Does Gumroad issue form 1099K and 1099-MISC?
Disclaimer: This article is neither legal advice nor tax advice. We recommend that you speak to your tax advisor with any questions or concerns about tax reporting.
In this article:
- Will I get a 1099-K?
- Will I get a 1099-MISC?
- Does the 1099 form include PayPal sales?
- When can I expect the form to reach me?
- The 1099 amount doesn't match my payouts
- How to report corrections?
Will I get a 1099-K?
Do you meet all of the following criteria in the previous calendar year?
- The account is based in the United States
- More than $20,000 USD in total gross volume
- More than 200 transactions
If yes, then yes you will receive a 1099-K from our payment processor (Stripe) in your mail. If you do not meet any of those criteria, sorry, you won't be getting a 1099-K.
A physical copy is mailed by Stripe to the address mentioned in your payout settings, along with an email.
The 1099-K is a purely informational form that summarizes the sales activity of your account and is designed to assist you in reporting your taxes. For more help understanding your 1099-K, go to IRS.gov. You can also download a blank example of the 1099-K form here.
Will I get a 1099-MISC?
The 1099-MISC form is only applicable if you are an affiliate for other Gumroad creators. Affiliates with commissions greater than $600 USD in the previous financial year will receive a Form 1099-MISC.
A user only gets either a 1099-MISC or 1099-K depending on whether they are selling their own products, or are earning commissions as an affiliate, and the revenue amount.
Does the 1099 form include PayPal sales?
No. You will receive a separate 1099-K from PayPal for all your sales via PayPal Connect.
When can I expect the form to reach me?
We start filing the 1099s in Jan each year (for the last year's earnings). Stripe then submits the form to the IRS electronically and sends out an email and a snail mail to you.
You can expect the form to reach you starting Jan-end to March.
The 1099 amount doesn't match my payouts
Form 1099-Ks only serve as a rough approximation for the funds you've received. As a payment service, we would need to report our transactional volume attached to you, not the amount paid to you.
Here's an IRS link with FAQs on how payment handlers (like Gumroad) need to report the earnings, which 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 1099 amounts will not align with your payout as the gross amount includes our fee, VAT amount (which is not disclosed to you as we pay that ourselves), affiliate commissions, etc.
As mentioned above, the 1099-K from Gumroad does not include your sales via PayPal Connect, and there is at least a 7-day gap between when a sale occurs vs. when it is paid out, which can add to the mismatch.
Please use the 1099s as a marker, not as an end-all-be-all.
How to report corrections?
If there's some obvious mistake in Form 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 such discrepancies using the 'Contact Us' form linked below from the email ID registered with your Gumroad account. We will work with our payment processor and file for a correction asap!