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How do I avoid double reporting income from Venmo and Square?
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Hi wichman3, thanks for posting the question.
For the same transaction, you should receive only one 1099-K for the gross amount.
A payment settlement entity (PSE) which submits the instructions to transfer funds to your account is the entity issuing the 1099K.
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Multiple PSEs - If two or more persons qualify as PSEs for the same reportable transaction, the PSE that submits the instruction to transfer funds must file the return.
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Page 3 of
https://www.irs.gov/pub/irs-pdf/i1099k.pdf
By worst case, if you receive two 1099Ks for the same transaction, you have to ask for correction. Or keep great books and records, so you can justify adjustment on your income tax return.
Hope the above helps.
So, to clarify: If I make $1200 for the year and $600 is Venmo and $600 is Square, how do I report the income? Is there a method to report $1200 in income and qualify that part was from 3rd party pay systems. I don't want to get into a situation where I report $1200 in income and then report the income from Venmo and Square, in essence double reporting the income and paying taxes on the money twice.
You would report gross income of $1,200 for the year. Source document happens to be 2 1099Ks, one from Venmo, one from Square. There is no double reporting.
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