Direct Checkout 1099-K

[Former_Member]

As Ben Franklin said, "The only things certain in life are death and taxes."

Many of you now know that Etsy will be providing 1099-K forms for direct checkout sellers who pass the tax reporting threshold (gross volume over $20,000 AND 200 payments). Thanks to all who provided their required information in their account.

If you are approaching this threshold, you'll see a note in your Shop Payment Account and will be prompted to provide your tax information. If you haven't seen this in your account, it's because you haven't neared the limit yet.

We've seen some questions about this process in the team and in the forums, so we thought it would be a good idea to open the floor to any questions you have about tax reporting. You may have questions that we won't be able to answer, but we'll do our best, or your fellow sellers may have a solution for you.

[OriginalsbyLauren]

I filled mine out a couple of weeks ago. Will I only get one if I reach the threshold, or will everyone that filled it out get one?

[CreativeJenV]

Just got mine email to notify me to add this info yesterday. Makes me happy as it means I'm making money.

[Former_Member]

Hey Lauren!

We will only be providing the 1099-K to sellers who reach and exceed the threshold for reporting.

[Jwhiz]

I'm wondering does the 1099K only apply to direct checkout sales or all sales? Last year I had to file a 1099K for Paypal because I met the requirements but not here on Etsy (the total combined money/sales was for two of my shops combined so I didn't meet them individually here on Etsy) so now that I'm doing direct checkout I'm approaching both the $20,000 and the 200 sales with just the one shop.

So my question is, if I reach the requirements with both Etsy and Paypal, and both parties send me a 1099K won't I be filing for the same sales twice?

[Former_Member]

So my question is, if I reach the requirements with both Etsy and Paypal, and both parties send me a 1099K won't I be filing for the same sales twice?

Both paypal and etsy would send a 1099 only for the payments processed through them. So your paypal 1099 would be the payments that were paid through paypal, and your etsy 1099 would be for the direct checkout payments.

[SerenaSmithLampwork]

right, it's not your total sales that matter. it is the amount processed by each payment processor.

so, as i understand it, for example if your shop has 200/20,000 total sales/$ but only 100/10,000 went through paypal, and 100/10,000 went through direct check out, then you wouldn't pass the threshold for either.

[Nothingbutstring]

Serena from SerenaSmithLampwork says

so, as i understand it, for example if your shop has 200/20,000 total sales/$ but only 100/10,000 went through paypal, and 100/10,000 went through direct check out, then you wouldn't pass the threshold for either.


Yes, this is correct. It's the amount of many that goes through each payment center, not your total sales on the site.

[HomespunFabric]

Nicole G - I was wondering if Etsy is aware of the new requirements that they are imposing on sellers in NYS for reporting sales that were received via debit/credit cards. This will effect DC since Etsy is required to issue 1099-K to those who meet the threshold for DC payments received.

[Former_Member]

I am really puzzled with all of the people that are concerned or worried about getting a 1099. We need to report the money we receive from sales here, no matter if we get a 1099 or not.

[CherishedBlessings]

Yes griffincat is right. We do need to pay our taxes. Hobby income is under $400/yr and if you make more than that it is NOT a hobby anymore.

[SerenaSmithLampwork]

any income can be taxed, even hobby income under $400, and even garage sale income. it's best to talk to your tax person or otherwise educate yourself about this issue because what you learn in the forums here is not always accurate.

[Jwhiz]

Thanks everyone that answered my question =) It helped me understand better.

[CherishedBlessings]

Here is the IRS self employment tax info. Anything over $400 a year has to be added as income http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employed-Individuals-Tax-Center

Hope this helps everyone!

[CherishedBlessings]

Here is the updated one http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Self-Employment-Tax-%28Social-Securit...

the other I posted was from 2010, but is still the same with regard to income over $400/yr.

[REMJewelryCreations]

Self employment tax is equivalent of social security/Medicare taxes for the self employed. That threshold is $400 before being subject to that tax. However, all income must be reported and is subject to income tax.