As a seller on Amazon FBA, it’s important to be aware of the various tax forms and documents that you may need to file your taxes accurately. One such form is Form 1099-K, which reports payment card and third-party network transactions. If you meet certain thresholds, Amazon will send you a Form 1099-K that shows the gross amount of payment card transactions and third-party network transactions for the year. Here’s how to get Form 1099-K through Amazon when preparing tax returns for your Amazon FBA business.
Setting up your Amazon account to receive Form 1099-K
The first step in getting your Form 1099-K is to ensure that your Amazon account is set up correctly. You’ll need to provide your legal name, tax identification number (TIN), and other information to Amazon so that they can generate the form. To do this, log in to your Amazon Seller Central account and select the Settings tab. From there, select Tax Information, and then click on the Edit button next to the section titled “Tax identity information.”
On the next page, you’ll need to provide your legal name and TIN, which can be either your social security number (SSN) or your Employer Identification Number (EIN). If you don’t have an EIN, you can apply for one through the IRS. (If you find this procedure complicated, you may opt to use professional service providers like Workhy to file your EIN application on your behalf.) Once you have entered your tax identity information, click on the Save button to save your changes.
Next, you’ll need to monitor your sales throughout the year to ensure that you meet the thresholds for receiving a Form 1099-K. For the tax year 2022, you’ll receive a Form 1099-K from Amazon if you have more than $20,000 in gross sales and more than 200 transactions. If you meet these thresholds, Amazon will automatically send you a Form 1099-K by January 31st of the following year.
How to request Form 1099-K on Amazon Seller Central
If you haven’t received your Form 1099-K by January 31st, you can request a copy from Amazon. To do this, log in to your Amazon Seller Central account and select the Reports tab. From there, select Tax Document Library, and then click on the Download button next to the Form 1099-K for the relevant tax year. You can download a PDF version of the form, which you can print or save for your records.
It’s important to note that you’ll need to report the gross amount of payment card transactions and third-party network transactions that are reported on your Form 1099-K on your tax return. You’ll also need to ensure that the amounts on your Form 1099-K match the sales figures that are reported on your Amazon FBA Year-End Summary Report, which you can generate by selecting the Reports tab, selecting Payments, and then clicking on the Date Range Reports link. You can use the Date Range Reports page to generate summary reports for a specific date range.
How to organize your data into tax categories
To prepare your tax return, you’ll need to organize your data into relevant categories:
- Gross receipts (total sales)
- Cost of goods sold (the cost of the products you sold)
- Advertising expenses
- Office expenses (such as software or office supplies)
- Professional fees (such as accounting or legal fees)
- Shipping and fulfillment expenses
- Travel and entertainment expenses
- Other expenses (anything that doesn’t fit into the above categories)
By organizing your data into these categories, you’ll be able to fill out your tax return much more easily. You’ll also have a better understanding of where your money is going and how you can improve your business in the future.
Let Workhy help you file taxes for your Amazon FBA business
In conclusion, getting Form 1099-K through Amazon is a straightforward process, but it’s important to ensure that your account is set up correctly and that you monitor your sales throughout the year to ensure that you meet the thresholds for receiving the form. If you are unsure about any aspect of taxes for your Amazon FBA business, it is advisable to seek professional help. Workhy is an online company formation service provider that also helps entrepreneurs file tax returns during tax season. With the assistance of Workhy, you can make tax season a lot less stressful and focus on growing your Amazon FBA business.