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Julie here from Shopify Support.
This is a great question, and especially relevant given the fact that we're heading into tax time.
In the United States, if you process more than $20,000 and have more than 200 transactions, then you are required to submit a 1099-K form to the IRS. If you meet these requirements, then Shopify will automatically generate the 1099-K form and submit it to both you and the IRS. This can be found in Settings > Payment providers > Shopify Payments > View payouts > Documents. We also have a help doc on how you can access this report here.
Keep in mind that this only applies to gross sales generated through Shopify Payments; if you meet these requirements for orders processed via another payment gateway, then you'll just need to check in with your other payment providers to find out how you can obtain that form. I did, however, manage to find some information from PayPal regarding 1099-K forms and how they can be obtained. You can check that out here.
Aside from the 1099-K form, Shopify also gives you access to tax reports. The Sales finance report, for example, can help with your sales tax reporting and includes the values that you'll most likely need while filing your taxes, like gross and net sales generated during a specific timeframe. This report can be exported as a CSV file; if you're working with an accountant, it's a great idea to provide them with a copy of this report.
Ultimately, I recommend reaching out to PayPal directly if you are needing a 1099-K from them and they should be able to point you in the right direction. If you have any other specific questions on tax reporting, then my advice would be to reach out to a tax expert who is qualified to provide you with guidance on how to best proceed.
I hope this helps!
"Keep in mind that this only applies to gross sales generated through Shopify Payments; if you meet these requirements for orders processed via another payment gateway" From my calculations, it seems payments made via PayPal payments are also included on Shopifys 1099-k? I don't otherwise balance. I show Shopify payments matching what is under box 1a ... box 1b seems to include paypal payments, cash, gift cards etc? Because I balance only this way. My numbers also balance when I do my PayPal 1099-k... so to me it seems payments made via paypal are on both shopifys 1099-k and the paypal 1099-k. Shopifys 1099-k is entitled "Payment Card and Third Party Network Transactions" What am I missing please?
Because the 1099-k form from Shopify only reports gross transactions processed through Shopify Payments, PayPal transactions will not be included in this form. If you are wanting to review the raw data on how your 1099-k is calculated, you can do so by following these steps:
Available on). This is the date when the money actually changed hands from the customer's bank to your processing account and is the date Shopify uses for tax purposes. Once you have sorted your spreadsheet, delete any rows with an
Available ondate of either 2018 or 2020.
Type) and remove any rows with a
Typelisted as anything other than
Charge. This means you will be deleting any rows with a
Typeof Refund, Adjustment, Chargeback, etc.
Available ondate of 2019.
Amount) and this should correspond to the value you are seeing on your 1099-k.
This should help clear up any confusion you may have!
Hey, @mYsensoryTools. To clarify, Box 1b (card not present), is the first gross figure, minus any transactions where the card was physically present for the transaction, like POS sales, for example.
In other words, Box 1b refers to any transactions which were processed without physically inserting a credit card into a card reader. This would include both online sales or sales that were processed by manually entering the credit card number in the POS checkout.
If you have any further questions about this form, the IRS actually has a handy guide on understanding your 1099-k that I think you'll find pretty useful.
I hope this clears things up!