Tax Form 1099-K Guide

If you opt for Customer invoicing with your assignments, you might receive Form 1099-K for tax intentions. 

This instructional session aims to enlighten you regarding Form 1099-K through these details: 

1. Comprehend the Form 1099-K
2. Recipients of Form 1099-K
3. Issuers of Form 1099-K
4. Actions upon receiving Form 1099-K

Notice: The details presented here conform to the IRS guidelines for 2020; however, this guidance is subject to adjustments. Webflow will update this content as necessary to ensure adherence to IRS protocols in forthcoming years, if applicable.

Grasp the Form 1099-K

The Form 1099-K documents payment transactions executed via third-party payment processors and credit card processors. Webflow’s Stripe platform is acknowledged as a third-party processor employed for processing Customer billing payments. 

Recipients of Form 1099-K

If you engage in Customer billing and satisfy all the subsequent conditions, you will be furnished with a Form 1099-K:  

1. You conducted transactions exceeding $20,000 USD in cumulative gross volume from your Customer billing accounts
2. Exceeded 200 Customer-billed charges
3. Are liable to United States taxes

Even in cases where not all 3 criteria mentioned above are met, there’s still a possibility of receiving a 1099-K, influenced by the regulations of the state where you reside (which differ among states). Examine your state’s regulations. 

Issuers of Form 1099-K

Webflow dispenses 1099-K forms by January 31 every year. Typically, the forms are dispatched to you via email from Webflow’s Track1099 platform (an IRS-endorsed provider), requesting acceptance of the digital copy. Should you fail to accept the digital copy, Webflow will mail a physical copy to your registered address. In the scenario of the mailed copy being returned, Webflow will reach out to you directly through email and furnish a copy electronically.  

Forms may also be directly distributed by Stripe (our payment processor), or by your respective US state. You will obtain a digital copy post Webflow’s submission.

Protocol upon Receiving Form 1099-K

Notice: It is advisable to consult a tax professional to address your individual reporting obligations. This content should not be misconstrued as tax counsel as per Webflow’s recommendation.

The figures on Form 1099-K are reported gross as mandated by the IRS. The sum indicated on your 1099-K is not construed by Webflow or the IRS as your earnings. Amounts remitted to Webflow can be discounted as a business expenditure against the gross transaction sums on your 1099-K. 

Use the data on your 1099-K to ascertain your earnings as exemplified below: 

• John leverages Customer billing, with his client billed $19.99 per month 
• Webflow invoices $15.24 for monthly hosting and platform charges
• Webflow subtracts credit card charges (3%) from John’s earnings

Computation:

  $19.99 (Amount invoiced by John’s client as per his bill — this is specified on John’s 1099-K)

– $15.24 (Sum remitted to Webflow for hosting and platform charges)

– $  0.88 (Sum deducted for credit card processing charges: $19.99 x 2.9% + $0.30)

= $  3.87 (John’s payout)

Notice: The percentage levied for credit card processing charges might differ based on your location country, ranging from 2.9 to 3.5% of the total sum charged.  

Accessing your Customer billing information

You can view your Customer billing invoices in your project’s Billing section and assess the line items to ascertain the sums remitted to Webflow. 

Notice: The amount deducted by Stripe for credit card processing charges will not be visible to you. 

Further Details

From the IRS: Understanding Your Form 1099-K

For queries concerning the figures on your 1099-K, kindly reach out to [email protected].