One place to access all of the information you need about:
At any time, if you have a question, there are multiple ways of getting assistance:
Message in the HarQuin App
If you have opted-in for 1099’s, the “Year End” section appears on the left.
Use this section anytime to chat with our Year-end Team.
You can access it HERE.Book a call
Want to chat on the phone? Book a call HERE.
We are so happy you're part of the HarQuin Family!
Remember, we're in this together! :)
2024 Rulings
As of November 26, 2024, the IRS has decided to enforce a law implemented in 2022. Originally, the IRS required all Third-Party Processors to issue 1099-Ks to anyone who has received over $600.00 in payments through a single platform. For fiscal years 2022 and 2023, this was delayed.
For 2024, they have decided to move forward with this change but do it incrementally. For fiscal year 2024, the dollar amount is $5,000.00 per platform. For 2025, it will be $2,500.00, and in 2026, $600.00.
How does this impact you, the HarQuin client? This rule will be enforced in 2024 and changes who receives a 1099 and who doesn’t. It’s important to note that this only applies to our clients who use PayPal, Venmo, and Cash App to make payments. If you pay using Zelle, this doesn’t apply. Note, if you use another Third-Party processor that hasn’t been listed, please reach out to the 1099 Team in the HarQuin App asap and we will research that platform individually to ensure we understand how they will handle 1099-Ks.
Below is a list of how each platform is handling 1099-Ks and what this means for HarQuin processing them in 2024:
PayPal
HarQuin will not be processing any 1099s for vendors paid via PayPal.
However, this may change because PayPal has yet to officially announce how it will handle 1099s for individuals. All businesses paid over the $5,000.00 threshold, will automatically receive a 1099-K.
We will be monitoring their website for changes. As of 12/9/24, they only have data up for 2023.
https://www.paypal.com/us/cshelp/article/current-form-1099-k-reporting-thresholds-help1131
🛑 Warning - if you are an employer who has paid your employee(s) with PayPal for their paychecks, there is a strong chance that their income will be double reported and they will receive two tax forms for the same monies (1099-K and W2). We urge you to stop paying your employee(s) through a third-party processor and prepare your employee(s) by telling them to watch to see if both forms come in. If it does happen, ask them to consult with a tax professional to ensure they don’t get double-taxed.
Venmo
HarQuin will not be processing any 1099s for vendors paid via Venmo.
Venmo has confirmed that they will be issuing 1099-Ks to both business profiles and individuals. Their website notes that this money is for “goods and services”, but users know there is no way to make that distinction when paying people. Furthermore, the IRS is providing guidance to people whose reimbursements show up on their 1099-K, on how to write it off so you aren’t stuck paying income taxes on it. This is a clear indication that the IRS is expecting this to happen.
https://help.venmo.com/hc/en-us/articles/4410097047315-What-to-Expect-for-Tax-Season
🛑 Warning - if you are an employer who has paid your employee(s) with Venmo for their paychecks, there is a strong chance that their income will be double reported and they will be receiving two tax forms for the same monies (1099-K and W2). We urge you to stop paying your employee(s) through a third-party processor and prepare your employee(s) by telling them to watch to see if both forms come in. If it does happen, ask them to consult with a tax professional to ensure they don’t get double-taxed.
Zelle
HarQuin will be processing all vendors paid through Zelle as they are not required to report to the IRS.
https://www.zellepay.com/faq/does-zelle-report-how-much-money-i-receive-irs
Cash App
HarQuin will be processing all Cash App payments made to individual accounts as they will not be receiving a 1099-K. If the Cash App account is a business account, they will be receiving a 1099-K so therefore HarQuin will not be issuing 1099s for Cash App accounts that have business names.
https://cash.app/help/6499-tax-reporting-for-cash-app-and-form-1099k-faqs
FAQs
How do I submit W9s to HarQuin?
You should submit them via the secure PDF link here - https://pdf.ac/aMpsxI
You can upload them to the HarQuin App in the DOCUMENT area under the YEAR END tab.
How do I opt-in to have HarQuin do my 1099s?
All HarQuin clients have a task in the HarQuin app called “Year End Form”. Please fill that out and choose YES when it asks if you want 1099s.
How much does it cost for HarQuin to complete my 1099s?
We charge our time to audit and complete (billed at your bookkeeping rate) plus $5 a form. The form is mailed to the address of the vendor per their W9.
Requesting W9s:
We've made it easy for you to obtain new and updated W9s from your subcontractors. Copy the link and sample wording below and give it to anyone from whom you need to collect a W9. They will be able to fill out and e-sign the form online. HarQuin will use the information provided to process their 1099.
Hello,
I am preparing for year-end and need you to complete a W9 to determine whether I send you a 1099 in January. Here is the link. Please remember to put your EMAIL ADDRESS so that HarQuin may reach out to you if there is an issue; AND, please put MY BUSINESS NAME in the “Requester’s Name” section. This will allow them to identify which company your W9 belongs to.
Here is the secure link, please fill it out ASAP. 😊
https://pdf.ac/aMpsxI
How do I know if someone should receive a 1099?
The IRS has a website that explains what payments are to be claimed on a 1099 (NEC or MISC). It’s important to know what your requirements are as the business owner. This is for your protection should you ever be audited by the IRS.
We recommend getting W9s before paying each vendor so you don’t have to hunt them down after the fact. If you choose not to issue them, you will lose the ability to deduct the expense - per the IRS. You can discuss this with your CPA.
https://www.irs.gov/instructions/i1099mec
Here are some excerpts from the link above:
Specific Instructions for Form 1099-NEC
File Form 1099-NEC, Nonemployee Compensation, for each person in the course of your business to whom you have paid the following during the year.
At least $600 in:
Services performed by someone who is not your employee (including parts and materials); or
Payments to an attorney
Specific Instructions for Form 1099-MISC
File Form 1099-MISC, Miscellaneous Information, for each person in the course of your business to whom you have paid the following during the year.
I have a consignment business; do I need to 1099 the payments made for products?
No, on the contrary. If you collect commission and/or rent from your consigners, they need to 1099 you.