I'm going to tell you something that might surprise you. I didn't really understand how the 1099-K worked until last year.
And I do this for a living.
So if you've been nodding along in conversations about 1099-Ks while quietly having no idea what anyone's talking about, welcome. You're in good company. You're in my company.
Here's what I finally sat down and learned, and I'm going to explain it the way I wish someone had explained it to me.
The 1099-K covers payment card and third-party network transactions. PayPal, Venmo, Stripe, your credit card processor. When money moves through those channels, somebody has to report it to the IRS. That somebody is the payment processor. Not you.
Let me say that louder. Your property management firm will never file a 1099-K. Not once. Not ever. You don't create it, you don't send it, you don't hand a copy to anyone. The processor files it and sends it straight to the vendor.
Your only job with card payments is to leave them OUT of your 1099-NEC and 1099-MISC totals. That's the whole job. Exclude them.
Here's why this matters so much. If you put a card payment on a 1099-NEC, and the processor also reports that same payment on a 1099-K, the IRS sees the same money twice. The vendor's income just doubled on paper. Now their CPA has to prove the money got reported twice. You turned a simple payment into somebody else's tax problem, and that somebody is a vendor you probably want to keep working with.
Think of it like buying groceries. When you pay with your personal credit card at the store, you don't send the grocery store a tax form. The card processor handles the reporting behind the scenes. Same idea here. You're the buyer. The processor does the paperwork. You stay out of it.
The threshold part is what made this confusing for everybody, me included. For payment apps like PayPal and Venmo, the reporting threshold went back to $20,000 AND 200 transactions. There was a whole saga about dropping it to $600. It didn't stick. The law changed, then it changed back, and if you blinked you missed it.
So here's my point in telling you all this. Tax law moves. It moved under my feet while I was busy doing the actual work, and I had to sit down and learn it properly like everybody else. If that can happen to me, it can happen to anyone, and there is zero shame in it.
That's exactly why I built the Year-End Close Sprint. Not to make you feel behind. To catch you up, cleanly, before January does it for you.
Come learn the stuff I had to learn. We'll do it together, and we'll do it before the deadline.
The Year-End Close Sprint is a four-week, hands-on learning experience for property management teams getting their 1099 work right. Six recorded lessons, live Q&A, up to three team members. Choose your cohort.
By Tina T. Meeks, SCOREE Services LLC