K if this hit $20k or more. That doesn't tell you that the taxpayer is in the business of selling instruments. The taxpayer tells you that the taxpayer is in business. The 1099-K doesn't tell you their business income; just what amount settled through that entity. The taxpayer's recordkeeping is used to fill in their tax form. The 1099-K is a confirmation, that the IRS will expect to see something from your taxpayer to explain why this movement of funds has been reported. Example: Your taxpayer is an Uber driver. The taxpayer needs to give you all their business information. The 1099-Kis not the only reference you will want to use.
Start with this help article:
Don't yell at us; we're volunteers
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Thank you much for this! This is very helpful thank you bunches!