Question

Using Zelle to receive payments which will be over $50,000 a year.

Forum|Forum|6 years ago
July 27, 2019
2 replies
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I will be receiving around $50,000 a year and plan to use Zelle to receive the payments. I feel that Zelle is super easy to use and goes straight into my bank account which I like. I will be receiving payments from many different people. How will it work for the 1099-k and 1099-misc? How will they send it to me?

macuser_22

Not sure what you are asking.

You must report all self-employed income reguardless of the payment method or whether you receive a form from the payer or not. 1099-MISC forms are only issued by other businesses that pay you more then 600 in a year. a 1099-K is not actually entered into a tax return, but the income reported on it, if received, must still be entered under the proper category for that income. The method of payment is not material.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

S

skully9999982Author

I appreciate the response. I'll try to explain more in depth. I am doing some online work for different people and I am under 18 so seems as if Zelle is the best option. Many of the people will be sending me over $600 in a calendar year but what happens if for some reason they (people I work for) do not send me a 1099-misc? Also, I can fill out a 1099-k by getting the form from turbo tax correct? Another thing, if you have any better payment options you know of for someone under 18 it would be greatly appreciated (not venmo and paypal since you really need to be over 18 for them).

macuser_22

@skully9999982 wrote:
Many of the people will be sending me over $600 in a calendar year but what happens if for some reason they (people I work for) do not send me a 1099-misc? Also, I can fill out a 1099-k by getting the form from turbo tax correct?

No, you cannot fill out a 1099-K since you are not a payment settlement entity (PSE) . Failure to file a 1099-K is between the IRS and Zelle. It makes no different to you if you receive a 1099-K or not since it in only information to you even if you do receive one.

As I said, only businesses issue a 1099-MISC in the course of doing business - individuals do not issue 1099-MISC forms. If a 1099-MISC is required, it is sent directly from the business that pays you to you. You must report all income whether you receive a 1099-MISC or not.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

A

Anonymous_

@skully9999982 wrote:
How will it work for the 1099-k and 1099-misc? How will they send it to me?

You should really ask Zelle --> https://www.zellepay.com/support/contact

Regardless, as @macuser_22 stated, you are required to report the income irrespective of whether you receive any type of tax reporting statement. Having said that, Zelle should actually not be sending out any such statement since it is merely a cash transfer system.

macuser_22

As I said above, a 1099-K does not go on your tax return. It's purpose to to report to the IRS that such payments took place. The taxpayer must enter the payment, whether or not a 1099-K was received. a 1099-K can report income for many different types of income and that income must be reported in the proper place for that type of income.

Whether Zelle must issue a 1099-K depends if the IRS considers them to be a PSE.

Per the IRS instructions for a 1099-K:

Specific Instructions
A payment settlement entity (PSE) must file Form 1099-K,
Payment Card and Third Party Network Transactions, for
payments made in settlement of reportable payment
transactions for each calendar year. A PSE makes a
payment in settlement of a reportable payment
transaction, that is, any payment card or third party
network transaction, if the PSE submits the instruction to
transfer funds to the account of the participating payee to

Who Must File
Every PSE or other party which submits instructions to transfer funds to the account of a participating payee, in settlement of reportable payment transactions, must file an information return (Form 1099-K) with respect to each participating payee for that calendar year.
settle the reportable payment transaction.

**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**

S

skully9999982Author

Zelle does not send the 1099-k - I will have to download from turbo tax and fill out myself I am assuming. Since I am receiving more than $600 from many individuals I am not sure how that will work for a 1099-misc? What if the individuals do not send to me for some odd reason?