How to Understand Your Facebook Tax Information 1099K and 1099 Misc
1. Triple check you’re calculating the gross amount right that should tie up to 1099. Add up everything again just to be sure. In this time, also take the time to read the 1099K instructions on the IRS website to be sure you’re including or excluding everything from the total as appropriate. If it’s still off compared to the 1099, consider preparing a reconciliation of Facebook’s 2021 Excel spreadsheet. You can download, your bank account deposits from Facebook, the sum of all the sales per the detail under “shipping orders” and the “your sales” tab, to the 1099 to see if you can figure out where it’s off.
2. If it still doesn’t tie, the next step would be to try to contact Facebook for some help. Ask them to explain the discrepancy. When going through that process it’s very important to KEEP a RECORD OF THE COMMUNICATION. Print it out, save it to the desktop on a PDF, whatever you prefer. Just make sure you have a paper trail of them being uncooperative or not helping. This will be great support later to have to discuss with your tax accountant, or even the IRS if necessary.
3. If that doesn’t work and you’re running up against the filing deadline, strongly consider getting an accountant to help with the issue and maybe suggest having them extend your tax return if they don’t think it can be resolved before the filing deadline. Have them go back and analyze the work you did with the reconciliation to make sure you didn’t miss anything. Ask them what to do about the situation overall and consider that advice. They may have dealt with this situation before. They could suggest something like this article below from TurboTax suggests or may have other ideas.
https://ttlc.intuit.com/community/after-you-file/discussion/my-1099-income-is-wrong-and-cant-get-a-hold-of-the-company-to-change-it-they-went-out-of-business/00/307033/amp https://www.irs.gov/pub/irs-pdf/i1099k.pdf
https://www.facebook.com/legal/commerce_product_merchant_agreement
There has been a lot of confusion this year on the 1099 tax forms that have been coming out, so we put this video together to help you understand what they are for and how the numbers are computed. Below is also a list of references for you to go and do additional research. There is a mistake in the video. The thresholds for the 2021 year are 20,000.00 and 200 transactions, not, or 200 transactions. There are also more states than were mentioned in the video. The only states mentioned were the ones that Facebook put out on the FAQ that they provide on their website.
Here are a few additional resources that you might find useful to understand how your 1099 works for you.
Selling Online and Taxes | Facebook Marketplace
In this video, Colby takes the time to explain some of the details and records that we need to be keeping to file taxes and keep our books
