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Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 12050
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Is it bad to get multiple 1099-k's in the mail year? I have

Customer Question

Is it bad to get multiple 1099-k's in the mail for one year? I have three one for $30 another for $3600 and another $2100 all from different credit card merchants. I switched between card processors because one seemed better then the other and now i found the right now and have a $11000 1099-k from my main merchant now. all these are for 2015 year. i also dont have receipts other then processing the cards online then withdrawing the funds later in cash. i buy gift cards (visa/mastercard/amex/discover) for 80% of the value. and pay in cash usually
should i worry about this at all? this is the first time i file for taxes.
Submitted: 1 year ago.
Category: Finance
Expert:  Lane replied 1 year ago.

I hold a JD (Juris Doctorate, a doctoral degree in the law), with concentration in Tax Law, Estate law & Corporate law, an MBA, with specialization in finance & tax, as well as CFP® and CRPS designations. - I’ve been providing financial, Social Security & Medicare, estate, corporate & tax advice since 1986

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Hi - I can help here ... No not at all. This just shows that you're a business with multiple payors. MANY independent contractors (anyon who receives a 1099-K or 1099-MISC get MANY 1099's .

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Because IRS gets a copy too, the only important thing is that you DO report every one of them. Having multiply payos can show a solid and diversified business for credit underwriting purposes too.

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Let me know if you have questions

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Lane

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Expert:  Lane replied 1 year ago.

The only concern you should have is going back and documenting - and this will only come up in any audit (and again, having multiple 1099's is not an audit flag - just means you have lots of clients/customers) - is documenting those expenses, so that you can use them to reduce your taxable income on the schedule C.

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Receipts are NOT the magic proof that they used to be ... with information sharing, the availability of bank and other payor statements, these items show then outflows just as well as receipts ... the point is to keep them .

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In many cases it's just important to have something in writing... Mileage, for example, can be tracked in an appointment book, so that it becomes a mileage log,especially for those that use their cars to drive to business appointments.

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See this from IRS:

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What kinds of records should I keep?
You may choose any recordkeeping system suited to your business that clearly shows your income and expenses. Except in a few cases, the law does not require any special kind of records. However, the business you are in affects the type of records you need to keep for federal tax purposes.

Expert:  Lane replied 1 year ago.

I would submit that the place where receipts DO become important is where you pay cash, and don't have a card statement or other documentation that the money was spent for business purposes

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I hope this has helped.

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Please let me know if you have any questions at all.

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If this HAS helped, I'd really appreciate a positive rating (using the rating request, faces, or stars on your screen)

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That's the only way I'll be credited for the work here.

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Thank you!

Lane