As a facilitator of electronic payments, we are required to report income received through Innago under IRS regulations. The current threshold as of the 2023 tax year for reporting is $20,000 in payments, from at least 200 deposits. Previously the IRS announced that they would lower this threshold to $600 from any number of deposits, but they decided not to move forward with this change. For tax year 2024, the IRS plans for a threshold of $5,000 to phase in reporting requirements. Please click here to see the official announcement from the IRS’ website.
For this reason, we strongly suggest that you accurately assign bank accounts to the correct business entity in Innago. If bank accounts are not assigned correctly, the 1099-K form may be inaccurate. If you have any concerns about the structure of your business entity (especially with multiple owners), whether you should report under an SSN or an EIN etc., it would be best to consult with an accountant or tax professional.
What is reported?
The 1099-K form is a gross income report. This means that any refunds, reversals, credits or any other relevant deductions will not be accounted for on the 1099-K. It will be best for you to consult with an accountant or a tax professional with any concerns about this to discuss what filing options you have available.
If you have any questions about this process, please feel free to reach out! Here is a link to the IRS website for more information as well: