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Level 4
posted Jan 24, 2023 12:34:58 PM

When customers pay through direct deposit, do you have to file a 1099-nec?

If you have some customers that wire money into your business bank account, can you just total those deposits up and add it to your gross receipts total? or are you required to do something else, like file a 1099-sec? I hope it is as simple as keeping up with it yourself, but I read something that made me question whether or not that is good enough.

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1 Best answer
Expert Alumni
Jan 24, 2023 12:59:08 PM

You do not file a 1099 form for customers who made purchases through electronic payments.  

 

However, if you use payment processors such as Venmo, PayPal, or Cash App, you may receive a 1099-K from these processors.  The 1099-K will list all transactions of payments received.  

 

Here is a link for additional information on 1099-Ks:

 

Form 1099-K

 

@danielle-51

2 Replies
Level 15
Jan 24, 2023 12:48:38 PM

You never issue a 1099 for payments that you receive.

 

You are expected to report all your income and expenses on your schedule C using your own accurate and reliable business records, even if some of your customers don't issue tax forms.  In Turbotax, after you set up your business and add any income from 1099s, you can add a lump sum amount for "income received not on a 1099". 

Expert Alumni
Jan 24, 2023 12:59:08 PM

You do not file a 1099 form for customers who made purchases through electronic payments.  

 

However, if you use payment processors such as Venmo, PayPal, or Cash App, you may receive a 1099-K from these processors.  The 1099-K will list all transactions of payments received.  

 

Here is a link for additional information on 1099-Ks:

 

Form 1099-K

 

@danielle-51