When Linda Spinale launched Honeycomb Bookkeeping in 2021, she set out to provide two things: exceptional service to a handful of clients, and a better work-life balance for herself.

What she didn’t anticipate was how quickly her firm would grow. Within just four months, she hired her first employee, and soon, she was leading a fast-growing team. To maintain the high level of service her clients had come to expect, Linda knew she needed systems that could scale with them. That’s when she heard about Keeper.

Implementing Systems for Growth

Initially hesitant about adopting an entirely new platform right before the busy season, Linda was won over by Keeper’s Prepare 1099s Report. She found that it eliminated a notoriously painful part of the bookkeeping workflow by automatically excluding credit card spend from 1099 payments. But what started as a solution for 1099 season quickly evolved into a complete practice management overhaul.
With Keeper, the Honeycomb Bookkeeping team could now:

• Track team progress in real-time, ensuring tasks were completed consistently without micromanagement.
• Automate reporting and analytics, providing clients with tailored insights beyond standard financial statements.
• Standardize onboarding, allowing for immediate client integration that makes way for efficient scaling.

A 30% Time Savings Per Client

With Keeper in place, Linda’s team saved approximately 30% of their time per client. This efficiency gain translated into significant firm-wide growth—Honeycomb Bookkeeping added three new bookkeepers and over 50 clients in just 18 months.

[Keeper] has transformed our firm into what I feel is a truly legitimate business... My bookkeepers can handle more, and I feel very strongly that Keeper has allowed us to become the firm that we are.

Curious to see what Keeper can do for your practice? Book a personalized demo today.

The post How Honeycomb Bookkeeping's Team Reclaims 30% of Their Time Each Month with Keeper appeared first on Keeper.

Ever get stuck waiting on missing receipts or scrambling to reconcile uncategorized transactions at month’s end? Most accounting professionals have been there, juggling multiple apps, and sending clients endless follow-up emails. But what if a single, integrated tool could streamline every stage of your monthly close—from task management to real-time collaboration with clients?

In a recent Earmark Expo, Andy from Keeper demonstrated how one cloud-based practice management platform can tackle the monthly close in a streamlined, client-friendly way.

1. Streamlined Task and Project Management

A smooth month-end close starts with effective planning. Instead of juggling spreadsheets or generic project tools, Keeper lets you create recurring monthly tasks alongside ad-hoc projects (e.g., onboarding, payroll processing, sales tax). You can:

• Set Custom Frequencies: Weekly, bi-weekly, monthly, or quarterly tasks with specific due dates.
• Create Checklists & SOPs: Store all the instructions, links, and passwords your team needs.
• View Firm-Wide Progress: A central dashboard shows each client’s close status, from pre-close tasks to account reconciliations.

From an owner’s perspective, this holistic view helps ensure junior staff follow standardized procedures. No more scattered checklists; everything is tracked and auditable in one place.

2. Intelligent Review: Direct Ledger Integration

Keeper integrates with QuickBooks Online or Xero, analyzing the general ledger for anomalies and inconsistencies. It flags potential issues, such as:

• Vendors with Inconsistent Categories: If a vendor was previously coded to “Software " but ended up in “Advertising " this month, the system notifies you.
• Missing Payees or Transactions: Instantly spot missing or incomplete vendor info.
• Auto-Added Bank Rules: Verify that automated rules are accurate, reducing errors.

Changes can be made from Keeper itself—no toggling between platforms. When you recode a transaction or add a vendor, it updates QuickBooks or Xero in real-time. This ensures everyone from the bookkeeper to the reviewer is working with up-to-date financials.

3. Consolidated Client Communication

If you dread sending 40 emails to a single client each month, modern platforms offer a better way. Keeper consolidates client questions—uncategorized expenses, missing statements, etc.—into a single, branded portal. When you’re ready, you notify the client.

“Rather than sending the client 40 messages throughout the month, we wait until all our questions are ready and then let them know they have new items,” explained Andy from Keeper.

Clients click a magic link—no password needed—and land in a portal with your firm’s branding. There, they see only the transactions or questions that need attention. They can respond by typing an explanation or uploading documents. Communication remains organized with a clear audit trail, so your team can finalize the books faster.

4. Proactive W-9 Collection & 1099 Prep

The year-end 1099 season can be a scramble when you haven’t collected W-9s in advance. Keeper automates the process by:

• Tracking Thresholds: Once a vendor exceeds $600 of reportable spend, the system flags them.
• Sending Branded W-9 Requests: Vendors get a link to fill out or upload their W-9 electronically.
• Syncing Data: Submitted forms are attached to the vendor record in QuickBooks Online (or Xero).

By converting 1099 tracking into a recurring monthly task, you can avoid the January rush of incomplete or missing vendor details. Firms can even export data directly to a 1099-filing solution, turning W-9 collection into a year-round routine.

5. Receipt Management on Your Client's Terms

Receipts are one of the most common pain points in bookkeeping. Keeper’s receipt capture tools offer multiple ways for clients to submit documents:

• Dedicated Phone Number for Texting: Clients can snap a picture and text it directly.
• Magic Link Portal: They drag and drop files from a desktop or mobile device.
• Email Upload: Optionally forward digital receipts to a dedicated inbox.

Once in the system, OCR technology extracts key data and either creates new transactions or matches receipts to existing ones. This eliminates redundant steps like re-keying or reconciling bank feed entries separately.

6. Additional Features: Time Tracking, KPIs, and More

Beyond communication and transaction reviews, Keeper offers tools to centralize your entire CAS practice:

• Time Tracking & Budgeting: Set budgets per client or project. Track time with built-in timers.
• Advanced Reporting & KPIs: Customize monthly financial reports with real-time variance analysis, graphs, and even non-financial metrics (e.g., headcount).
• Inter-Company Transfers: For multi-entity clients, Keeper can sync due-to/due-from accounts across different QuickBooks or Xero files.

The result is a single source of truth for all monthly close tasks, collaboration, and data oversight.

A New Era of Month-End Efficiency

Platforms like Keeper reimagine not just client communication but the entire month-end process—reducing the back-and-forth between email threads, spreadsheets, and accounting files. From automated anomaly detection to text-based receipt collection, these solutions let accountants focus on higher-value advisory work.

Ready to streamline your month-end and client collaboration? Watch the complete Earmark Expo session featuring Keeper. You can also earn continuing professional education (CPE) credit for learning how integrated software simplifies your workflow—giving you time back to serve your clients at a higher level.

The post Earmark Expo - Keeper: Transforming Client Communication in Accounting appeared first on Keeper.

When Tyler Otto set out to grow his accounting firm, he quickly realized that managing day-to-day operations was a bottleneck in and of itself. Without a clear system for organizing tasks and workflows, his team relied heavily on him to stay on track—a challenge that only grew as his client list expanded. He knew his firm needed structure and efficiency to scale.

As an early customer of Keeper, Tyler could see that this tool had the potential to revolutionize his operations, starting with tracking his clients’ month-end close progress. Keeper’s task management tools provided the structure his team needed to take ownership of their work, freeing him to focus on bigger-picture goals. By viewing tasks across all clients in one place, his team could easily identify snags and ensure no deadlines slipped through the cracks.

One standout item for Tyler’s firm was Keeper’s 1099 management capabilities. Keeper simplified W-9 collection by allowing the team to send vendor requests with a single click, turning what used to be a tedious process into an automated routine. This efficiency not only saved time but also demonstrated added value to clients, showing that Tyler’s firm was proactively taking work off their plates each time they paid a new vendor.

Another key differentiator for Tyler is Keeper’s commitment to its users. Whether through responsive support, active user communities, or transparent product roadmaps, Keeper’s focus on customer collaboration made a significant impact. Tyler also appreciated Keeper’s client-based pricing model, which allowed his firm to scale without the burden of increasing software costs.

We can actually see what [features are] coming up, weigh in, vote on it… it makes it so much easier for us to feel like we have a sense of ownership of the product.

Today, Tyler’s firm has grown into a 17-person team with systems in place that foster efficiency, collaboration, and growth. Keeper played a pivotal role in helping Tyler achieve the structure and scalability he needed to turn the vision for his practice into reality.

Curious to see what Keeper can do for your practice? Book a personalized demo today.

The post Tyler Otto Streamlines Operations and Scales His Firm with Keeper appeared first on Keeper.

[Keeper] is worth it for that one feature.

Nancy McClelland, also known as The Dancing Accountant, runs a hyper-local bookkeeping and tax firm in Chicago. Before getting started with Keeper, Nancy noticed that her senior accountant, Kendra, was juggling critical accounting responsibilities while simultaneously supervising the junior bookkeepers. Nancy sought out a solution that could ease Kendra’s workload without compromising the quality and efficiency of the firm’s operations, and she landed on Keeper.

In comparison to other practice management apps on the market, what struck Nancy most was Keeper’s ability to automate those month-end reviews that consumed so much of Kendra’s time. Additionally, tasks that previously fell to the supervisors were delegated to the junior staff with ease, thanks to Keeper’s task management features paired with the intuitive dashboard.

That dashboard also allowed for Kendra to have a clear, at-a-glance view of each team member’s progress on their assigned tasks. Keeper even flagged when someone was “stuck” somewhere in the month-end close process. This new system saved Nancy’s whole team tons of time, simply because they no longer had to engage in endless check-ins and back-and-forthing about who was doing what. Everyone was equipped with an increased awareness of the tasks at hand.

Nancy also highlighted one of Keeper’s standout features: automatic 1099 tracking and W-9 collection. “It is worth it for that one feature,” she said, noting that some of her colleagues initially added the entirety of their client base solely for this functionality. But for Nancy’s firm, Keeper’s use cases went far beyond the 1099 season. Features both large and small were being consistently implemented at a pace that made sense for her team—thanks to the expertise of Keeper’s support reps.

Today, Keeper helps Nancy’s firm operate more efficiently, allowing her team to continue delivering exceptional services to clients. Plus, her 1099 seasons are no longer headache-inducing.

You can find Nancy McClelland, CPA’s award-winning blog at thedancingaccountant.com, and be sure to check out Ask a CPA, which is a community for bookkeepers looking to enhance their accounting skills and increase collaboration with their clients’ CPAs and tax preparers.

Curious to see how Keeper can solve the capacity constraints at your firm? Book a personalized demo today.

The post How Keeper Helps Nancy McClelland, CPA Solve Capacity Constraints appeared first on Keeper.

In 2019, Cheryl Lanahan put her entrepreneurial spirit to the test when she started PlumbBooks. Specializing in accounting and bookkeeping services for residential home service companies, Cheryl’s vision stemmed from her time working at a plumbing company. She realized the need for a specialized bookkeeping practice catering to the trades industry.

The post How PlumbBooks saves 30 minutes per client per month with Keeper appeared first on Keeper.

• Accountants must familiarize themselves with the distinctions between and purposes of forms 1099-NEC, 1099-MISC, and W-9, in addition to other rotational players like the 1099-K, 1099-DIV, 1099-INT, 1099-R, and 1099-B.
• Instead of stressing every tax season, learn how to make 1099s part of your year-round workflows in 2024 with Keeper. 

Can’t remember if you collected a W-9 for that contractor your client added during their busy season last year.

Missing contact information for a 1099 vendor because it was in an unusual account?

Wasting time you don’t have (April 15 always sneaks up!) triple-checking your various spreadsheets against QuickBooks?

Working with — and as — bookkeepers and accounts, the Keeper team has seen and experienced it all. 

If you’re ready to do things a little differently in 2024, this guide will help you nail down everything you need to know about 1099 and W-9 forms and how to manage them flawlessly to eliminate the exhausting tax season sprint. 🏃

The Fundamentals of 1099 and W-9 Forms

First up, let’s get on the same page with 1099 forms.  

1099s act as a signal flare to the IRS. It’s an information return — aka, a method for reporting payments made for almost any non-employee income. There are 1099s for contractors and freelancers, rent and royalties, interest and dividends, stock sales and patronage, and even credit card settlements. 

The components of 1099s consist of:

• Company name
• Company address
• Payer’s taxpayer identification number (TIN)
• Recipient’s TIN
• Employee’s compensation

Here, we’ll discuss two of the most common 1099 forms,1099-NEC and 1099-MISC. Catch the FAQ section at the end of this article for a rundown on a handful of other types that professional bookkeepers and business owners should know about. 

Form 1099-NEC

Back in 2020, the IRS reintroduced Form 1099-NEC: Nonemployee Compensation. The form was created to separate out, as the name reveals, non-employee compensation (how considerate of them).

A 1099-NEC is needed if:

• Services (not goods) were provided by a non-employee, including independent contractors, freelancers, and attorneys 
• Payment of $600 or more was made in a calendar year
• Entity is an LLC, partnership, or sole proprietorship (non-corporation)

Method of payment was made via check, cash, ACH, Zelle, or wire transfer — this excludes any merchant services or payment settlement entities (e.g., credit and debit, Venmo, PayPal Business)

Form 1099-MISC

While Form 1099-NEC is used to report independent contractor income, Form 1099-MISC: Miscellaneous Income is used to report other income, such as: rent, royalties, awards and prizes, attorney settlements, etc.

As a general rule, a 1099-MISC should be issued for payments of at least $600 made in the course of trade or business. You do not need to issue a 1099 for payments made for personal purposes.

In addition, Form 1099-MISC is used for payments of $5,000 or more for direct sales of consumer goods (box 7), although receiving these payments can also be reported as a checkmark in box 2 of Form 1099-NEC.

For a full breakdown on how to use these forms in 2024, check out the IRS’ instructions. 

Recognizing the correct form to use in each financial scenario is a testament to a bookkeeper's or accountant's expertise. By ensuring the proper documentation of income through the appropriate 1099 forms, you’re not only maintaining compliance but also providing an invaluable service to your clients, positioning you as an indispensable asset in their financial management.

Form W-9: Collecting Information for 1099s

After verifying who needs a 1099, it’s important that each vendor or independent contractor fill out a W-9. It’s always best practice to request a completed W-9 form before payment is exchanged. 

IRS Form W-9 is used to request the correct TIN (reminder, that’s taxpayer identification number) and verify the entity type from a vendor, company, or individual when non-employee income was or will be paid during the calendar year.

Keeper’s Prepare 1099s report will help verify which of your vendors or independent contractors already have a W-9 on file, and which still need one. Intrigued? Book a demo now or keep reading for more information on how Keeper can empower you to streamline the most annoying, repetitive steps of the 1099 process.

To stay abreast on any updates to Form W-9, check out the IRS’ informational page here. 

Who Sends and Receives 1099s?

It's the payer's responsibility to issue 1099 forms, and the recipient's to use them for their tax filings. 

As a bookkeeper or accountant, you may find yourself on either end of this transaction, orchestrating the smooth execution of these forms — whether you're preparing them for a client's contractors or recording them for an individual's tax return. 

Filing Due Dates and Deadlines for 1099-NEC & MISC

When a form 1099-NEC or MISC is required, there are five different copies that must be included:

• Submit Copy A to the IRS. This copy along with Form 1096 reports all 1099 forms issued to contractors, along with the total dollar amount of payments. 
• Send Copy 1 to your state tax department 
• Send Copy B to the recipient (the person paid) 
• Send Copy 2 to the recipient
• Keep Copy C for recordkeeping 

Timeliness is as crucial as accuracy. The IRS has set clear deadlines for when 1099s must be in the hands of the recipients and when they must be filed with the IRS. 

Business owners have to compile all 1099-NEC forms and send the accompanying 1096 (mail or e-file) to the IRS by January 31st. 

In the past, you had the option to prepare 1099s manually and make a visit to the post office. However, beginning in 2024, if you plan on filing 10 or more 1099s, you are required to do so electronically. 

Failure to meet the 1099 filing deadline can lead to federal penalties that cost hundreds of dollars, which can grow into thousands over time. It's important to file as soon as possible, even if the deadline is missed, to minimize potential fines.

How to File 1099s Online

File quickly using online portals like Track1099 or Tax1099. 

The IRS also has a newer e-file program called Information Returns Intake System (IRIS). You will need a Transmitter Control Code (TCC) to use IRIS, which can take up to 45 days to receive.

Manage 1099s Year-Round and Stop the Crunch with Keeper  

In the intricate world of 1099 forms, Keeper emerges as a powerful ally for bookkeepers and accountants. 

Keeper is a month-end close manager that syncs directly to QuickBooks and Xero. Thousands of bookkeepers and accountants use Keeper to manage multiple clients, automate client communication, catch and correct coding errors, track KPIs, generate stunning reports, and handle their teams’ tasks — all in one centralized tool. 

With Keeper’s Prepare 1099s report, you can get everything ready for filing in a timely and efficient manner. See it in action here.

Instead of waiting until the last minute, with Keeper you can build 1099s directly into your monthly workflows to help with: 

• Finding out which of your clients’ vendors need 1099s, every month instead of once a year
• Tracking vendors with missing W-9s
• Requesting W-9s from your client or their vendor through our whitelabel-ready Client Portal
• Exporting the report as a CSV file to use in your 1099 filing tool of choice, or straight to  Track1099 or Tax1099

Want to learn more about Keeper and how we can help fix your 1099 process? Click here to schedule a demo. In a hurry? Sign up to get started for free in seconds.

Answering Your 1099 and W-9 FAQs

What else is there to know about 1099s and W-9s? Here, we’ll answer some of the top questions we get, as well as cover a few specific quirks of 1099 filing. 

What is a 1099?

A 1099 form is a tax document used to report various types of income received from sources other than a traditional employer. This could include payments from individuals, businesses, or other entities like the government. The paying entity issues 1099s. When an individual receives a 1099, it indicates they have received income which they must include on their tax return.

What other types of 1099 forms should I know about?

Each 1099 form corresponds to a specific type of income or transaction. As financial stewards, accounting partners must recognize and understand the distinctions among them. Here's a breakdown of the most common 1099 forms you'll encounter beyond 1099-NEC and 1099-MISC. 

Form 1099-K: Payment Card and Third Party Network Transactions

With everyone swiping cards and using apps like Venmo, PayPal, and Zelle (to name a few), it's good to know about Form 1099-K. 

Form 1099-K is used for payments made via a payment settlement entity. Think of any credit card, payment card, or third-party network transaction. 

If payments are made or received in this manner, Form 1099-K will be provided for the total transaction amount. 

Historically, the issuance of this form was contingent upon individuals exceeding 200 transactions or accumulating transactions exceeding $20,000. The IRS is planning to eventually revise that threshold downward to $600. The first step in this change is expected to be a new threshold of $5,000 for tax year 2024. At the time of this writing, the IRS is still gathering feedback and has not officially committed to either of these lower thresholds. 

This change marks one of the biggest tax law shakeups in a while. Modifications to the 1099 filing requirements should significantly increase the volume of forms businesses are required to issue and maintain. As a result, more companies may be looking to engage accountants to navigate these changes — and more accounts may be looking to engage bookkeeping practice management software to handle a whole new level of 1099/W-9 administration and vendor communication.  

For the latest news on 1099-Ks, stay tuned to this page from the IRS.  

1099-DIV: Dividends and Distributions 

If your client took money out of their business that was not a W-2 or loan repayment, this form might be applicable. Dividends issued to a shareholder of a C-Corp in the past calendar year may require Form 1099-DIV.

Learn more about 1099-DIV here. 

1099-INT: Interest Income 

Form 1099-INT is a record that a person or entity paid you interest during the tax year. This form is essential for anyone who lent you or your client’s business money, and interest of at least $10 was paid out in the past calendar year. It’s important to note that this form is not for accrued interest; rather it’s only for payouts of interest in cash or trade. 

Find the latest on 1099-INT here. 

1099-R: Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. 

Form 1099-R is used to report distributions from retirement plans, which can include pensions, annuities, retirement or profit-sharing plans, IRAs, and insurance contracts. It’s a vital form for clients in their golden years or those who are planning for retirement.

The IRS covers all the ins and outs of 1099-Rs here. 

1099-B: Proceeds From Broker and Barter Exchange Transactions

For clients who engage in the sale of stocks, bonds, and other securities, Form 1099-B reports the proceeds from brokered or bartered transactions. It’s essential for calculating capital gains or losses during tax filing.

Find the latest version of 1099-B and related resources here.

What is a W-9?

A W-9 form, provided by the IRS, is used to request the correct taxpayer identification number (TIN) and verify the entity type from a vendor, company, and individual when non-employee income was or will be paid during the calendar year.

What’s the difference between a W-2 and a 1099?

At a high level, the main difference between a W-2 and a 1099 is who receives them. Businesses issue W-2s to employees, and they issue 1099-NEC forms to independent contractors.

Should I issue a 1099?

If the details above left you a little confused, we’re happy to break it down for businesses and individuals who are simply looking for information on whether or not they should file. This helpful quiz from our friends at Hill Bookkeeping & Consulting will guide you through easily determining if you should file a 1099.

Who doesn’t receive a Form 1099-NEC or 1099-MISC?

Generally, 1099s do not need to be issued to corporations (C-Corp and S-Corp), or LLCs formed as corporations. However there are a few exceptions, such as: medical and health care payments, gross proceeds paid to an attorney, substitute payments in lieu of dividends, or tax-exempt entities that require a 1099-MISC form. You can check out the exhaustive list set out by the IRS. 

Under IRS updates made in 2022, if you compensate a contractor through platforms like PayPal, Venmo, Stripe, or by using a credit card, you are generally exempt from issuing a 1099 form for them.

Do you have to submit a 1099 for business expenses paid on a personal credit card?

You do not have to issue a 1099 for anything paid on any credit card. Whether it's charged on a personal or business credit card is irrelevant, as the merchant services provider will send a 1099-K to the recipient for all merchant payment system receipts.

What about payments on combined services and products, for example screen printing?

This is a complex issue. Photographers are another example. When in doubt, send a 1099. The vendor should be reporting this income anyway, so there's no harm in it. They also are able to

deduct all their expenses on the tax return, so even if you have reimbursable expenses included in a 1099, it is not an issue. Some vendors argue it anyway, but that's just because they don't

understand how this works. If they have an involved and knowledgeable bookkeeper or accountant, they're less likely to be concerned.

How are attorney payments treated?

This depends on the nature of the payment. Gross fees payable to an attorney are reported on 1099-MISC (box 14). This may include litigation-related payments or settlements in a lawsuit paid to the attorney. 

Fees paid for legal services are reported on 1099-NEC (box 1).

Do individuals who were paid interest on a loan to a business get a 1099-INT?

Yes. Any non-corporation who gets paid loan interest on a loan made to the business should get a 1099-INT. We see a lot of people forgetting to issue these. Thankfully, the due date to the IRS is much later for these, so you've got time to fix that if you’ve forgotten!

Are there special state requirements?

State-level regulations can get complicated fast. For example, some states participate in the Combined Federal/State Filing (CF/SF) program, some states don’t require business to file 1099s with them at all, etc. If you and your clients are operating in a state that has filing requirements or aren’t sure what regulations to follow, check with the IRS about your specific rules and deadlines.

Reclaim Your Time with Keeper for 1099s and W-9s

Even knowing every single in and out surrounding 1099s and W-9s won’t save you from the beginning-of-year rush to collect all the information you need to issue dozens of documents in time for looming IRS deadlines.

The solution to avoid this stress during tax season — when there are plenty of other things to stress over! — is two fold. 

Part one is about reframing 1099 management from a one-time, annual dash to a recurring element in your year-round workflow. 

And part two revolves around streamlining elements of this workflow so you can sign off on the repetitive, manual tasks and spend more time on meaningful work. 

Keeper aims to address both. With a focus on simplifying month-end closes, our software helps bookkeepers and accountants track 1099s and W-9s and gather all information to file them every month — instead of in one mad dash. 

Keeper is also the best platform for automating error detection and porting corrections made inside Keeper right into Quickbooks and Xero so you don’t have to toggle between apps. Our branded Client Portal makes it faster to gather information you need from clients and their vendors. Together, these tools streamline work to make 1099 management less stressful. 

Book a demo and see how Keeper will help you reclaim your time. 

The post The Lowdown on 1099s & How to Stop Tax Season Stress (2024) appeared first on Keeper.

Why? 

And what do you really need to know to remain compliant and provide the best service and advice to your firm’s clients?

Keep reading to separate the signal from the noise. 

What is Form 1099-K?

Form 1099-K is an information tax document that helps individuals and businesses reports payments received during the previous year from selling goods or services via:

• Credit and debit cards
• Stored value cards, aka gift cards
• Online marketplaces (Facebook Marketplace, etc.)
• Other online platforms that manage transactions (Fiverr, etc.)
• Payment apps (PayPal, etc.), referred to as third-party settlement organizations (TPSOs).

This form was actually introduced for the 2012 filing season, but a major update to reporting rules is why it’s back in the news in 2024. 

1099-K News for 2024

The American Rescue Plan introduced in 2021 famously issued direct payments to American taxpayers to help ride out the impacts of COVID-19. 

But it also did something else — changed the reporting threshold for business transactions settled using TPSOs. The goal was to require reporting once transactions exceeded $600 (gross), a massive decrease from the previous threshold of 200 transactions or $20,000. 

Here’s what you need to know: The threshold change is starting to roll out now in 2024.

After a multi-year delay due to backlash over this sudden and stark change, the IRS issued Notice 2023-74, which will phase in the threshold change. It will start with a new $5,000 threshold for the 2024 tax year.

That said, some states have already switched to a lower threshold. For example, as of 2023, several states instituted the $600 threshold for requiring a 1099-K from TPSOs. 

Why Should Accountants Be Paying Attention?

Luckily, this is not another form that accountants and bookkeepers have to think about issuing in time (not for themselves, anyway) — but it’s helpful to know what the 1099-K is because you’ll likely receive one as a business that’s received payment via card. 

Because of the 1099-K, you’ll also find yourself issuing a lot fewer 1099-NEC and 1099-MISC forms on your behalf as well as for your clients. This is because transactions made via credit card or one of the dozens of third-party payment platforms are already reported to the IRS via the 1099-K.

Another reason to get to know 1099-Ks is simple: You may find yourself needing to reconcile the data on this form against reported sales income on your clients’ tax returns, and your own. We’ll talk more about this process later in this article.

And finally, you should care about Form 1099-K because millions of taxpayers who have never received one before are about to start seeing them for the first time in 2024 and beyond. And they’re going to turn to you for help. 

Here’s what you need to know to prepare for the increase in paperwork and flood of questions you’re likely to receive from your clients around 1099-Ks. 

Who Should Send Form 1099-K?

Credit card companies, payment apps, online platforms, and pretty much any entity that processes payments should be sending 1099-Ks to users who meet the threshold. 

Here’s the full list from the IRS at the time of this writing:

• Payment apps
• Online community marketplaces
• Craft or maker marketplaces
• Auction sites
• Car sharing or ride-hailing platforms
• Ticket exchange or resale sites
• Crowdfunding platforms
• Freelance marketplaces 

Per current regulations, they must send one form to the IRS (due Feb. 28 for paper and March 31 for electronic) and one to the individual (due Jan. 31).

Personal payments from friends and family — such as gifts or repayment for a shared meal — should not be reported! Instruct your clients to mark payments like this as personal whenever possible, as it’ll save them money and save you a lot of time on clean-up later. 

Who Should Get Form 1099-K?

There are two types of clients who should get a 1099-K: 

• Any individual or business that received payment by card (credit, debit, gift) for the sale of goods or services. There is no threshold here. 
• Any individual or business that received payment via a payment app or online marketplace and meets the current reporting threshold. They may include side hustlers, small businesses, crafters, and even casual sellers (more on them shortly). 

These payments can be for:

• Goods sold (including personal items)
• Services provided
• Property rented out

What About Sales of Personal Items? 

One of the biggest concerns about considerably lowering the threshold for TPSO reporting is how it may impact people who sell personal items casually through platforms like eBay. 

Technically, they should only be taxed on these sales if they result in a profit. But profit or not, once a seller meets the reporting threshold, they’re likely to get a 1099-K. 

If your client received a 1099-K for income that resulted from personal items sold at a loss, here’s how the IRS recommends handling it using Schedule 1 (Form 1040):  

• Reporting the proceeds from their Form 1099-K on Part I, Line 8z using the description “Form 1099-K Personal Item Sold at a Loss” then
• Reporting costs, (up to but not exceeding the Form 1099-K amount) on Part II, Line 24z with the description “Form 1099-K Personal Item Sold at a Loss”

Where Clients Can Check for 1099-Ks

If a client didn’t receive a 1099-K when they expected to, they can usually go straight to the payment platform to find it. 

Here’s a quick breakdown of where the document lives on a few popular apps: 

• PayPal: Dashboard > Activity > Statements > Tax documents 
• Stripe: Dashboard > Documents 
• Square: Dashboard > Tax Forms
• Amazon Pay: Seller Central Account > Reports > Tax Document Library

What to Do About 1099-K and Sales Revenue Misalignment

In certain instances, the sales revenue you have recorded for a client may not align with the amount reported on their Form 1099-K.

This discrepancy can be the result of cash basis accounting, or the client using the same payment processor for various transactions, such as personal payments or payments for other businesses they own. Most TPSOs will only send one 1099-K, and it will lump all payments together.

This problem reinforces how important it is to warn clients to separate their business and personal payment apps — or to mark payment types as clearly as they can. 

How to Correct Inaccurate 1099-Ks

That said, sometimes there are actually mistakes on 1099-Ks, such as an incorrect identification number (TIN) or an inaccurately-calculated gross amount or transaction number. 

To address this, you should contact the filer about the mistake using the contact info on the 1099-K. If that avenue doesn’t work, which it may not if you’re in a hurry, use Schedule 1 (Form 1040) to denote necessary adjustments. 

Prepare for the 1099-K Storm with Keeper 

Modifications to the 1099-K filing requirements should significantly increase the number of people and small businesses who require accounting and/or tax preparation assistance. 

Get in front of the wave with bookkeeping practice management software that empowers you to handle new heights of document reconciliation and management, client and vendor communication, and custom reporting.

That’s what Keeper is for. 

Our month-end close manager is a centralized tool that syncs directly to QuickBooks and Xero, which is why thousands of bookkeepers and accountants use Keeper to streamline tasks and  automate client communication via a branded Client Portal, catch and correct coding errors, prepare 1099s year-round, generate stunning reports, and quickly process receipts (join now for discounted beta pricing!). 

Consider adding Keeper to your accounting tech stack and learn how it assists modern firms in keeping up with ever-changing tax law when you book a demo.

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