Why didn't Shopify inform owners about the delayed 1099k's?

Allonsyfiberart
Tourist
5 0 15

I would like to know why Shopify did not email any of the shop owners that they would not have the 1099k's until the end of February? I spent an hour running through their AI suggestions then finally got a person only to find out that Shopify was well aware that 1099k's were not available yet. I have been very happy with most of Shopify since I joined in 2018. But I find this very worrisome that big information like this was not immediately emailed out to us. I see in the forums many people asking about the 1099k's. 

 

Shopify, you owe us an email with the info and why this is happening.

Replies 12 (12)

Trevor
Community Moderator
3404 463 989

@Allonsyfiberart 

 

Thanks for raising this. I've assisted other members on this topic in this thread. You do not need the 1099k form to file your taxes, however, i understand that having this form would alleviate some stress during a very stressful season. I've copied the information I've provided in that thread below. 

 

If you would like to replicate the exact calculation of the 1099-K, to confirm the amounts which would have been reported if you qualified, these are the steps you would follow:

1. Log into your Shopify admin Go to Finances → Payouts → Transactions.

2. Then, export your transactions by date. Make sure to set your date range to about 10 days either side of 2023, to make sure you don't miss anything.

3. Open the file and sort the sheet on column H (`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.

4. Once you have sorted your spreadsheet, delete any rows with an `Available on` date of either 2022 or 2024.

5. Next, sort your spreadsheet by column B (`Type`) and remove any rows with a `Type` listed as anything other than `Charge`. This means you will be deleting any rows with a `Type` of Refund, Adjustment, Chargeback, etc. this is done because the 1099-K only reports _gross_ processing which is determined by the value of the charges alone.

6. Check that the spreadsheet only contains transactions with a `Type` listed as `Charge` and an `Available on` date of 2023.

7. The final step is to calculate the sum of column I (`Amount`). This will correspond to the value which would have been reported on your 1099-K if you had qualified. The number of rows in the export (minus the heading row) will show you the number of transactions.

 

Merchants who use Shop Pay Instalments (SPI) may not be able to reconcile using this manual method. This is because the 1099-K form excludes “interest-bearing” transactions  through Shop Pay Instalments (SPI), whereas the transactions export does not exclude them. This is because the general transaction export should have these transactions included. It's only for 1099-K reporting that they should be excluded.

 

The form is submitted on your behalf by Shopify, so any changes that need to be made can be backdated to the date of the request.

 

You are not responsible for submitting your 1099-K formYou do not need to wait for the information to be updated on your 1099-K form to file your taxes. 

 

You can file your taxes without the 1099-K form using the data in your Shopify reports to fill out your tax forms. Any corrections Shopify makes to the 1099-K form can be backdated to the correct date your information changes. 

 

Trevor | Community Moderator @ Shopify
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Allonsyfiberart
Tourist
5 0 15

Though I appreciate your trying to help me in this matter, I think you missed the point. The point is that Shopify should have notified all the shop owners about this. We pay a fee to have this service that includes getting us our 1099k's that we are supposed to, by law, have in hand by January 31st. The fact that Shopify filed an extension to have that be  the end of February  - this information SHOULD HAVE BEEN SENT TO ALL SHOP OWNERS.

 

So now we have to do extra work for not receiving the 1099k's. That information should have gone out to us as well. It still should as I am sure more businesses are trying to figure this out.

 

To be honest it makes me concerned and uncomfortable about professionalism on Shopify's part.

Allonsyfiberart
Tourist
5 0 15

If the information is in the Shopify reports then why would I spend all the time it would take adding up the column of transactions?

Trevor
Community Moderator
3404 463 989

If you've received one in the past, then you can export it from the transaction page 

 

  1. Go to Shopify Finances → Payouts → Transactions.
  2. Click on the option to export ‘1099-K transactions’.
  3. Export from Jan 1 - Dec 31 for the tax year you're concerned about, to see if the total of column I (Amount) is over the threshold. 

Otherwise, some manual work will be required to get the information you need. 

Trevor | Community Moderator @ Shopify
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Allonsyfiberart
Tourist
5 0 15

again - if this information is in reports, then why would I need to print out every single transaction? What is the purpose of that? 

BinkyBunny
Tourist
3 0 1

THIS WAS MEANT FOR TREVOR:  (sorry replied to wrong person and can't delete)

You said "That said, anyone who is eligible for a 1099k form will by default, receive an extension when we file (and get approved) for our extension."  

 

Do  you know if that is an extension to file ONLY? Or is payment (without penalties) also extended (or at least penalties waived if the payment is not right)?  Normal file extension don't free you from figuring out your taxes and paying on time.  Some people assume you don't have to pay - you still have to pay ON TIME what you "estimate" you owe so you can avoid penalties and late fees---- and if you don't get it right -- you pay those hefty IRS fees WHEN you file later. 

Trevor
Community Moderator
3404 463 989

I understand and I appreciate you surfacing that point. I'm not sure of the complexity it would take to proactively send out communication while we compile who is eligible for 1099k forms, however, I have passed this along to our Tax team. The more communication the better in cases like these. 

 

That said, anyone who is eligible for a 1099k form will by default, receive an extension when we file (and get approved) for our extension. While you wait for the form to be generated, you are able to compile the information you need using the above mentioned steps. 

Trevor | Community Moderator @ Shopify
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Allonsyfiberart
Tourist
5 0 15

I receive other notifications from Shopify. It can be simplified by sending a general letter saying if you normally expect and receive a 1099k then this applies to you. It is not necessary to make extra work for yourself in trying to just send to 1099k people. 

Trevor
Community Moderator
3404 463 989

I understand. There is always room for improvement in our processes and something I have passed up the chain so we can make this a better experience for you and everyone else. 

Trevor | Community Moderator @ Shopify
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 - Was your question answered? Mark it as an Accepted Solution
 - To learn more visit the Shopify Help Center or the Shopify Blog

BinkyBunny
Tourist
3 0 1

I think the issue is that last year, some states like California were able to file AND PAY (WITHOUT PENALTY) their Taxes in October.  It was not only an extension to file, but an extension to pay as well. But this year....that is not the case.  So if anyone tries to go through the process manually, pays for an accountant to check it out as well -- then that's an extra cost of time and money.  Then IF by chance it is wrong -- it will take a long while to get a refund or be penalized for not paying enough -- both very hard on small business.   So while U.S. companies/sole props can always get an extension to file only, (no extension for paying taxes) then that really does not help at all.  This really is unfair for the IRS to allow a large company an extension like this without allowing all the customers an extension to PAY without penalties (not just file).  If Amazon and PayPal can get these 1099's then people will also expect this from Shopify.  This really cannot go on year after year. VERY unfair U.S. businesses.  I hope that this will be resolved soon and that this will be the last year of these kinds of delays.  No one wants to get stuck in an IRS mess if things are not exactly correct.  IRS will penalize you even for a $100.00 difference - interest late fees They don't mess around!  It's nerve-wracking.  Please don't put your customers through this. 

MudandHoneyCF
Excursionist
27 0 50

Yes!! Why can’t Shopify get it together if much larger companies can?!

MudandHoneyCF
Excursionist
27 0 50

The main question here is why in the hell does Shopify need an extension?! If I can go in and just export the transactions to get my total then why does it take them two months to issue them?!