TidyYour 1099-K
isn't your income.
A 1099-K reports gross card and marketplace transactions — before fees, refunds and tax. Add every form and your book figures, and get a bridge that shows exactly what sits between the two, whether the gap is a known line, and whether it closes to the cent.
The forms and the books
One tax year, one currency. Enter positive amounts — the bridge applies the signs.
Most Box 1a amounts are gross of refunds. The bridge subtracts reversals to reach book net sales.
The 1099-K forms
One row per payer or marketplace. A seller on three channels may receive three forms — each reconciles to its own activity.
Your books
Use the same period as the forms. Net sales are after refunds and before sales tax; shipping you charged is part of sales.
Cash, invoice or other receipts no 1099-K reports.
Positive means the form includes something your books do not. Enter a negative amount to subtract.
The bridge
From the gross on the forms to the net sales in your books.
What sits between the form and the books
Each row is a known category, and the running total shows where you land. Marketplace fees need no row — both the form and book net sales are before fees, and the fees belong in expenses. A residual that no row explains is the only part worth chasing.
A reconciliation worksheet, not tax advice. The 1099-K is a reporting document; how the underlying income is taxed depends on your books and your filing method. Confirm treatment with your accountant.
Gross form.
Net deposits.
Read the full guide in The Tidy Ledger
or try the other free tools.
The form is a cross-check, not a new transaction
Box 1a is the gross amount of reportable transactions. It does not net fees, refunds, shipping, credits or sales tax — which is why it will not match your bank deposits, and why adding it to income double-counts the year. Your books already record the sale, the fee and the refund; the form exists to check that they explain the same activity.
What the bridge is for
- Prove the form. Every form you receive should tie to a channel’s annual activity — not to the sum of every channel.
- Name the gap. Tax, refunds, off-platform receipts and timing boundaries explain most differences; a residual is a question for the payer.
- Keep it with the return. A bridge that can be re-derived from named source documents is what makes a January review an afternoon, not an archaeology project.
- Never force it. A bridge that “closes” by plugging the difference into an unexplained line is worse than one that names the question.
Does the 1099-K amount go on my tax return as income?+
No. The form reports gross payment transactions; it is a cross-check, not an income figure. Your taxable income comes from your books — sales net of refunds, less fees and costs, under your method. Use the bridge to explain the form to your accountant, and let them confirm the return treatment.
Why doesn’t my 1099-K match my bank deposits?+
Deposits are net of marketplace fees, refunds, reserves and sometimes tax; Box 1a is gross before those deductions. Even a perfectly reconciled year will show a large gap between the form and the bank. The bridge accounts for each known category instead of expecting the two totals to agree.
Is sales tax included in the 1099-K?+
Box 1a is gross of the adjustments listed in the form’s instructions, which includes sales tax collected on the transaction. Tax is not income — it is a liability passing through — so the bridge removes it before comparing to book net sales. Keep the tax in its own payable account all year.
What if my marketplace reports net of refunds?+
Some processors net reversals before reporting. Switch the basis toggle to “Net of refunds” and the bridge stops subtracting them. If the form then closes, that was the convention; if it opens a gap equal to the refunds, the form is gross and the default basis was right.
Should I reconcile every form separately?+
Yes. Each marketplace or processor reports only its own slice, keyed to its own records. Summing the forms and comparing the total to your books is a useful sanity check, but a form that disagrees should be traced against its own channel’s annual summary, not against the combined business.
Every form,
already explained.
TidyPayouts keeps each payout split into named lines, so the 1099-K bridge is a report you run rather than a reconstruction you attempt.
Join the free beta Free during beta. No credit card.