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The truth: Receiving a Form 1099-K doesn't automatically mean you'll owe income tax on the gross sales amount reported to you. You are taxed on your net income, but a 1099-K only shows your gross receipts.

As you can see, unlike the 1099-K form, the 1099-B form is much better for reporting capital asset transactions as it includes sections to report your proceeds, cost basis, realized gain or loss and even whether that was a short or long-term capital gain or loss.

The main difference is the types of payments they both report. Basically, the 1099-K covers all digital transactions that aren't ACH, EFT, or direct deposit. Those are covered by the 1099-NEC, which also covers payments by cash and check.

Form 1099-K is a report of payments you got during the year from: Credit, debit or stored value cards such as gift cards (payment cards) Payment apps or online marketplaces (third-party payment networks)

The 1099 form is used to report non-employment income to the Internal Revenue Service (IRS). Businesses are required to issue a 1099 form to a taxpayer (other than a corporation) who has received at least $600 or more in non-employment income during the tax year.

Using a 4056-T Form will get you transcripts of your tax returns within three days of the IRS receiving your request. A Tax Transcript is a report that gives you a breakdown of your previous years' tax returns.

In other words, Form 1099-MISC reports income from a particular business, regardless of the form of payment. Form 1099-K reports bank card income from all your customers and clients.