IRS SECTION - What is included on the Form 1099-K?
Whether you own a business, are self-employed, work in the gig economy or are selling personal items, Form 1099-K includes the gross amount of all payment transactions. You may receive a Form 1099-K from each payment settlement entity from which you received payments in settlement of reportable payment transactions. A reportable payment transaction is defined as a payment card transaction or a third-party network transaction. A third party network transactions may include a payment through a payment app.
Payment card transaction means any transaction in which a payment card, or any account number or other identifying data associated with a payment card, is accepted as payment. Third party network transaction means any transaction that is settled through a third-party payment network, but only after the total amount of such transactions exceeds the minimum reporting thresholds.
The gross amount of a reportable payment does not include any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts. The dollar amount of each transaction is determined on the date of the transaction.
“Total gross volume” is a calculation of the total of all charges you processed through Stripe for the year, including:
Stripe processing and conversion fees
These additional fees, refunds, and adjustments are not deducted from your total charges when calculating your gross volume and reporting to the IRS.
How should I report my income to the IRS.
Take your 1099k and add any cash, checks, or other deposits to that total. Deduct all expenses including but not limited to discounts, fees, refunds, etc. The remaining amount is what you received in income.
How should I handle independent contractors (drivers) that deliver food for my business?
You must file a 1099-NEC for any contractor you have paid over $600 in the calendar year.
If you are using DriverPay through stripe those funds do not come from you they are transmitted directly from the DL Master Stripe account to the Driver account. Therefore Stripe will file a 1099-NEC for DL to any driver who received more than $600 in Auto Pay payments during the calendar year.
If a driver was paid more than $600 through auto pay and directly by your business they would receive two 1099-NEC.