This article contains information about tax reporting for 2021. If you’re looking for information about 2022 tax reporting requirements, click here.
Third Party Networks (such as SidelineSwap) use IRS Form W-9, Request for Taxpayer Identification Number (“TIN”) and Certification, to obtain tax identification information from individuals and sellers who receive reportable payments stemming from marketplace transactions during the calendar year. When required, Third Party Networks subsequently provide this information to the IRS and applicable state taxing authorities by filing a Form 1099-K information return. The 1099-K reports the gross amount of all completed and canceled transactions, including shipping costs, taxes, and fees. The 1099-K is a purely informational form that summarizes the sales activity of a Seller's account and is designed to assist a Seller in reporting their taxes.
For more information, please refer to this IRS publication, provided by the IRS.
Do I need a 1099-K form for my SidelineSwap sales?
Based on federal IRS thresholds, SidelineSwap is required to issue a Form 1099-K to you and the IRS if both of the following are true:
- You have had $20,000 USD in sales through SidelineSwap during the calendar year.
- You had 200 or more sales during the calendar year.
Some states have different requirements. You’ll receive a Form 1099-K if you meet your state’s threshold in the calendar year:
What information is required?
You will need to provide SidelineSwap with your tax and certain personal information in order for SidelineSwap to file a complete and accurate 1099-K tax information return, should you meet the filing requirements. SidelineSwap will verify this tax identification information with third party verification providers and applicable federal and state taxing authorities. During this process SidelineSwap may request additional information.
This tax and personal information includes the following:
- Legal First and Last name
- Social Security Number (SSN) or Individual Tax Identification Number (ITIN)
- Mailing Address
- Tax Classification (Reporting status for income tax purposes i.e. individual v. business)
For certain tax classified business entities, such information may also include:
- Legal Name of Entity (if different from individual)
- Employer Identification Number (EIN)
- Registered Business Name/Disregarded Entity Name/Doing Business As (DBA), if any
- Registered address of entity
Why do I need to provide my Tax Identification Number?
SidelineSwap requires tax identification numbers to verify that the owner of the SidelineSwap account matches the information on record with the IRS and applicable state taxing authorities. This verification is also necessary to ensure that the 1099-K information associated with the SidelineSwap seller account is properly reported to the tax authorities. If you’re not eligible for a social security number, you can provide an Individual Tax ID Number (ITIN). Please note that additional information may be requested after providing your Tax Identification Number. If you need to correct your provided tax information, please contact SidelineSwap Support.