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8 Min. Read

Square 1099 Tax Form: Filing Requirements and Steps

Square 1099 Tax Form: Filing Requirements and Steps

There is a lot to balance when it comes to filing at the end of the tax year. This includes gross payments, relevant taxpayer information, and gross sales from goods are all taken into account. It’s equally as important to understand for both small businesses and independent contractors. 

Your Square 1099-K details the annual business income you received from Square. The 1099-K is a form used to track self-employed people’s earnings from credit cards and outside applications, like Square. Each freelancer and business owner who uses a payment processor’s platform and permits them to conduct business transactions must receive a 1099-K from the company.

If you are an independent contractor, you are probably also familiar with form 1099-NEC and with the one that it replaced, Form 1099-MISC. The 1099-NEC is the form used to report your self-employment income to the Internal Revenue Service (IRS). They report different types of paid income in various ways, which is the main difference. 

The two differences in the forms are:

  • Your income from third-party companies, such as debit cards, payment apps, credit cards, and other credit card processors is reported on Form 1099-K
  • Your income from electronic fund transfers, checks, cash, or direct deposits is reported on Form 1099-NEC

But what if you also receive checks from customers in addition to payments made through Square? Then, when you file your self-employment taxes, you might receive both types of forms.

So how do you know the correct information for reporting requirements for your 1099 tax form? Well, the good news is that we created this article to cover everything you need to know. Keep reading to learn all about Square 1099 tax form requirements and steps.

Table of Contents

Why Is the 1099 Tax Form Important?

How to File Your Square 1099-K Form

Square 1099-K Form Requirements 

How to Get Your 1099-K Form from Square

Key Takeaways

Frequently Asked Questions

Why Is the 1099 Tax Form Important?

Square must send Form 1099-K to anyone who uses their platform to process at least $600 in business transactions from 2022 onwards. The IRS will also receive the same form from them. The 1099-K functioned slightly differently prior to 2022. State-by-state requirements varied, but generally speaking, Square would only send the form to users who: 

  • Generated income from self-employment of more than $20,000
  • Had more than 200 transactions

When filing their taxes, individuals who are not eligible for a 1099-K must still disclose their Square income to the IRS. 

Uncertain of your Square earnings? Your Square Dashboard allows you to view all the information you need. Then, you can download your year-end sales report if you processed less than $600. 

Your gross sales for the transaction date(s) of those sales are used to determine the sum and the number of transactions on each form. This includes earnings from refunded credit card purchases. If taxes and tips were applied to a purchase using a credit card, the gross sales also include those amounts. 

The amount shown on the form may not match the amount that has been settled in your bank account. This is because cash sales are not included in the total you report on Form 1099-K. This is due to the possibility that you received refunds, chargebacks, or holds, and Square’s fees were deducted prior to the money being transferred to your bank.

The transaction date is the date that the transaction was recorded in the system, and it is based on Coordinated Universal Time (UTC). If you have transactions that happen after 4:00 p.m. or 5:00 p.m. (depending on daylight saving time) or after midnight in your local time zone, there may be slight differences on your online Square Dashboard because it displays your transactions in your local time.

Turn Tax Pains Into Tax Gains

How to File Your Square 1099-K Form

The good news is that filing your square 1099-K form is a very easy and straightforward process. On one hand, Square will submit the form directly to the IRS on your behalf if you earn over $600 in a calendar year. 

On the other hand, you will have the relevant information you need to submit your own taxes. In this case, the first step you should take is to determine your total income and the number of transactions you had. 

Next, you can make a list of all your eligible write-offs, which can also include Square fees. Some common write-offs include the likes of: 

  • The cost of your Square reader
  • Any relevant business or legal fees 
  • The cost of renting an office space 
  • A portion of both your phone bill and internet bill 
  • Laptop, computer, and other types of work equipment 
  • Business-related travel 
  • Business insurance 
  • Some types of business loan interest 
  • Professional training opportunities 
  • Some business meals

Now that you have that information in place, you can begin to fill out Schedule C. This form helps you determine what contributes to your taxable income, which is when you subtract your write-offs from your total income. The next step is to go through the process of figuring out how much you need to set aside for your tax purposes. 

It can also be worth your while to confirm whether or not you need to pay your taxes on a quarterly basis or only annually. If you want an easy-to-use option for all your accounting needs – including tax information – FreshBooks offers a fantastic solution for all your needs. You can easily track expenses, understand tax requirements, and reconcile your Square payments when you need to. 

Square 1099-K Form Requirements 

It is crucial that you update your Square account to correspond with IRS records. This helps to guarantee accurate tax reporting for you or your company and to avoid any potential IRS withholding. 

Directly from your online Square Dashboard, you can review or update your taxpayer identification information, business name, and any other business tax information you have given to Square.

If you happen to file your taxes using your legal business name or your EIN (Employer Identification Number), it’s important to confirm that your Square account has been updated with both of them to ensure everything is as accurate as possible.  

If not, your name and Social Identity Number will be displayed by default on your tax forms. In turn, you might have to wait longer for your refund if you’re getting one, which would delay the processing of your tax return.

How to Get Your 1099-K Form from Square

It can be common for companies to send your 1099-K form directly to you. However, in most cases, Square makes it easy to get from your online dashboard. This makes things easy since you can quickly access it when you need it and you don’t have to worry about it getting lost in the mail. 

Once you are logged in to your Square Dashboard, simply click on Accounts & Settings. From here, you just need to select “Business” and then choose “Tax Forms” from the dropdown menu that’s available. You should be able to see your 1099-K form once you’re inside that section of the dashboard. 

The forms are meant to be available before January 31. However, you can contact Square directly to get them to send it to you if you can’t seem to find it or it hasn’t been uploaded to your dashboard.

Save 40 Hours During Tax Season

Key Takeaways

In most cases, Square will submit your 1099-K form directly to the IRS at the end of the tax season. This is as long as you earned over $600, and it doesn’t matter how many transactions you incurred. As a business entity, it’s important to monitor and track everything from gross income to your sales summary, 

If you want to access your 1099-K form, you can simply log into your Square Dashboard. Everything you need for your tax reporting will be included inside the dashboard. If you can’t seem to find it, you can contact the Square support team for assistance.

FAQs on Square 1099 Tax Form

Does Square send you a 1099 form?

Sometimes Square will send you your 1099 form. However, in most cases, you can simply log into your Square Dashboard to be able to access it whenever you need it. 

Where do I find my 1099 on Square?

Simply log into your Square Dashboard and go into Accounts & Settings. Click on “Business” and then select “Tax Forms” from the dropdown menu. Now you should be able to find your 1099 form. 

Does Square send 1099 forms to contractors? 

At the end of the year, Square’s online payroll service takes the initiative to file Form 1099-NEC. It does these for each of your contractors. By going to Tax Forms in the Payroll section of your Dashboard, you can print these forms to give to your contractors.

Can I write off Square fees when I do my taxes? 

Yes, you can write off certain fees when you file your taxes. It’s worth taking the time to familiarize yourself with which fees are eligible to get deducted so your tax return is accurate.