Using Keap Payments does not necessarily affect your taxes. Keap Payments helps you organize your payments and under certain circumstances will issue you Form 1099-K, a requirement from the IRS. This will be sent from our payments partner WePay.
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What is Form 1099-K and what does it contain?
Form 1099-K is the IRS’s information return for reporting the movement of funds. It reflects the gross dollar amount that you collected in the previous calendar year. In addition, the IRS 1099-K form should reflect your legal name and Taxpayer Identification Number (TIN). It is up to you (and your tax professional) to determine whether these amounts represent taxable income.
When will Keap Payments send me the form?
If you collect at least $20,000 and have at least 200 transactions in the calendar year, Keap Payments will send you the 1099-K form by January 31 of the following year. All payment processors are required to issue the 1099-K form by law. Keap Payments is also required to file a corresponding tax form with the IRS, which participates in a combined filing program with many state tax agencies.
We are a business or non-profit. Do these thresholds apply to us as well?
Yes, these thresholds apply to all US-based businesses including non-profits and other tax-exempt entities. However, the 1099-K form will be sent with the name and Taxpayer Identification Number (TIN) of your business or non-profit, rather than the Keap Payments account’s administrator’s legal name and social security number.
In other words, if you are an administrator of an Keap Payments account for a business or non-profit, you will not take on any tax liability on behalf of the business or non-profit under your own social security number.
Are refunds and fees included in the $20,000?
The $20,000 threshold does not account for refunds or fees. Gross payment volume is determined by the amount of money your customers originally paid.
How should I use the information from the 1099-K form?
It is up to you (and a tax professional) to determine whether your proceeds represent taxable income. Keap Payments will not report the funds that you collected as earned income. The 1099-K form is simply intended to track the movement of funds.
I am not a US citizen or a permanent resident. Will I get the 1099-K form from Keap Payments?
Yes, if you meet the requirements of at least $20,000 collected and at least 200 transactions in a calendar year you will receive the 1099-K form.