1099-K matching is not nearly as rigorous as 1099-MISC matching, and this question has been asked and answered a number of times with regard to 1099-MISC. In that case, if the income on one 1099-MISC is earned partially by each spouse, then two separate 1099-MISC entry forms should be set up, each with the appropriate spouse attribution at the top of the form (the box for "Spouse's 1099-MISC" should either be checked or not). Then below, on each (under Box 7 in most cases) indicate which Sch C to report the income on for each, and the amount to allocate. The sum of the two 1099-MISC entry forms should exactly equal the amount on the form received. SO, with that said, it is not unusual for husband and wife to use the same credit card processor (or merchant bank). This avoids doubling of fees. Turbo Tax doesn't even ask for information from your 1099-K, it simply informs you that you should be sure and account for all of it on your return. With that said, make sure to include all income reported on 1099-K that is taxable on the appropriate spouse's Schedule C as non-1099 MISC income
(some may not be taxable for various reasons, and again, the IRS is not doing an exact match as they do with 1099-MISC)
. I have not heard of anyone being audited for under-reporting 1099-K income where the bulk of the income on the form was reported and spread between both spouse's Schedule C's The IRS is way behind in following up on 1099-K discrepancies. There is talk that we might be seeing some automated 1099-K matching notices soon as they were dinged last year in an internal audit for not making sufficient use of this data. Still, even if the system spits one of these out, it will be easy to respond by showing where all the income was reported, on which Schedule C. This answer assumes you aren't trying to hide any of the income.
