is 1099-K same as 1099-NEC?

[SabrinaD2]

No, 1099-K and 1099-NEC are not the same. Here are the key differences and why some might mistakenly use them interchangeably:

• 1099-K: Used to report payments from third-party network transactions, such as credit card payments and payments through services like PayPal
  1. . It's commonly issued by companies like eBay and other online marketplaces
• 1099-NEC: Used to report non-employee compensation, such as payments to independent contractors and freelancers

Why Some Might Use Them Interchangeably:

• Confusion Over Income Reporting: Both forms report income, but from different sources. People might confuse them if they receive payments through third-party networks and also work as independent contractors
• Similar Thresholds: Both forms have reporting thresholds that can lead to confusion. For example, the 1099-K threshold is $600 for third-party payments while the 1099-NEC threshold is $600 for non-employee compensation

For more detailed information, you can refer to these sources:

• TurboTax Blog on 1099 Forms
• Accounting Insights on 1099-K vs 1099-NEC