What creators need to know about 1099-K forms this tax season
Photo by Jeremy Cohen, featuring It's Radish Time Host taylor behnke
It's tax time! Here's what you need to know about 1099 forms before you file.
Our mission at Patreon is to give creators the tools to build the most successful, sustainable creative businesses they possibly can. That means we want to be as transparent as possible about things like managing your finances, building your business, and, of course, paying your taxes. (Seriously, pay those taxes!)
While Patreon can't provide tax advice, we can share information to help answer your tax-related questions and prepare you for tax season. Here we guide you through the ins and outs of an essential tax form for independent creators based in the U.S.: the Form 1099-K.
What is a Form 1099-K?
Generally, if you're a U.S. citizen or resident who's earned more than $20,000 in a calendar year on Patreon, you'll receive a Form 1099-K, a form that's used to report certain payment transactions, such as credit card payments. (If you live in certain state, you will receive a form even if you earned less than $20,000. And in all circumstances, your obligation to pay taxes is not dependent on whether you get a form.)
How do I get that Form 1099-K? Will Patreon send me one?
If you're required to receive a 1099-K, we'll send it to you in the mail. (Make sure your mailing address is up-to-date at the end of each year.)
You can also enable paperless statements from the tax section of your payout settings page on Patreon. We generate a 1099 form in January for all U.S. creators who reached the thresholds in the previous calendar year. If you haven't received it by mid-February or your address was out-of-date, please let Patreon know. These forms are also available for download on your Creator page.
What does a Form 1099-K include?
Your 1099-K reflects your gross earnings for the year from successful pledges on Patreon. Refunds and any Patreon fees are disregarded on the form by law. (In other words, if you earned $10 but incurred $1 in fees and refunded $2, the form would still report the $10). Be sure to account for these fees, refunds, and any other expenses incurred during your year as a creator on your tax return.
Check out the tax information on your Patreon creator page under Settings > Billing and payouts and see your year's gross earnings.
Why doesn't my 1099-K match the tax information in my Patreon account?
The gross earnings included on your 1099-K doesn't include fees or refunds, which means you might see a mismatch between the form and the numbers in your Patreon account. This is normal and doesn't mean anything is wrong with either source. The IRS is quite specific on what amounts are reported on a Form 1099-K, and states that amounts are to be reported "without regard to any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts." That said, fees and refunds are absolutely a business expense and should be accounted for when you file your taxes.
What if I have more questions about taxes, my finances, or other tax forms?
For more tax talk, read What you can (and can't) write off as a creator and peruse the creator tax information in Patreon's Help Center. If you're looking for official U.S. tax information, IRS.gov can be a helpful place to start. For specific questions, seek assistance from a local tax professional. And, check out tools that make filing easier, such as Keeper, tax-filing software designed for people with business income.
This article is intended as knowledge-sharing, not tax, financial, or legal advice. Always consult with tax, financial, and legal professionals to determine what's best for your business.