Does Gumroad Issue 1099-Ks?
Will I get a 1099-K?
Here's a quick check to see whether this doc is relevant to you: " Are you a US based creator with gross $20,000 worth sales or more, AND 200 total transactions in the calendar year?"
Yes: You'll receive your Form 1099-K in the mail. Read the entire doc for more details.
No: Sorry, but we won't be issuing you a 1099-K. While this doc may not be very helpful to you, this song will be.
When can I expect the form to reach me?
We start filing the 1099s in Jan each year (for the last year's earnings) with our payment processor "Stripe". Stripe then submits the form to the IRS electronically, and sends out a snail-mail to the receiver of the form (you!).
You can expect the mail to reach you starting Jan-end to March. If you haven't received the form in time and want a digital copy to help you file your taxes, please write to us at support@gumroad.com and we can send you a PDF in the meantime.
The 1099-K amounts don't match my payouts exactly!
Sorry about that, but they are not supposed to. The 1099K you've received only serves as a rough approximation for the funds you've received. This is because, as a payment service, we must report our transactional volume attached to you, not the amount paid to you.
To clarify, this means that the dates will reflect all transactions at the time of sale, including the full amount (our fee, and EU VAT, which is not disclosed to you as we pay that ourselves). So, this reporting will not align with your payouts. Nor should it. Here's an IRS link with FAQs on how payment handlers (like Gumroad) need to report the earnings, and it says: "Gross payment card and third party network transaction amounts are reported on the Form 1099-K, Payment Card and Third Party Network Transactions. The "gross amount" of reportable transactions means the total unadjusted dollar amount of aggregate payment transactions for each participating payee."
The payout reports that we send indicate the money that's paid out, not the entire amount you've earned. On the other hand, 1099-K's are supposed to include ALL the amount earned in the year (before Gumroad/Stripe fee), which also includes sales that weren't paid out in the same year.
For example, if you sell an eBook for $25 on Dec 31st, you are not going to be paid out that money in the same year (read this doc in case you're wondering why). That's why your payout summary for that year won't include this particular sale, but your 1099 will! Similarly there'll be some sales from the penultimate year that were paid in Jan of last year — and while these will show up in the payouts CSV, they will not in the 1099s.
And if that's not enough, our payment processors often bring in certain reporting changes which cause a mismatch between our numbers and theirs. So you might see that for some months your 1099 reports a higher income as compared to Gumroad's CSV, while it might be the other way around for some other months.
Please use the 1099Ks as a marker, not as an end-all-be-all. Your accountant will likely use your deposits (and the associated emails) to help you file your taxes.
How to report for corrections?
If there's some obvious mistake in the 1099 like:
- Payee Name or TIN is incorrect
- Should've been filed as a business but was filed as an individual
- There's a huge difference between the actual and reported earnings
Please report us such discrepancies at support@gumroad.com from the email ID registered with your Gumroad account. We will work with our payment processor and file for a correction asap!