I received my 1099-K, for the 2022 tax year, from a marketplace where I sell my digital product. They are a Third Party Network. They take 12% of all the payments I receive through them.
In the field on my 1099-K where it says “1a Gross amount of payment card/third party network transactions”, the amount they have there is the same amount of money I received to my bank account after they took their 12% (which would not be the gross amount, to my understanding). Shouldn’t the amount in that field be the 100% of the payments, before they took their 12%?
That was the case for 2021’s 1099-K from them, it was the gross of the 100%, before they took their cut, then I just listed the 12% marketplace fee as a deduction on my return for 2021.
2021’s 1099-K had the gross amount before they took their 12% for that year, in that field. 2022’s 1099-K had the amount after they took their 12% for that year, in that field. So my question is, which is correct...cause they both can’t be, right?
Thank you for any help you can offer,
Aaron
You are correct, the payer is required to report gross payment card and third-party network transaction amounts to the IRS. See this IRS FAQ for more information.
Contact the payer regarding any issues with your Form 1099-K. If you confirm that they reported the net instead of the gross, and they won't issue a corrected form, you can report the amount shown on the Form 1099-K; then, report the fees separately as other income not reported on a form and take a deduction for the fees paid. That way, your income reported from a Form 1099-K will match what was reported to the IRS so that their matching system doesn't show a discrepancy.