1099-K Application to Business Return Line 1a Gross Receipts or Sales

[Tax Explorer]

Hi,

I have a restaurant client with 1099-Ks from credit card processing companies and delivery companies such as Uber Eats, Doordash, etc. The 1099-Ks given out include sales along with processing fees, shipping fees, commissions, etc. For the client's business return, does the Line 1a Gross receipts or sales need to match the 1099-K amounts or is it ok if Line 1a just reports the gross sales?

Is there any publications from the IRS on this?

[IRonMaN]

Nobody ever pays by cash or check?

[Just-Lisa-Now-]

Are you saying the 1099K shows MORE than the total on their receipts?   

When I order from a restaurant my receipt shows a total at the bottom that includes all fees, that total at the bottom of the receipt would be the gross income.

[Tax Explorer]

I'm saying the 1099-K includes sales as well as other fees that a payment settlement entity (PSE) charges (ex. processing fees, commissions, delivery fees, etc.) to customers. The fees from the PSE are not considered sales to the restaurant since they are fees that the PSE itself collects upon a sale using its platform.

My question is if the Line 1a Gross receipts or sales need to match the 1099-K amounts (which consists of sales and other PSE charges) or is it ok if Line 1a just reports the gross sales from the restaurant?

[Tax Explorer]

There's not that many that pay by cash or check for the restaurant.

[Tax Explorer]

There's not that many that pay by cash or check for the restaurant.

[IRonMaN · Accepted solution]

Not that many pay by cash, or they don’t always report the sales?

Report gross revenues based on the total charges and report the fees deducted as expenses.

[Tax Explorer]

Ok, sounds good. Thanks!